Our partners invest and pioneer in Product Social Impact Assessment as they understand how essential it is to support better decision-making and reporting.

Applications

The motivations of the Core Partners to invest in the development of the Handbook reveals that they see a clear business case, as they see concrete applications. While each company has its own strategy and ambition regarding sustainability, we highlight a few commonly mentioned applications to illustrate the power of social metrics covering the entire value chain.

Steering product portfolios:
Many companies have started to assess their product portfolios focussing on environmental impacts, now they add the social dimension in the 2022 Whitepaper

Improved reporting over the entire value chain;
Reporting on social topics is often limited to tier 1, and often reports only contain issues that are convenient to report. In the 2022 Whitepaper, our core partners sat together and described how they use the Handbook to improve reporting

Mitigating risks, better sourcing:
Using materials from supply-chains where social impacts are unacceptable is a risk. However understanding these beyond Tier 1 is a challenge which we have addressed extensively.

Preparing for Due Diligence requirements
The release of the IIRC Guidelines is based on the same thinking as we developed in the Handbook; reporting on social issues will be key when policies that require Due Diligence become mainstream.

Reporting against the SDGs:
Many performance indicators in the SDG framework relate to social issues. In a separate project we are creating a strong and rational link between the SDGs and the Product Social Impact Assessment.

2022 Whitepaper on Portfolio Assessment

2022 Whitepaper on Reporting

Mitigating risks, better sourcing

Webinar on Due Diligence requirements

2022 Whitepaper on Portfolio Assessment

Proactive companies are aligning their strategy with what they expect to be the future societal needs and market trends. It is increasingly clear such needs and market trends will be highly influenced by the transition towards a sustainable society. The internationally agreed Sustainable Development Goals (SDGs) are a clear source of inspiration as it makes clear what the world is targeting by 2030. More recent trends confirming this, are developments like Green Deals, the Due Diligence legislation, Taxonomy, and the trend towards Integrated Reporting addressing the needs of the financial communities.

Towards a future proofed Portfolio
An important tool to prepare for this future world is Portfolio Assessment, which aims to understand which parts of the portfolio are challenged by these developments and which can be understood as a winner in the future. Portfolio Assessment often focusses only on the environmental and economic capitals, while the SDGs and other sustainability frameworks also explicitly address the social and human capitals. In this white paper we show how two proactive partners of the Social Value Initiative1 use the PSIA Handbook2 to consistently add also the social and human capital perspective.

Purpose of the Whitepaper: answering 3 questions
The purpose of this white paper is to inspire companies that want to add the social angle to their portfolio management. The white paper is based on the collaborative effort of two proactive members of our initiative: DSM and Corbion who, together with PRé developed this whitepaper during 2021 and 2022. The Whitepaper captures the inputs and discussions between Alexandra Florea from DSM and Ana Morao from Corbion and focusses on three questions:

  • Strategy and Policy: How to embed a purpose driven strategy with clear objectives
  • Methodology: How to efficiently and effectively assess impacts
  • Process: How to embed these procedures in the organization

DSM and Corbion developed consistent procedures to include social assessments in their procedures, both are using the Handbook as the key reference. The PSIA Handbook provides the basis for defining the relevant and material social topics and procedures to understand both the value chain impacts and especially the impact on the users. While discussing the different approaches of the companies, we found that there are a number of choices that are interesting as an input to further discussions and development.

The Whitepaper can be downloaded from Here

2022 Whitepaper on Reporting

During 2021 our core members from Corbion, DSM and Fuji-Oil sat together and shared their views and experiences how the Handbook is already helping to improve their sustainability reporting. The discussions cantered around three questions:

  • Why are we looking for improved reporting​?
  • How is improved reporting implemented​?
  • What are the benefits of using the Handbook in improved reporting?

In the report the answers are provided that can be summarised as follows:

Why are we looking for improved reporting​?
The primary reason for all three is that the companies had already formulated ambitions targets and policies, and all felt they needed to further develop the metrics to support these policies. There is also a strong connection to the upcoming regulations such as the Due Diligence and Taxonomy law in Europe and other reporting requirements

How is improved reporting implemented?
The companies in this group had a similar procedure, which usually has the following steps:

  • Materiality assessment and hotspot analysis in the value chain (similar to what is described in the Handbook
  • Management approach, including target setting, development of governance structure, data collection
  • Impact assessment and preparing the communication do different audiences and preparing for upcoming legislation.

What are the benefits of using the Handbook in improved reporting?
The materiality assessment, and the availability of a well defined broad scope social topics were a very important contribution to the improved reporting cycle. It helped to provide focus and it supported target setting. Another important benefit is the approach to screen the entire scope three in the hotspot identification phase and the data tools we discovered and started to use during our journey. This is very important as most ESG reporting focusses not further then tier 1 of the supply-chain. The Due Diligence legislation typically requires to identify social hotspots in the entire value chain.

The Whitepaper can be downloaded from here.

Creating a robust and documented link to the SDGs

Many companies link their targets to the SDGs. However, the SDGs were not really developed for the private sector, and many targets are not really actionable or hard to interpret. Commissioned by the UNEP Life Cycle Initiative, PRé and LCA 2,-0 developed a report that contains documented linkages between Social LCA, Environmental LCA and the SDG Targets. While this project is not an activity form the Social Value intiative, it is a good example of how the Handbook can be an important basis for linking to the SDGs in a less ad-hoc way as is often done. You can find more on reporting against the SDGs in this interim report presentation of the SDG project here.

The Illustration below provides an example of how one of our members, Corbion) aligns its targets to the SDGs with a direct reference to the Handbook. For more information on the Corbion approach: Click here.

Mitigating risks, better sourcing

Sourcing from supply-chains where social impacts are unacceptable is a risk. However understanding these beyond tier 1 is a challenge which we have addressed extensively.

BASF

In the Implementation guide (page 31), BASF had submitted the following quote:

At BASF more and more, strategic decision-making processes require holistic sustainability assessments including social impacts. We developed our Social Analysis within the SEEbalance® method, see figure 5.6, based on the guidelines of the Handbook. A harmonized method that delivers meaningful results help decision-makers in their work to consider sustainability aspects based on a sound methodology. As it is common today to consider environmental impacts, it will be standard to consider social impacts as well. Furthermore, Social Analysis identifies improvement opportunities and can support the definition of priorities of activities.

The Social Analysis that BASF applies, delivers completely new findings because the approach is significantly different to the classical LCA approach and not just a repetition of an LCA with different figures. We extended that approach to agro business as well with the AgBalance method. Both methods are implemented by the sustainability strategy department and is run all over the world with the same approaches. That ensures the same mode of work and allows the comparison of findings as well as the collaboration with different sustainability centers in the world. Sustainability Strategy has the worldwide responsibility for the assessment methods and will implement applicable, accepted and harmonized methods based on different standards. ISO standards can play here an important role in the future. Furthermore, the workload must be acceptable, to generate a relatively high output of studies per year at reasonable costs. The results must be transferred to easy understandable final results to give guidance for non-experts as well.

ArcelorMittal

The implementation guide also contains reference to the work done by ArcelorMittal

Over the years ArcelorMittal has developed expertise and knowledge on environmental life cycle assessments. As part of the sustainability journey, ArcelorMittal has explored social value of steel and is developing experience in the field of social life cycle assessments. During phase 6 of the Roundtable, ArcelorMittal performed a case study intended to evaluate the two social life cycle assessment databases currently available on the market: Social Hotspot Database (SHDB) and Product Social Impact Life Cycle Assessment (PSIA) data-base. The main goal of the case study was to gain experience and develop working knowledge of the two databases. The intent was to develop an illustrative example that could be used to transfer the lessons learned to wider audience within ArcelorMittal, thus raising awareness within the company and initiating discussions.

The report and overall learnings show a number of weaknesses in these databases. The overall conclusion is formulated in this way: All in all, this study suggests the results from the databases can provide a good starting point for evaluating social risks associated with production of steel, different product systems, etc. Social life cycle database can complement the existing knowledge of social risks or highlight the areas that require further investigation. However, the raw results the social life cycle databases should be used with caution due to uncertainty de-rived from the input-output models, the social data used and use of worker-hours as an activity variable.

Webinar on how we believe the Handbook helps fulfilling the Due Diligence requirements

The upcoming EU Due Diligence legislation will require companies to apply the Guiding Principles on Human Rights and the OECD Guidance for Responsible Business Conduct. Companies do not only need to report, but also act, prevent and mitigate. Companies and even the management can be kept personally accountable if Human rights of actors in the supply chain are compromised.

While the consequences are significant, the legislation is not very specific about what needs to be done and how human rights violations should be recognised and addressed. In this Webinar we will present the backgrounds on the legislation and our analysis of the skills, tools and insights companies need to help to identifying hotspots and human rights related risks.

This webinar is based on the discussions between the Core partners in the Social Value Initiative. You will learn, what the Due Diligence legislation entails, what the requirements are and how the toolset developed in the Handbook for PSIA can be a great starter. The Core partners are currently further developing our insights around this topic; this may result in another Whitepaper

The presenters at the webinar are:

  • Mark Goedkoop: Founder of PRé Sustainability and Social Value Initiative.
  • Haruka Yamada: Sustainability Specialist Fuji Oil
  • Tabea Boeglin: Human Rights Specialist of Richemont International SA
  • Ilonka de Beer; Program Manager of the Social Value Initiative

The slides of these events can be found here

The recording of the this webinar can be found here