Phase 5 of the Round table for Product Social Impact Assessment

Companies need a method that is applicable in a business context. The phase 5 of the Roundtable for Product Social Impact Assessment described here aims at building the bridge between science and applicability, and testing if this really works. Since 2017 the companies also want to move from measuring compliance towards measuring progress using the Theory of Change.

by Mark Goedkoop and Ilonka de Beer

Introduction

Since 2013 a group of sustainability experts from over a dozen leading companies have come together in the Roundtable for Product Social Metrics, aiming to make social impact assessment more accessible and meaningful through the development of a handbook for social impact assessments of products and services along value chains.

Development process

The initial step was to bring internal sustainability experts from a few proactive companies together, and discuss how a method can be developed, that can work in a decision-making context as well as for communicating social impacts. After three meetings the companies decided to fund a project to start a development process, which is illustrated in the figure below:

Figure 1: Overview of the 5 development stages

 

The method

The methodology was developed by carefully evaluating existing publications, such as the UNEP-SETAC LC initiative Social LCA handbook (UNEP/SETAC 2009), and comparing this with what companies can realistically handle. The core function of the roundtable is thus to develop a compromise between sophistication and practicability. This also means much effort is spent on developing case studies to test the method and learn how it can be improved.

 

The method is described in a freely available handbook (Fontes et al. 2016). It assesses the impacts on workers, users and local communities using in 19 topics (or impact categories). The previous handbook contained a quantitative and a qualitative version. The quantitative version proved very difficult to use, and was dropped. The qualitative version uses a five point scale. The measurement itself is done with performance indicators. The measured values the value of the indicators determine a position on the 5-point scale. During the fourth phase of the project, the roundtable has also started to work with on-line data collection tools such as the SupplyShift tool and an extension of the method was developed to include an additional stakeholder group – smallholders.

 

Figure 2: The handbook describes two versions of the method; one with a qualitative 5-point scale and a quantitative method. Above an example of the 5-point scale is provided from the previous version of the handbook; the third level is the reference level.

 

As the companies developed about a dozen case studies (mostly internal), much experience was gathered on the practical applicability and we got insights what works and what does not. Furthermore, the recent interests in Sustainable Development Goals (SDGs) and Circular Economy (CE), as well as the experiences from the development of the smallholder extension prompts us to move from measuring compliance to measuring real progress.

 

The planned update

This update has the following elements:

  1. a better link with the SDGs,
  2. a better link with CE,
  3. a full integration with the recently developed fourth stakeholder category: smallholders (Indrane 2017(1)),
  4. moving focus from measuring of compliance to measuring positive (or negative) outcomes, using the Theory of Change (C. Chris et. al (2011),
  5. a more consistent link between indicators and the 5-point scales,
  6. a much more efficient data collection procedures by adding a hotspot screening step before the actual data collection,
  7. experimenting with hotspot databases and tools and finally
  8. making the handbook more in a “how to” mode.

 

Better link to the SDGs

The SDGs brought clarity in the direction society and thus companies will develop. Thus, companies are very active in trying to understand what this means for them and they are trying to understand and communicate to what extent they are and will  be contributing to SDGs. At the end of phase 4 of the project, the consensus was that we need to link the methodology to the SDGs. While this sounds attractive; it is much harder than it seems if one wants to substantiate these linkages. The problem is that the indicators underlying the SDGs are developed for governments and not for companies.

Our research also led to the realisation that in the current handbook the emphasis is on compliance, and not on measuring progress. Companies now agree that indeed we must move beyond compliance and see if an how actors in the supply chain are making progress. The SDGs can never be met without such progress. For these reasons, all the topics are updated to move away from measuring compliance to measuring progress . The Smallholder extension was already developed with this principle in mind. (Indrane et al. 2017(2))

 

More efficient and realistic data collection procedures to assess the supply chain

While pragmatisms and efficiency are in the core of the mission of this roundtable; in practice data collection was really cumbersome. Based on the inputs from some of the roundtable members, the data collection will be split up into two steps. The first step is to perform a screening for hotspots; the second step is the actual data collection from these hotspots. The screening can be done with various tools, like the Social Hotspot database or the PSILCA database on the sector and country level, or more specific with commercial tools, who assess individual companies using human and artificial intelligence to interpret messages that can be found on internet and sustainability reports. The screening is also a good check on the compliance level, as companies will probably never admit in a questionnaire they are not compliant. In the second step questionnaires are used to find out more about the hotspots, via Excel or commercial tools developed for this prurpose.

 

Addressing the use-phase and the Circular Economy Concept

In the previous handbook the impacts in the use-phase were measured in terms of Health and Experienced Wellbeing. Especially the latter proved difficult to apply. A new development is also the popularity of the Circular Economy (CE) concept. It is important to understand that CE is not only about recycling and reuse, but also about reinventing business models, like offering product service systems. This experience and the new CE perspective has led to developing a separate assessment where the product functionality and the services associated with the products are assessed, and where possible linked to the SDGs. The big benefit of this separation is that often a certain business unit has one supply chain, but makes many different products. This means it is not necessary to repeat the data collection each time a new product is developed that uses the same supply chain. Consistent with the CE concept, the end of life processes are handled as if they are part of the supply chain; either for the product at hand or for the next product.

 

Conclusions

Working with companies is a great way to find out what will work in a business context and what will not. This means we are not trying to focus on the best possible science, but we are bringing the science around us on to the table of the decision makers. The companies also find it very important that we also link to other initiatives in this area and we have an open dialogue with science, NGO’s and other initiatives, and therefore our initiative must remain open source and freely available for all.

 

References

UNEP/SETAC. (2009). Guidelines for Social Life Cycle Assessment of Products. Management (Vol. 15). https://doi.org/DTI/1164/PA

Fontes et al, 2016. Handbook for Product Social Impact Assessment, Version 3.0. PRé Sustainability 2016 (https://product-social-impact-assessment.com/wp-content/uploads/2014/07/Handbook-for-Product-Social-Impact-Assessment-3.0.pdf).

Indrane et al, 2017 (1). Small but Complex: Assessing social impacts on smallholders in agri-food sector. Manuscript submitted to the SLCA Conference, 2018 in Pescara.

Indrane et al, 2017(2). Consistent assessment of positive impacts. Manuscript submitted to the SLCA Conference, 2018 in Pescara.

Chris et. al (2011). “A Systematic Review of Theory-Driven Evaluation Practice from 1990 to 2009”. American Journal of Evaluation. 32 (2): 199–226. doi:10.1177/1098214010389321.