Measuring the Social Impact of Corporate Investments has been saved
Measuring the Social Impact of Corporate Investments
Social Impact Measurement Model
Cities clamor for corporate investment, even as the social impact of such spending typically remains uncertain. Companies want to increasingly be able to communicate such benefits to shareholders and other stakeholders. Our new machine learning measurement model, SIMM, seeks to bring data-backed insights to the discussion by helping measure and predict the incremental effect of a large corporate investment on up to 75 social impact measures at a location-specific level.
Company mission that transcends profit
How might corporate investment in a particular location impact the following, four years down the road?
- Poverty rate
- College attainment
- Migration of employees from other counties
- Home values
Traditional economic impact tools couldn’t tell you clearly, yet the ability to quantify the social impacts of a capital investment allows citizens, corporations, governments, and other interested parties to bring data to often fiery debates. This can not only put discussions on an evidence-based footing, but also illuminate opportunities to put in place efforts to accentuate the positives and mitigate the potential negatives.
That’s where the Social Impact Measurement Model (SIMM) comes in.
How social impact measurement can generate insights to drive decision making
Are you a(n)...
- Corporate real estate (CRE) or corporate social responsibility (CSR) leader wanting to measure the social impact of existing operations and estimate the potential impact of future investments in a particular location?
- Senior finance leader or impact investor wanting to make location-specific capital allocation decisions by bringing social impact into ROI discussions, to help make trade-offs among key capital intensive projects?
- Marketing, branding, and communications leader wanting to communicate the social impact of your company’s investments to shareholders, collaborators, customers, and special interest groups to demonstrate the company’s influence on social outcomes?
- Economic developer or policymaker wanting to quantify the expected change in social outcomes when evaluating projects to access funding, report back to stakeholders, and be accountable for social causes?
- NGO executive director wanting to understand drivers for social determinants and evaluate contributions to social causes, at a local level?
Social impact measurement, and specifically SIMM, can help.
How the Social Impact Measurement Model works
SIMM forecasts the incremental impact of a large corporate investment—above and beyond what would likely happen without the investment—at a location-specific level across six categories, and up to 75 measures, of social impact. SIMM measures four years out from the initial investment date and can take a rearview look and analyze investments made up to five years earlier.
The machine-learning algorithm analyzes social measures ranging from child poverty and reading proficiency to carpooling and population migration. While the SIMM does not isolate an investment as the sole cause of a change to a social measure, the model forecasts with a very high degree of accuracy how social outcomes will change because of the size and type of capital investments in a particular geography and industry.
Many of the variables included in the SIMM have been mapped to relevant UN sustainable development goals. Use the arrows below to explore the variables.
SIMM in action: Huntsville Madison County Chamber
Since 2015, the Huntsville Madison County Chamber in Alabama has announced eight investment projects totaling almost $3B, bringing economic benefits, as well as stimulating and advancing social impact. The Chamber leveraged SIMM to analyze the social impacts of these investments. Taken in aggregate, the investments in two specific counties, Madison and Limestone County, were projected to enable several positive community impacts, especially regarding variables that signal upward mobility of the population, such as education scores and employment rates.
Other forecasted improvements included a 4-6 percent drop in child poverty and a 2–6 percent increase in test scores, depending on the county. What’s more, SIMM helped uncover that for Madison County, a mix of manufacturing, data center, and HQ investments was more likely to result in a higher income population with more disposable income, whereas in Limestone County, predominantly manufacturing investments were projected to deliver a similar result.
Want to learn more about the value of SIMM for your organization?
Contact Deloitte’s Location Strategy and Monitor Institute teams to discover how social impact measurement can help generate insights to drive decision-making:
- Deloitte's Location Strategy practice helps companies across industries address their most complex and challenging location and footprint issues. We are objective advisors who remain firmly focused on our clients' priorities while developing and executing location strategies that add value and mitigate risk.
- Deloitte’s Monitor Institute practice works with social impact-focused organizations and their leaders, helping to make the hard choices and take the necessary actions to advance progress on pressing societal challenges.