Social Measures

But how does one value social issues? How do you measure the financial benefit of saving a life or not causing pain to an animal? And should you? Even in purely financial terms (such as calculating the lifetime earning capac­ity for a Nigerian child saved from a disease), these approaches ignore the emotional, ethical, and meaning value of saving or improving a life. There have been no measures, to date, ca­pable of tallying the social benefits of most so­cial and environmental issues. In a 1997 article in Nature magazine, 13 experts from a variety of institutes and organizations calculated the total value of ecosystem services to be between $16 and $54 trillion. The average, which is on the conservative side, is $ззТ. This represents the value that nature provides to us (individuals, businesses, governments, and organizations alike).

In a 1997 article in Nature magazine, 13 experts from a variety of institutes and organizations calculated the total value of ecosystem services to be be­tween $16 and $54 trillion.

Ecosystem services include the following areas:

• Regulation of atmospheric chemical compo­sition.

• Regulation of climate (including global to local temperature, precipitation, etc.)

• Regulation of climate disturbances (damp­ening fluctuations in storms, floods, draught, etc.).

• Regulation of water for storage and access (both agricultural and industrial uses).

• Control of erosion and sediment.

• Control of soil (formation and retention).

• Regulation of nutrient cycles (storage, cycling, processing, and acquisition).

• Treatment of waste (pollution control, detoxification, etc.).

• Control of biological systems—except humans (regulation of populations).

• Provision of habitats for migrating species.

• Production of food.

• Supply of raw materials (organic and inorganic).

• Supply of genetic resources.

• Recreational uses (including sports and tourism).

• Cultural uses (aesthetic, artistic, education­al, spiritual, scientific, etc.).

Those numbers measuring the financial impact of environmental issues are already stagger­ingly persuasive in many cases, but perhaps we

shouldn’t try to measure social benefits in such

1

a way.

Just to give you a taste of what I’m talking about, let’s just look at a list of the potential so­cial issues that concern people (see Table 2.1). For sure, few people track all of these issues, but all of them show up on someone’s radar screen, in one SRI (Socially Responsible In­vestment Fund) screen or another, or become the focus of a protest at some point.

1 The value of the world’s ecosystem services and natural capital, Nature, Vol 387, May 199

TABLE 2.1: 2008 Qualifying and Rating Criteria from Highwater Research

GOOD COMPANY

EMPLOYEES

Intention

Working Conditions

ENVIRONMENTAL

Employee Relations Compensation and Benefits

Genetic Modification

Employee Wellness

Nuclear Power Fossil Fuels

PRODUCT AND SERVICES

Clearcut Logging

Product Accessibility

Hazardous Waste

Societal Contribution

Industrial Farming

Product Design

Animal Cruelty

Extended Producer Responsibility

SOCIAL

SUPPLY CHAIN

Human Rights

Supplier Standards and Selection

Unethical Conduct

Supplier Chain Engagement

Gambling

Supply Chain Transparency

Tobacco

Weapons

WOMEN AND CHILDREN

Fast Food

Employment Practices

Alcohol

Women in Leadership

Sexually Explicit Material Explicit Violence

DIVERSITY

LEADERSHIP

Employment Practices Diverse Leadership

Financial Management

Social and Environmental Commitment

MATERIALS

Social and Environmental Execution

Raw Material Demand

Management / Board Integrity

Material Waste

Stakeholder Engagement

Molecular Waste

COMMUNITY

ENERGY

Community Relations

Energy Demand

Economic Impact

Energy Sourcing

Philanthropy

Energy Efficiency

CUSTOMERS

WATER

Customer Satisfaction

Water Use

Customer Safety

Water Quality

Disclosure and Labeling

CLIMATE

Greenhouse Gases Policy Impacts

Any one of these criteria can break out into de­tailed subcriteria. For example, Animal Cruelty might refer to voluntary or mandatory animal testing of medicines or products, owning zoos or circuses with animals, using animal prod­ucts in the production of products and services, using animal labor, raising animals for food, cruel living conditions or abuse, promoting or reducing animal diversity, and so on. And none of these are standardized or commonly agreed – upon criteria within the categories. Different individuals and groups will expect different performance and adherence.

As you can see, there are hundreds of potential issues of interest to customers, investors, users, and other audiences. Designers don’t need to have a deep knowledge of every issue, but they should take a pass over the list every now and then to be familiar with the variety of issues important to people who are impacted by their solutions. There is no way to address them all, because many are in opposition to one another. For example, some religious-based organiza­tions and investment groups don’t want to

invest in pornography, while others see it as a litmus test of Freedom of Speech. Some don’t want to support Lesbian/Gay/Transgender issues (or, more accurately, support compa­nies that support these causes), while others expressly seek out those that do. Ultimately, you’ll have to make your own choices as to what is important to you, your company, its brand, your clients, and your customers, but you need to have a broad awareness before you can do so.

Aside from the long list of social issues, the difficulty of creating a measurement system for them, and their often mutually-opposed imperatives, we need to address the culture of “optimization” that pervades such viewpoints. In personal finance, for example, the goal is to optimize money in absolute terms. Finan­cial managers are required by law to help their clients realize the highest possible returns. This focus purely on financial measures ignores those same customers’ social values. It’s been very recent that investment funds target spe­cific social issues so that people and organiza-

tions don’t transgress their goals in the pursuit of simply maximizing their funds. For example, labor unions and pension funds are realizing that investing in companies responsible for accelerating the transfer of jobs overseas isn’t in the long-term interest of their organizations. Despite potentially higher returns, many are reprioritizing where they invest in order not to contribute to the problems they face. The same was done by organizations and individuals in the 1980s who didn’t want to support apartheid in South Africa.

More recently, personal financial advisors have helped their clients to balance quality of life issues over optimization of financial returns. In other words, many people are content to earn a little less if it makes them happier to sup­port organizations, companies, products, and goals that are important to them rather than contributing to the very things that upset them in the world. Likewise, the culture of working too much in order to provide the most money possible for our families is changing in favor of earning less in order to spend more time with

our families. These people can’t measure their happiness or satisfaction in financial terms, but they’re often happily accepting lower pay in favor of more meaningful lives.