NEW HANDBOOK | The members of the Roundtable for Product Social Metrics have now published the fifth iteration of the Handbook for Product Social Impact Assessment.

The main improvements are:

• better linkages to international standards
• social topics and reference scales have been revised and are now presented in a separate report: The Social Topics Report.
• More data sources are added for each social topic

On December 10th at 3 p.m. CET  a webinar was organized to give an update and dive further into these improvements.

Learn from the experienced!

How BASF applies datatools
Currently the Roundtable members are further developing the experience with datatools. During the S-LCA Conference in Gotenburg BASF presented  the experience with several of these datatools e.g., Maplecroft, Reprisk, and Ecovadis. These datatools are used to determine and assess hotspots in the value chains. By  doing this several scenarios for production can be evaluated and compared. A video explaining this can be seen here:

Pilot project on using the Handbook for simplified Impact Valuations

Impact Valuation aims to measure the sustainability performance of a product or intervention in monetary terms (see for instance this blog post). This allows the grouping of many different impacts (e.g. environmental and social impacts).  Financial impacts are also much easier to understand than complex scientific indicators for a non-expert audience. Impact valuation studies should not replace comprehensive assessments, but can complement them, and facilitate communication.

The Roundtable participated together with CIRAIG in a pilot to investigate the use of the Handbook for impact valuations.

On this topic a presentation was given during the S-LCA Conference was given. Please view the video here:

Companies start with an ad-hoc case study. This is generally followed by formalizing the use of the metrics in procedures such as a Code of Conduct. A natural step after the “formalize stage”  is for the company to measure and set targets on product social metrics as part of the product portfolio. The development of the capabilities in four different stages  is described in a capability maturity matrix, that was developed by the Roundtable members. The PSM- Capability Maturity Matrix is described in the Implementation Guide, that can be downloaded here and also a video describing the implementation process of product social metrics in a company can be viewed here:

In this video Mark Goedkoop discusses and gives input on requirements of the European Commission towards methodology in relation to policy making. 5 requirements are discussed and the state-of-the art is described.

DSM: implementation of product social metrics

When companies start with implementing product social metrics they might initiate first  an (ad-hoc) case-study. A series of such studies might lead the company to a formalized stage when procedures and responsibilities within the organization are described and aligned with the relevant stakeholders. This stage is described in a case-study report by DSMCase studies, that can be downloaded here (or you can also watch this video presentation:

A natural step after the “formalize stage”  is for the company to measure and set targets on product social metrics as part of the product portfolio. The development of the capabilities in four different stages  is described in a capability maturity matrix, that was developed by the Roundtable members. The PSM- Capability Maturity Matrix is described in the Implementation Guide, that can be downloaded here and also a video describing the implementation process of product social metrics in a company can be viewed here:

A new way of collecting data for Social Metrics

Introduction

The case study performed by Steelcase and Covestro was intended to test the methodology developed by the Roundtable for Product Social Metrics and to try out a new tool for a more convenient data gathering approach. The case was conducted during the 4^th phase of the Roundtable. The idea was to test the feasibility of the methodology to differentiate the social impacts between a solventborne and a waterborne furniture coating. The scales-based approach was chosen for the assessment.

Application of the Methodology

First, the most material social topics relevant for this case were identified and only those topics were assessed. As a feasibility test, Covestro internally checked for available data on the chosen questions.  All necessary data was available and retrievable within the company. Experts from the reporting department were able to fill in the questionnaire with a reasonable time effort (2-3 hours). Supporting the answers with suitable proof documents requires much more effort and time as different experts from various functions need to be involved (e.g. Human Resources/Procurement/Health, Safety and Environment). Due to extensive reporting requirements for public companies, publicly available documents such as the annual report or the GRI report are a good information source on many topics addressed in the questionnaire.

The internal assessment by Covestro of the questionnaire revealed that a comparison between the solventborne and a waterborne system is not easily possible. Many questions are referring to company or plant level data. The scope of the questions was therefore not granular enough to make a distinction between the two technology systems. Adapting the questions to this specific case could be a suitable possibility. The Roundtable questionnaire may serve as a good foundation.

Testing a new tool for data gathering

One outcome of previous pilot cases conducted by Roundtable members was a high effort of data gathering, especially for smaller, private companies. The Roundtable members were therefore searching for more efficient ways to collect the necessary primary data. In this pilot case the SupplyShift tool was tested.

SupplyShift enables the company conducting the survey to create and upload questionnaires to an online platform and send them out to the survey participants. The participants can login to the platform and answer the questions. The surveying company gets immediate feedback on the answers. It is also possible for the participants to forward questionnaires to other companies in the supply chain (multi-tier functionality). Numerous statistical and visualization tools exist within the platform to support the interpretation of the collected data. Compared to the current Excel tool the online solution shows some advantages. Overall the usage is more convenient for the participating companies as well as for the company conducting the survey.

Using this tool is also a more professional way to approach the responding companies. The solution has the potential to reduce the number of mistakes during the fill-in process of the questionnaire and supports the data management process. On the other hand, using a standardized tool comes with less flexibility compared to a self-developed Excel tool. When using the multi-tier function some confidentiality topics still need to be solved. The Roundtable members are currently in discussion with SupplyShift on how to adapt the tool for a perfect fit of the Roundtable needs.

Overall learnings

The methodology of the Roundtable is published in a freely available handbook and was tested in numerous case studies of the participants. Overall the handbook provides valuable guidance to identify and address the most material social topics. From our opinion, the questionnaire is comprehensive and covers all relevant areas. For specific cases (e.g. comparing waterborne to solventborne coatings) some social topics are not directly captured or too generic to differentiate on the product level (e.g. lost working days).

Recommendations

The identified need for a more structured and more convenient data gathering approach is crucial. A tool such as the one tested in this case can be valuable in establishing a more efficient way of data collection. To increase the acceptance among the potential survey participants some questions can already be answered in advance by consulting 3^rd party assured public sources such as the annual report or the GRI report. This helps to reduce the actual number of questions to be sent out to the survey participants. This approach also addresses another challenge experienced. By just relying on self-statements of the value chain actors, a verification of the answers is difficult. Adding sources like externally assured documents or information from third party databases can increase the reliability of the study.

If you would like to know more about the Case Study, the tools and methods used or the Roundtable please contact us.

Abstract

This article explores ways how to systematically address positive impacts in the Handbook for Product Social Impact Assessments (PSIA). The literature concerning positive impacts in SLCA have been reviewed to better define positive impacts in PSIA and create a clearer understanding of aspects that should be assessed at the upper levels of reference scales. Theory of Change (ToC) has been adopted to develop guiding principles for establishing consistent reference scales for each of the social topics presented in PSIA.

Scrutiny of literature sources revealed that the concept of positive impacts is not clearly defined within SLCA methodology and no shared definition can be deducted. For the purpose of the PSIA method, positive impacts are described as activities that provide value to stakeholders and looks beyond mere compliance. Application of ToC in reference scale development would enabled us to clearly define how positive impacts are addressed in PSIA. Assessing intermediate positive performance and ideal performance at different points on the impact pathway, would allow us to create a separation between the upper levels of reference scales and limit potential overlaps.

The next steps are to use these guidance principles to revise and streamline the reference scales currently presented in the PSIA method. Furthermore, applicability of the revised reference scales should be tested on case studies prior to making the method public. Additionally, the method should be subjected to external review process.

Introduction

Social Life Cycle Assessment (LCA) strives to consider both positive and negative impacts of the product life cycle. The UNEP/SETAC Guidelines describes positive impacts as performance beyond compliance with local laws, international agreements or certification schemes (UNEP/SETAC, 2009). It is understood that positive impacts should provide additional benefits to the addressed stakeholders and recognise not only achievement of minimum benchmark.

In the Handbook for Product Social Impact Assessments (PSIA), positive impacts are assessed alongside negative impacts. Data is interpreted, and scores are attributed to each social topic in relation to a five-point scale (Fontes, 2016). The proposed scales are described in generic levels: (i) -2 non-acceptable performance, (ii) -1 intermediate negative performance, (iii) 0 aligned with international standards, (iv) +1 intermediate positive performance and (v) +2 ideal performance (ibid.).

In the initial process of developing the PSIA method, no formal guiding principles were used to establish reference scales for qualitative assessment. Defining a positive impact as intermediate positive performance and ideal performance appears to be too vague and leaves each position open for interpretation. Moreover, the lack of specific guiding principles has led to some inconsistencies in the reference scales presented throughout the Handbook. For certain social topics, benchmarks representing positive impacts capture compliance instead of the best practices e.g. the benchmark “Normal working week does not exceed legal limit or 48 hours for hourly workers. Overtime is voluntary and compensated at premium rate” is considered as the ideal performance for social topic “Working hours” (Fontes, 2016). This distinction appears to be odd as compensation of the overtime is regulated by appropriate laws and should be considered as compliance. Moreover, the reference scales presented in the PSIA method are contradicting with the description of positive impacts outlined in PSIA.

Thus, this work explores ways how to systematically address positive impacts in the Handbook for Product Social Impact Assessment. The aim to explore applicability of Theory of Change (ToC) and how the principles can be transferred to the Product Social Impact Assessment.

Methods

The literature concerning positive impacts in SLCA have been reviewed to better define positive impacts in PSIA and create a clearer understanding of aspects that should be assessed at the upper levels of reference scales. ToC has been adopted as guiding principle for establishing consistent reference scales for each of the social topics presented in PSIA.

Defining positive impacts

Review report on positive impacts in SLCA papers and case studies by Di Cesare et al. (2016) revealed that the concept of positive impacts is not clearly defined within SLCA methodology and no shared definition can be deducted. Authors define positive impacts is a number of different ways that mainly fall under two categories: “The net positive effect of an activity on a community and the well-being of individuals and families” and “An improvement related to the previous situation”. Interestingly, the method by Ciroth and Franze (2011) considers the absence of negative issues as a positive impact. However, study carried out by Di Cesare et al. (2016) emphasise that absence of negative impacts should not be regarded as positive impacts but neutral, which also supported by statements made in the UNEP Guidelines.

In accordance to the to the definitions listed above, this paper views positive impacts as those relating to activities that add/provide value to stakeholders and looks beyond mere compliance. Considering this, assessment of positive impacts in PSIA would now focus on whether supply chain actors are promoting good practices, carrying out interventions to improve conditions and whether the undertaken interventions are creating positive value for stakeholders. The reference scales would aim to assess the effort and will of supply chain actors to manage given social issues (Are the supply chain actors able to make improvements and are they willing to?). Hence, to achieve an ideal performance or positive impact, value chain actors would need to actively contribute.

Establishing consistent refence scales

To establish consistent reference scales for each social topic presented in PSIA, more detailed guiding principles are needed. As each intervention undertaken by the companies to promote good practices can be observed and measured at different points along an impact pathway, we decided to focus on certain points for each level on the reference scales. That is, interventions undertaken to improve working conditions were linked with the Theory of Change.  In the literature, ToC is defined as “A causal flow that illustrates how a proposed set of interventions and inputs will result in specific outputs contributing to different outcomes leading to certain impacts” (Sustainable Food Lab, 2014).

Figure 1 Illustration of Theory of change

We decided to assess the ideal performance as an output from conducted interventions, as it is harder to disentangle the specific effects from interventions on outcome or impact level.  That is, while the link between the carried-out activities and their immediate effects are relatively easy to recognise, this link is harder to acknowledge if performance is measured further down the impact pathway. Moreover, outcomes and impacts can take many years to evolve and manifest. That said, if the Theory of Change for certain inventions is clear, then it is recommended to measure further along the impact pathway e.g. Outcomes or Impacts.

The inclusion of stakeholder experiences and satisfaction with the undertaken interventions and application of though practices served as a way to assess outputs. The approach aims to give voice to the affected stakeholder group. Moreover, the reference scales consider whether good practices are supplemented by continuous improvement and sharing/reporting of the best practices, whereas, the intermediate positive performance was determined on Input and Activity level. More detailed guiding principles for establishing reference scales are described in Table 1 below.

Additionally, the table outlines the general criteria that have to be met for each level on the references scales. For levels 0 and -1, multiple options have been described depending on whether interventions are undertaken or not. For example, the first situation when a score of 0 can be assigned is if the local conditions are satisfactory or for certain social topics certifications can serve as sufficient proof of compliance. In the second situation, interventions are undertaken to improve local conditions (inputs or activities), however, no follow-up assessment is conducted to understand whether stakeholders are satisfied with provided interventions. That is, the usefulness of the activities is not clear.

Table 1 Guiding principles for establishing reference scales developed based on Theory of Change

Conclusions

Scrutiny of literature sources revealed that the concept of positive impacts is not clearly defined within SLCA methodology and no shared definition can be deducted. For the purpose of the further development of the PSIA method, positive impacts are described as activities that provide value to stakeholders and looks beyond mere compliance.

Guiding principles for establishing consistent references scales were proposed based on the Theory of Change. Application of ToC in reference scale development enabled us to clearly define how positive impacts will be addressed in PSIA. Assessing intermediate positive performance and ideal performance at different points on the impact pathway, allowed us to create a separation between the upper levels of reference scales.

The next steps are to use these guidance principles to revise and streamline the reference scales presented in PSIA for each of the social topics. Furthermore, applicability of the revised reference scales should be tested on case studies prior to making the method made public. Additionally, the method should be subjected to external review process.

Contact us if you have questions or comments about this work.

References

• Di Cesare, S., Silveri, F., Sala, S., & Petti. L. (2016). Positive impacts in social life cycle assessment: state of the art and the way forward. International Journal of Life Cycle Assessment, https://doi.org/10.1007/s11367-016-1169-7
• Fontes, J. (2016). Handbook-for-Product-Social-Impact-Assessment-3.0, 1–146.
• Ciroth A, Franze J (2011) LCA of an ecolabeled notebook. Green Delta and Federal Public Planning Service Sustainable Development, Berlin
• Sustainable Food Lab. (2014). Performance Measurement in Smallholder Supply Chains: A practitioners guide to developing a performance measurement approach. Retrieved from http://www.sustainablefoodlab.org/wp-content/uploads/2016/04/Performance-Measurement-Practitioners-Guide-SFL-2014.pdf
• UNEP/SETAC. (2009). Guidelines for Social Life Cycle Assessment of Products. Management (Vol. 15). https://doi.org/DTI/1164/PA

China shares nearly 1/4 of the global manufacturing output by value and makes almost half the world’s goods. It plays a crucial role in the global supply chain. This research is aimed to understand the status-quo of product social impact assessment in China. First the relevant policies were scanned, similar metrics were analyzed, and some related stakeholders were contacted.

Eighteen policies (laws or governmental plans) are examined, including the most recent Five-Years Plan. The company social responsibility related topics are widely mentioned in these regulations and policies. The analysis result (in Table 1) shows that the articles related to stakeholder group “workers” are plentiful and are mostly overlapping with the topics in the Roundtable Social Metrics. However, are only a few items have been found that deliberately relate to the stakeholder groups “consumers” and “local community”.

Table 1 Policy Landscape

The relevant policies and national guidance demonstrate a high-level momentum that the government is trying to push companies to drive socially responsible practices, and the general society also starts paying an increasing amount of attention on these topics. However, the challenge is how the high-level guideline can be embedded into the company operations. Nowadays, on the CSR topics, Chinese companies put primary focus on the environmental impacts, while putting relatively less emphasis on the product-related social impacts.

The government and companies seem eager to learn from external organizations and each other, by organizing forums and collaborating projects. The Sino-Dutch CSR projects were carried out by MVO Nederland, which consists of a number of activities, including desk research, workshops, visits, government dialogue, and CSR tool development. And there was also the Sino-Swedish CSR project and other collaboration projects, aiming to share best practices. These showed the intention of the Chinese companies to learn from the front-running countries.

At the end of 2015, Chinese National Standard (GB / T 36002-2015) Guidance on Classifying Social Responsibility Performance (《社会责任绩效分类指引》) was published by the General Administration of Quality Supervision, the Inspection and Quarantine of the People’s Republic of China, and the Standardization Administration of the People’s Republic of China. This national standard covers a broad range of topics, including Human rights, Labor practices, Fair operation practice, Consumer problem, Community participation and development, Organizational Governance, and Environment topics (see Table 2). This national guidance is officially valid from the 1^st January 2016, and it is considered of great significance as the national standard will help to unify various organizations with a shared understanding of social responsibility. The guidance is expected to provide a systematic and comprehensive guidance to companies, which plays an important role in enhancing the Chinese domestic company social responsibility practices.

Table 2 Topics list of GB / T 36002-2015 Guidance on Classifying Social Responsibility Performance

If you would like to know more about this subject or if you want to share your thoughts, please contact us.