What is impact measurement?


It’s easy to see how measurement of the impacts of your business will give you information that enables you to look back to evaluate your progress. But it also helps you look forward for more effective planning and program management; motivates you to pay better attention to the social, environmental and economic value that the business creates; and helps you to communicate this value to your people and your key stakeholders.


In order to demonstrate what we mean by impact measurement, lets explore the different types of measurement.


Financial measurement


Financial measurement is the form of measurement that every business is involved in via accounting and the associated reporting. Every key decision that is made in business requires the use of financial measurement to aid the decision making process.




Environmental impact measurement


Every company has some form of impact on the environment, even if it is simply via the purchase of electricity, the use of water, or the amount of frequent flyer miles that employees rack up. With many businesses, their largest impact is not a result of their direct operations but rather via their suppliers and the manufacture of their products.


There is a growing requirement for businesses to report on their impacts and show how they are actively working to reduce any harmful effects of their operations. A business must measure its environmental impact in order to make informed decisions about what changes to implement so as to improve the environmental sustainability of what they do.




Social impact measurement


In contrast to environmental impacts, social impact measurement is about measuring and demonstrating the positive impacts or improvements that the business has created via its operations, in terms of social wellbeing and quality of life. Social impacts can range from the investment in promoting happy, healthy and productive workforces (internally and externally, i.e. with supplier workforces also) to the positive influence a business has within the wider community in which is operates.


An external consultant is able to look at a business and see the impact it is having on the environment and therefore recommend what should be measured. However, deciding what social indicators should be measured is something the business must take care to integrate with its vision, goals and objectives.




Now, the how …


In some instances social impact measurement is likely to be more ambiguous because it relates to longer-term goals, therefore data availability and collection will likely be more challenging. However, knowing what information you want or the indicators you wish to measure at the outset will increase the likelihood that proper measuring processes are put in place as part of your project design – this will make your long-term measurements much less of a headache.


For example, a sustainability goal might be to achieve a workplace with zero-discrimination.  


Measuring the success of this goal may not be achievable for five to ten years and should include a mix of qualitative and quantitative measures. Some of them will be in your control to measure and some of them may need external help. Indicators may include a higher respect for the company among the community it operates in, a higher level of employee engagement in cultural activities outside of the work environment, and more diversity in both your employees and your customers.


However in the short term you can also measure more direct outcomes of your actions. For example, you might be measuring the number of reported workplace discrimination incidents, the percentage of women in management and leadership positions, the value of donations given to local cultural programmes, or the results of a yearly employee satisfaction survey, and so forth.



Good measurement is a key success factor for your sustainability program. Measurement provides:


  • A common and comparable approach to analysing changes over time
  • A framework by which to communicate your performance
  • An increased likelihood that your impacts will be replicated both within your organisation and by others following what you are doing


With proper planning and the development of a robust and relevant sustainability strategy, measurement does not have to be the daunting task that it may appear to be. When there is a purpose and understanding as to why data should be collected, the process is much less painful.



Impact Sustainability provides sustainability strategy workshops and measurement solutions via our advanced sustainability performance management software.