What is a Social Impact Statement?

A social impact statement is a written explanation by an organization of how its activities impact the communities within which it operates. The statement is focused on the social and environmental impact of the firm. The following topics are examples of what might be included in the statement:

Hours of volunteer time by company employees
Donations made to local communities and charities
The number of jobs created in the local area
Environmental remediation efforts conducted in the area
The use of renewable energy to power operations
The overall level of energy reduction
Minimal use of landfills

How to Use a Social Impact Statement

Organizations use social impact statements to make a better impression among stakeholders, rather than conveying the image of just being focused on profit-making. These statements may be distributed through multiple channels, such as the annual report, company website, and press releases. They can be a useful tool for investor relations officers, as well a company’s public relations department.

Advantages of a Social Impact Statement

A key advantage of a social impact statement is that it provides the stakeholders of a business with a clear message about the steps being taken by an organization to enhance its positive impact on local communities. Further, because this statement quantifies the impact of a business, it represents a quantitative benchmark for the ongoing analysis of the firm’s performance on a trendline.

Disadvantages of a Social Impact Statement

It can be expensive for organizations to develop and maintain social impact statements. This cost is easily absorbed by larger organizations, but may be a stretch for smaller ones, who can put the money to better use in other areas to boost their profitability. Thus, social impact statements tend to be beneficial to larger entities from a marketing perspective, and ignored by smaller ones.