What

Based on the valuation techniques, companies will define fit for purpose indicators, metrics and data sources, before conducting the technical measurement and valuation of their social impacts and/or dependencies.

Why

Measurement and valuation is at the core of the Social & Human Capital Protocol. Establishing reliable access to tailored information will support informed action from decision-makers. When comparable values are allocated to social & human capital impacts and dependencies, they can be used alongside other business information. This is key to integrating and mainstreaming the consideration of social & human capital within business operations and decision-making.

There are still many challenges for business in conducting social impact measurement and valuation, but the field is rapidly evolving. This guide contains current good practice, but improved methods and resources are becoming available as companies continue to strive for credible, useful and comparable valuation of social & human capital particularly in relation to Big Data, Real Time Data and Big Indicators

    How

    Step 7. Select appropriate valuation technique

    Valuation is the process of determining the relative importance, worth, or usefulness of something in a particular context. Valuation may involve qualitative, quantitative, or monetary approaches, or a combination of these.

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    Step 8. Choose indicators and metrics

    Before companies can conduct a valuation exercise, they need to measure their social & human capital impacts or dependencies.

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    Step 9. Undertake or commission measurement and valuation

    The final step in Stage 3 involves collecting and analyzing the data needed to complete the selected measurement and valuation approach adopted in Steps 7 and 8.

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    Outputs

    By the end of Stage 3, companies should have:

    • Decided which type of value, or combination of values, will be most useful for achieving the aims of the assessment and the needs of the audience;
    • Used this to choose an appropriate valuation technique;
    • Chosen the most appropriate indicators and metrics to support this valuation technique that are, as far as possible, SMART;
    • Decided whether or not measurement should be compared to a baseline or counter factual scenario and, if so, decided what baseline or counter factual to use;
    • An understanding of the issues of additionality and attribution and disclosed any relevant assumptions that have been made concerning these issues;
    • An understanding of the ethical considerations around data collection; and
    • Undertaken the collection of primary or secondary data (or a mix of both) and documented data sources, assumptions and limitations.