Social Value Analysis
Social Value Analysis
For many organizations, both government and corporate, it is increasingly incumbent upon them to understand their value beyond economics and finance and evaluate their role in generating social value. In financial markets, as concerns about environmental and societal changes and inequalities are increasing, many ESG investors are eager to identify and generate both business and social returns.
The term social value is a nascent concept that continues to evolve. While the reporting of ESG impacts is now standard practice for a bulk of the world’s large and mid-cap companies, it unfortunately is confined to marketing information about commitments and processes and rarely measures or quantifies the actual impact on individuals and society in a useful way that allows investors to understand rates of human return.
As socio-economic modelling experts that have had over 20 years of experience in dealing with the complexities and dimensionalities of societies, we have made great progress towards a scientifically valid way of measuring social value and social impact.
Given our dedication to the agent-based modelling of the preferences and behaviours of millions of individual people, we have made significant investments in surveying over 100,000 people of different circumstances to measure and quantify social behaviours, self-perceptions and preferences. These databases have been combined with Canada’s largest socio-economic simulation platform to yield a rigorous and defensible framework within which social value can be analyzed and interrogated.
Social Value Services
We provide the following independent services to those organizations that are serious about their social value endeavours:
- Social value contribution and impact statements and reports at the organizational, investment and project level.
- Social value of infrastructure, housing and urban planning in support of policy advocacy.
Partnerships that allow us to support an organization’s internal social value initiatives, such as:
- Social value product and service design.
- Investment optimization analysis.
- Business case analysis for potential investors.
- Social value financial statements and related human resource decisions such as social value performance-based compensation packages.
Advantages of Our Social Value Approach
Context dependent
The generation of social value is highly contextual. The arrangement of resources and policies can create different social value outcomes. This is important if you want to use the calculus of social value for:
- Product and service development: Insert social value measures into your product and services design processes to maximize social value impacts. The design of the form and function of real assets and financial products drive some measures of social value in ways you’ve likely yet to anticipate.
- Value optimization methods: that find solutions that maximize both financial and social returns.
- Communications and marketing narratives: The ability to trace and attribute sources of social value supports your communications and marketing efforts as they design high-impact, person-centric narratives that differentiate you and increase your relevance in a competitive market.
- Forecasting and net present value analysis: Social value forecasting requires individual longitudinal modelling to ensure the changing circumstances of people (time and space) are taken into account.
- Managing reputational risk: While organizations pursue social value metrics to bolster their market relevance and to entice customers and investors, there is a significant reputational risk if they get it wrong. Examples of erroneous results include:
- People are modelled as groups and averages, rather than as individuals modelled independently for their unique set of circumstances.
- The stock and flow of individual people are not respected which gives rise to double counting and person substitution errors.
- Analysts try to net present value social value metrics using the usual discounting methods in finance and economics (term structure of interest rates) instead of using a person’s unique preference structure.
Reported in monetary terms
Our robust methodology converts the various units behind social value metrics appropriately into financial terms to allow for comparisons, optimizations, forecasts, and social value-based compensation packages, such as:- Cost-benefit and rates of return analysis can be performed utilizing traditional methods and net present values.
- Ability to forecast, plan and scenario test social value impacts and their optimizations.
- Comparisons between competing investments and policies so as to be able to use ‘investment optimization forms and functions’ in order to maximize both financial and social returns.
- The ability to build a social value balance sheet and annual net social impact statements for an organization’s reporting needs.
- A reliable and robust means of measuring social value in time to support the compensation packages of your investment, product and services decision-makers.
- Supporting the NPV of future social values in combination with individual preference structures.
We provide the following independent services to those organizations that are serious about their social value endeavours:
- Social value contribution and impact statements and reports at the organizational, investment and project level.
- Social value of infrastructure, housing and urban planning in support of policy advocacy.
Partnerships that allow us to support an organization’s internal social value initiatives, such as:
- Social value product and service design.
- Investment optimization analysis.
- Business case analysis for potential investors.
- Social value financial statements and related human resource decisions such as social value performance-based compensation packages.
Context dependent
The generation of social value is highly contextual. The arrangement of resources and policies can create different social value outcomes. This is important if you want to use the calculus of social value for:
- Product and service development: Insert social value measures into your product and services design processes to maximize social value impacts. The design of the form and function of real assets and financial products drive some measures of social value in ways you’ve likely yet to anticipate.
- Value optimization methods: that find solutions that maximize both financial and social returns.
- Communications and marketing narratives: The ability to trace and attribute sources of social value supports your communications and marketing efforts as they design high-impact, person-centric narratives that differentiate you and increase your relevance in a competitive market.
- Forecasting and net present value analysis: Social value forecasting requires individual longitudinal modelling to ensure the changing circumstances of people (time and space) are taken into account.
- Managing reputational risk: While organizations pursue social value metrics to bolster their market relevance and to entice customers and investors, there is a significant reputational risk if they get it wrong. Examples of erroneous results include:
- People are modelled as groups and averages, rather than as individuals modelled independently for their unique set of circumstances.
- The stock and flow of individual people are not respected which gives rise to double counting and person substitution errors.
- Analysts try to net present value social value metrics using the usual discounting methods in finance and economics (term structure of interest rates) instead of using a person’s unique preference structure.
Reported in monetary terms
Our robust methodology converts the various units behind social value metrics appropriately into financial terms to allow for comparisons, optimizations, forecasts, and social value-based compensation packages, such as:- Cost-benefit and rates of return analysis can be performed utilizing traditional methods and net present values.
- Ability to forecast, plan and scenario test social value impacts and their optimizations.
- Comparisons between competing investments and policies so as to be able to use ‘investment optimization forms and functions’ in order to maximize both financial and social returns.
- The ability to build a social value balance sheet and annual net social impact statements for an organization’s reporting needs.
- A reliable and robust means of measuring social value in time to support the compensation packages of your investment, product and services decision-makers.
- Supporting the NPV of future social values in combination with individual preference structures.
