The Methodology Report
The Methodology Report describes the scientific basis for the selection of the social topics and the way the scales are built. The selection of topics is based on our understanding about how companies are dependent on social, human and other capitals in the society they operate in and how they have a contributing or detrimental influence on these.
Each company needs a society that functions well and has a healthy well-educated workforce. If no suitably skilled workforce is available, or if there are many tensions which hampers groups of people to cooperate and communicate, it will have negative effects on the company. The availability of healthy, educated people are examples of characteristics we refer to as the Human Capital of a society. The quality of relationships and the interaction within the society can be seen as the Social Capital in a society. Societies also consist of Natural Capital, Financial and Manufactured Capital such as infrastructure or electricity.
While recognising the dependencies, we can also assess whether companies contribute or have a detrimental effect on these capitals. Examples of contributions are in training, avoiding accidents, sharing infrastructure etc. The picture above illustrates the dependency on the capital flows on the input side and the contribution of the flows at the output side.
Once the topics have been selected the topic scales needed to be constructed. The scales are based on three ideas: setting the baseline (zero level), describing indicators to flag the detrimental behaviour and describing indicators for contributing to the societal capitals. For describing the contributions, we used to Theory of Change to understand what we want to assess. Our focus is on assessing outputs, as we think it is far too difficult to assess outcomes and impacts, as for instance it can take years before an activity results in a substantial outcome.