So, what is social impact? When you think of social impact, the easiest thing to think about is people. I can even call it people impact. So, whether you’re a large MNC, multinational, social enterprise or from the nonprofit world, social impact is the effect that your organisation has on the people it interacts with – both inside the business, i.e. your employees, your staff but also, very importantly, the impact that your product and services or any activities have on the community it operates in.

OK, it’s important to recognise that an organisation’s social impact is not limited. There are charitable initiatives and CSL programs, but it’s impossible to separate social impact from the people and community it operates.

What is the difference between CSR, corporate social responsibility and social impact?

So, I just want to clarify here because I get this asked a lot, primarily because of my background. I can tell you more about the background later, but it started in the CSR world when I worked in NPR and foreign nonprofits.

Corporate social responsibility refers to practices and policies undertaken by corporations to have a positive influence on society. This often extends to activities such as philanthropy, such as donating money to a food bank or other charitable causes. And, of course, community engagement, such as volunteering, reading to kids or distributing food packages to communities.

Social impacts are the effects of an organisation’s actions on society – both positive and negative. So, the intent is also different. CSR is a proactive approach from a company to being a good corporate citizen. In contrast, the purpose of social impact is the other side – the effects of the actions on the well-being of individuals.

What is the Scope of CSR and Social Impact?

So, regarding scope, CSR is a subset of social impact because it’s pure and only refers to corporate actions. The scope of social impact is much broader and can involve any organisation – corporate social enterprises and nonprofits. And I’d like to call social enterprises nonprofits and SDOs – service delivery organisations. This encompasses both nonprofits and social enterprises. Social impact is very much in that arena as well.

What is Social Impact Measurement?

I have a passion, and have focused in the last couple of years on social impact measurement. Again, there’s quite a difference between CSR, which focuses on reporting and compliance. In contrast, on the social impact side, it is much more concerned about measuring the outcomes of the impact and effectiveness in creating change.

So, social impact is everything from hiring practices and DEI to worker pay – paying your factory workers a living wage – to supply chain partnerships. For example: How does the dye you use in your company’s clothes affect the water? What are the health and well-being of the people in the local village where the factory is based? It is much broader and slightly different.

This is a very common mistake in social impact measurement. A study of over 1700 social indicators was examined, and only 8% evaluated the actual effects of the company’s practices on social impact. A significant majority of the indicators, 92%, measured the company’s efforts. This means things like staff volunteer time, donations, issuing policies or commitments, and conducting audits, which are more of the CSR mindset. Even serious activities like the number of books donated, trainings conducted, community programs, food distribution – all that stuff is on the left side and the effort, because we love to check effort, that’s the easy thing to check.

This is why I love this space: because it’s not easy, but when you get there, it’s worth it, and that’s the effects of the outcomes and the long-term impacts of the efforts. So that includes things like behavioural change, the number of jobs created, reduction in human rights violations, and diversity among senior leadership. How have those numbers changed over time? That’s what I want to be clear about.

What are the two key questions that social impact addresses?

• Who is affected by your business?
• How are they affected?

First, you need to understand who they are. You’ve got a lot of stakeholders; I’m not going to go through every single one you have; you know how important they are, and they all have different weights. I will mention the few most critical ones – employees- and this is really the core. This is where your company’s culture stems from. This is where you can drive social initiatives through their engagement and ideas.

Also, at the end of the day, socially conscious consumers seek brands that align with their values. This is a trend that is happening whether you like it or not. If you’re an SDO, your customers are your beneficiaries, so it’s critical to understand their needs – not what they were but what they are now and what they will be going forward because it’s constantly changing.

Potential investors are prioritising companies with strong social responsibility records. They’re going to choose a new company; this is critical. The other one I want to mention is because of my background in PR and marketing media. It’s important because media coverage can shape public perception and awareness of the company’s social impact efforts. They can break or make your company if one bad callout says you’ve been greenwashing or you’ve done something drastic. This will completely change your company’s perception and, maybe, future.

How Do We Improve Outcomes?
Once you understand your stakeholders and their specific points of view, you can have an explicit intention to improve the outcomes and terms they care about. This is important. How do we do this?

Why is it important? Well, the company is only as good as its people. I love this study; thanks to LLM for highlighting this because this is the one from their white paper from ‘Driving Business Success Through Sustainable Innovation – Perspectives and CEOs in Asia Pacific. (download it here- https://www.limlogesmasters.com/2024/01/29/driving-business-success-through-sustainable-innovation-in-asia-pacific/)

Lelia did not ask me to mention this at all, but I think it’s a great study. They refer to Deloitte’s global Gen Z and millennial survey that just came out last year where 22,000 people surveyed agencies and millennials from 44 countries, and what they found is:

• 4 in 10 said they rejected work assignments due to ethical concerns
• Over a third have turned down employers they feel aren’t doing enough on matters such as the environment, DEI or mental health
• Less than 1/2 believe the impact on business and society is generally positive

Later, I will share some examples of how specific companies in Asia, in Hong Kong and around APEC, have successfully responded to this demand.

Now, we will go to the how. Alright, this essentially addresses another question that came up, which was:

There’s an emergence of a demand for service programs that connect multiple stakeholders in the community – their community service program where volunteering days are arranged by a social enterprise, connecting a corporation with a social enterprise and its beneficiaries. What do you look for when choosing one social enterprise or nonprofit over another, even if they have similar demographics?

Ultimately, it’s about building effective partnerships. You need to know who they are and make sure you form a strategy together so you have your own KPIs – the social enterprise, nonprofit, and corporate. So, for successful partnerships, you need to understand your goals as a company and business before choosing nonprofits to work with.

For example, MTR in Hong Kong does excellent work here in terms of social impact. They collaborate with several NGOs; they integrate individuals with diverse abilities and backgrounds into the workforce. They have maybe ten people with physical and mental disabilities, and this aligns with their business needs in a competitive talent market. They believe that NGOs can help them reach those goals. The NGOs train them, identify the best candidates for them to help, and then do internships and provide programs to test them out. It’s been a huge success, and they’re hiring them full-time.

The Importance of Purpose
So, I think this is one area. Purpose is an impact they need to recognise. Also, the SDO can really help them fulfil those goals. To do this, you must understand the social enterprise or the nonprofit’s objectives, which means building trust. It’s common for funders and NGO’s not to fully disclose information during discussions. Their budgets may not necessarily include all the expenses, and the funders get sceptical. NGOs withhold details because they’re concerned that if they’re too transparent, it will jeopardise their funding. Maybe they don’t understand that we need money for capacity building because they always want to ensure that every dollar goes to the end beneficiary. For sustainability and tangible impact, you need to invest in capacity building; it’s just critical.

At the end of the day, it’s just asking fundamental questions. For the corporates and the funders’ point of view, you need to ask:

“What is that purpose?”
“What are our social environmental goals?”

We live in a new era where consumers, businesses, investors, employees and service providers attach real economic value to social outcomes. For the first time, nonprofits have economic power. It’s an era where feel-good issues like education, the environment, healthcare, the arts, and animal rights have direct economic consequences and opportunities.

As part of the due diligence process, going back to the original question, funders can ask questions such as:

• Is the SDO a learning organisation?
• Can they show they’ve learned from their mistakes?
• Are they open?
• Are they transparent when they do make mistakes?
• From a governance standpoint, for example, does management listen to the people working on the ground?
• Do the board of directors really relate to what’s actually going on?

And this is such an important question:

How can we help?

Ask any NGO where they need help and see if you can support them in that area. Listen to their needs instead of “we know everything, and we’re going to help you” – it has to go both ways.

From the nonprofit and social enterprise side, nonprofits now have leverage, but they have to learn how to measure and sell their impacts to a new set of stakeholders. Are they being fully transparent and asking themselves if they are looking at their own staff, measuring their impact effectively? I think these critical questions are important to bear in mind.

Defining and Achieving Social Impact Goals
Finally, there’s not one thing in social impact that’s done, and then you can tick the box; it is a constant thing. Wherever you are on the journey, and this is where we can come in and help. You’ll need to find out your current state – it’s like a health check, like if you’re going to the doctor. You’ve got to know what medicine you need, how to improve, or where you are.

The best part is acknowledging that you know about societal and environmental issues. That could be a materiality assessment for a company or an impact evaluation for an NGO or social enterprise to see where you are. Once you’ve done that, you need to define what success would look like. There are multiple pathways to get there and many steps to reach the desired goals, and you have competing demands, priorities and socioeconomic factors that can pull your business or SDO in all different directions. This is where it’s important to have a north star, a purpose of vision; otherwise, you’re going to be blowing in the wind, which can be very frustrating for everybody in the business.

Social Impact Tools and Frameworks
In terms of the actual action plan and road map, there are many different tools and frameworks that can be used. I’m mentioning a few here, like the logic model and theory of change. Some of these you may not have heard of but are very common in the SDO world.

The impact assessment, which is EIA, is a free online tool that companies can use as a health check and where they go if this is part of the B Corp certification process. It’s a fantastic tool that looks at five different stakeholder areas. I could do a whole separate session on that.

Then, I’m sure you’ve heard of the triple bottom line, which is a comprehensive approach for businesses to assess the impact on people, planet and profit. So, they need to balance these three areas. So, those are some of the frameworks that we use.

Examples of Brand Social Impact
I mentioned I wanted to highlight some brands, specifically Vitasoy, a Hong Kong brand, but I believe it is in Singapore; they’ve got the B-Corp certification because they are genuinely and authentically pushing sustainability and the social and environmental sustainability agenda, which is fantastic.

L’Occitane is another one I wanted to mention just because it’s a cosmetic brand, but the APAC office coming out of Hong Kong led the B impact assessment journey. To get the certification, and yes, it came from the top down from their CEO in France, it meant in Hong Kong and APAC, the legal, HR, CSR, marketing, supply chain, human rights, and responsible sourcing team – everyone was involved. That meant it rallied them all together for a greater purpose, and it wasn’t just one CSR department doing all the work. They had the outcome they wanted. For example, one of them was SD 12, which was sustainable consumption and production, and they would reduce waste generation. One of their goals is to collect, for example, 2 million from beauty empties – the beauty products’ containers – and they collected 100 of them, then created some artwork, and re-used them in other areas. They have also done volunteer opportunities throughout this, so there are many ways this can be achieved on a practical level.

Another great brand is Lego. Not because they’re doing great work but actually because they’re being very honest and authentic. I get suspicious of any impact or sustainability report with too many fancy graphics – they spend too much time on how it looks, but there’s not much substance to it. It takes years to build a brand, but it just takes one event for the trust to be eroded. Lego admitted recently that it abandoned plans to produce its bricks from 100% recycled plastic after a project stated that this transition would increase its carbon footprint. And this is after two years of research and expanding its sustainability department to 150 staff. They tested hundreds of materials and did life cycle assessments to scale the production but then realised that their carbon footprint would be higher if they did that. Now, they’re focused on reusing, which is better than recycling. So, just be very open and transparent. Even if you’re wrong, to say you’re wrong is fine. We’re all learning; we’re all on this journey together.

Q&A

What does SDO stand for?
Service Delivery Organisation. This includes social enterprises, nonprofits, and NGOs. Nonprofits and NGO’s are used interchangeably depending on where you are.

How can investing in social impact become a strategic advantage in today’s competitive business landscape?
It creates a purpose for the employees; it gets them rallied towards the North Star. Define your goals, whether it’s getting a start towards volunteering or having specific metrics that you can use. At L’Occitane, for example, rallying all the different departments and competing to achieve their goals was the best way to build teamwork across departments. Being competitive, they were all trying to outdo each other, so that’s great. To bring in Gen Z and millennials, you must have this at the forefront. Now, it’s not just a department that has to be embedded across the whole company the next

How is an organisation’s culture affected by social impact initiatives? We’d love to hear your examples.
When I was running ‘Bring Me a Book’, for example, one of the areas that we needed to improve on was our website. We had a bilingual search engine for children’s books and met a tech company that helps with website design. They had about 20 programmers, coders, and designers, but they had a bad company culture. My friend was working there, and we needed to change the culture and do something.

It was a fun, fantastic project because we brought children’s books from India, Turkey and worldwide and put them into a bilingual search engine. They got to work and did an amazing job, which is now in the Hong Kong Public Library. It purchases all the recommended books in Chinese and English, but this would not have happened without this company, which was able to use its employees globally to work towards this.

You know there are many. MTR was a good one in terms of DEI and trying to fulfil their requirements with the environment, as well as another example of L’Occitane. There are lots of different models. Look at Patagonia, one of the most famous, but their corporation is not doing it just to be cool. You can have it in your company articles to say that even after the CEO leaves, we’re still doing our best for society and the community in which we operate.

What does social impact mean for real estate companies?
This is important because when you have tenants in the building, walkways and areas, fountains outside the building, or art exhibitions that provide for the community – all of this affects the community you work in. Hotels, for example, come to us to see how they can support the local communities they’re working in, and I think the mindset is shifting. I would recommend they look at the impact assessment as a guide to see where they are because it gives you lots of ideas of where you can improve not just in the social community, workers and suppliers, but also on the environment side as well.

There’s no quick fix, I’m afraid. It takes time, needs to be built internally, and is all about being authentic – that’s just the starting point. Admit that you’re not there yet. You must be humble in this space; it’s a different mindset.

What inspired you to transition from PR and marketing to social impact, and how do you think your early experience influenced your work today?
Thank you. It was when I came back to Hong Kong in 2006 after working for big PR marketing agencies. I wanted to use that skill to sell not just on a product – another handbag or something – but for something good for society. That’s when I met the founder of Bring Me a Book and got into the space. Leading that organisation for 12 years, I saw a lot of CSR and greenwashing. Corporates who came to us and asked for some ridiculous things that were unhelpful and not needed in the literacy world of Hong Kong were just trying to tick the box on their side. That’s when I realised that I needed to understand outcomes better and impact and measurement.

Also, how do we change the mindset, not just at the corporate level but on the nonprofit side, to be more professional about how they approach their work? I feel like that transition was a natural progression, but it did take some time and a lot of upskilling and learning a lot of frameworks. I tried lots of different frameworks to see what suited me. Ultimately, as much as I like people, I don’t feel every organisation needs a tailor-made framework.

How does a small social enterprise approach a corporation?
You might be small, but you can be mighty! I can tell you that some of these corporations are looking for grassroots organisations. It depends on which industry and what specific calls you are focusing on because, obviously, with corporations, they have their remit. Some focus on the elderly, some focus on animals, and some focus on human rights – all in different areas.

If you find your match, and this is where I can come in. You need to do some due diligence yourself to find those corporations that focus on the elderly or poverty or food redistribution. Perhaps it’s a partnership with other food redistribution NGOs, for example. The fact that you’re a social enterprise and NGO could work in your favour, but it can also be difficult depending on the organisation’s remit.

Transcribed from Lim-Loges & Masters’ recent ‘Ask the Experts’ session with Pia Wong.