Quantifying the Social Dimension of Triple Bottom Line

This is the author-manuscript version of this work - accessed from

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Miller, Evonne and Buys, Laurie and Summerville, Jennifer A. (2007) Quantifying the
social dimension of triple bottom line: Development of a framework and indicators to
assess the social impact of organisations. International Journal of Business Governance
and Ethics 3(3):223 -237.
Copyright 2007 Inderscience

Quantifying the Social Dimension of Triple Bottom Line:

Development of a Framework and Indicators to Assess the
Social Impact of Organisations

Miller, E., Buys, L. & Summerville, J.

International Journal of Governance & Business Ethics

Key words: social dimension of triple bottom line reporting, quantitative indicators,
corporate social responsibility, sustainability reporting.

Quantifying the Social Dimension of Triple Bottom Line

Abstract
Triple bottom line (TBL) reports, outlining the economic, environmental and social
impact of organisations, are increasingly viewed as a business requirement.
Unfortunately, with no one established standard against which to evaluate or assess the
social dimension, current social reporting is often disparagingly described as a public
relations exercise with limited accountability, consistency or comparability. Global
sustainability frameworks, whilst providing a valuable outline, do not provide
quantifiable indicators or specific questions that enable the measurement and
comparability of social impacts. The lack of valid, comparable and quantifiable social
indicators diminishes the importance and value of the social dimension, with businesses
able to make vague and unsubstantiated comments about their social value and impact.
This article outlines the development of a generic TBL social impact framework and
questionnaire designed to quantify an organisations social impact. Based on valid preexisting measures appropriate for organisations in the industrialised world, the proposed
framework and questionnaire offers a comparable and objective social impact
assessment tool for organisations. The aim is to prompt informed debate and discussion
about current organisational social impact reporting, whilst providing organisations with

Quantifying the Social Dimension of Triple Bottom Line

a tool which enables the identification, quantification, and comparability of social

impact reporting.

This article outlines the development of a generic triple bottom line (TBL) social impact
framework and questionnaire designed to objectively quantify an organisations social
impact. With no one established standard against which to evaluate or assess the social
dimension, current social reporting is often disparagingly described as a public relations
exercise with limited accountability, consistency or comparability. Thus, to enable the
measurement and comparison of organisations social impacts, this paper describes the
development of a social framework with valid, relevant and comparable social
indicators that begin to compare with existing economic and environmental measures.

1. The Emergence of Triple-Bottom-Line as a business requirement

In 1995, John Elkington first coined the term triple bottom line (TBL) to reflect that
organisations have economic, environmental and social impacts, consequences and
responsibilities. The TBL concept, by emphasising and integrating the three key
dimensions of sustainable development, profits, planet and people, forced corporations
to widen their circle of responsibility and focus, for the first time, not just on the
economic value that they add, but also on the environmental and social value they add
or destroy (Elkington 2004, 3)

Quantifying the Social Dimension of Triple Bottom Line

In the decade since Elkington first defined TBL, the business community has
increasingly accepted TBL, and associated concepts, such as social and ethical
accounting, auditing and reporting (SEAAR), corporate citizenship and corporate social
responsibility (CSR), as essential elements of business (Cramer 2003; Holme and Watts
2000). Indeed, Waddock et al. (2002) believe one of the greatest pressures on businesses
today is to be socially accountable, with the international Millennium Development Poll
on Corporate Social Responsibility finding that 45% of respondents believed that
companies should set higher ethical standards and help build a better society (Birch
2002, 4-5). In response to these societal pressures and expectations, leading
corporations are members of professional organisations that emphasise the importance
of TBL and CSR, such as the World Business Council for Sustainable Development
(WBCSD), the Prince of Wales Business Leaders Forum in Britain and Business for
Social Responsibility in the United States, and are releasing TBL and sustainability
reports addressing their economic, environmental and social performance.

2. The social dimension of TBL

Unfortunately, despite the growing popularity of CSR and TBL in the business
community, there is currently a lack of clarity and consensus regarding what constitutes
the social dimension of TBL. At a broad level, it requires measuring and assessing an
organisations impact on the social systems in which it operates, at a local, national and
global level (Elkington 1998) Yet, there remains vast disagreement about how best to
define, measure and report on an organisations social impact (Suggett and Goodsir
2002). For example, at a recent Prince of Wales Business Leaders Forum, John
Elkington scored the current state of social TBL reporting as a only 1 or 2/10, compared

Quantifying the Social Dimension of Triple Bottom Line

with 3 or 4/10 for environmental accounting and 8/10 for financial accounting (as cited
in Davenport and Low 2001). This comparatively low score for the social dimension
reflects the difficulty businesses are having in understanding and assessing their social
impact.

At a global level, there are several universal standards and guidelines designed to
measure the social dimension of TBL. Labuschagne, Brent and van Erck (2005)
thoroughly review the four most popular global sustainability frameworks that outline
social category indicators and guidelines. These include the Global Reporting Initiative
(GRI) which considers economic, environmental and social indicators, the United
Nations Commission on Sustainable Development Framework (UNCSD; economic,
environmental, social and institutional), Sustainability Metrics of the Institution of
Chemical Engineers (economic, environmental and social; focus strongly on
environmental) and Wuppertal Sustainability Indicators, which like the UNCSD
approach noted above, develops a Corporate Development Index based on quality of
industrial relations and labour conditions, maintenance of human capital (through
education), and income.

However, whilst these global sustainability frameworks provide some broad direction in
the types of issues relevant for the social dimension, they provide little practical
guidance about how organisations should define or measure social issues. The current
social indicators, with the emphasis on child labour, minimum wage and respecting
human rights, may not be relevant to companies operating in developed countries. In
addition, the indicators are vague in terms of clear or recommended measures of social

Quantifying the Social Dimension of Triple Bottom Line

impact. That is, although the types of social issues organisations should focus on are
outlined, organisations are not provided with a commonly accepted tool or method with
which to measure these issues. The lack of a simple and feasible tool with which to
measure social impact, and without an agreed set of quantifiable standards and targets,
the reality is that the social component of TBL may prove to constitute little more than
good old-fashioned Single Bottom Line plus Vague Commitments to Social and
Environmental Concerns (Norman and MacDonald 2004, 256). For example, the GRI,
which is the most widely accepted framework and the only recognised international
initiative that focuses on reporting the sustainability of the entire organisation
(Labuschagne et al. 2005), identifies four core social performance indicators but does
not provide standardised questions and encourages business to develop their own
measures of social impacts. Similarly, the Institute of Social and Ethical AccountAbility
(ISEA, AccountAbility, 1999) has the AA1000 standard, which focuses on the
processes through which organisations report on their impact (Adams 2004). Notably,
whilst Labuschagne et al. (2005) have outlined four main social sustainability categories
(internal human resources, external population, stakeholder participation and macrosocial performance) and are in the process of developing specific indicators for
manufacturing organisations, there is currently no clearly established quantifiable
standard against which organisations can measure and evaluate the social dimension of
TBL.

3. Limitations of current social reporting

From a theoretical perspective, two key limitations with the existing ad-hoc approach to
the social dimension are validity and comparability. First, in terms of validity, as

Quantifying the Social Dimension of Triple Bottom Line

organisations emphasise the elements and aspects of social impacts that best suit them,
the majority of current social reports are often based on little more than selected case
studies that inevitably favour the company. This popular story-telling approach, and the
wide-spread misapplication of qualitative methods in TBL, cannot produce sufficiently
valid, generalisable or credible information. Second, in terms of comparability, the lack
of quantifiable and comparable social indicators means that organisations are able to
make unsubstantiated comments based primarily on case studies demonstrating their
social successes or pre-existing social, economic and demographic data. The lack of
consistency and critical external evaluation ensures that current social reporting is often
disparagingly described as little more than a clever positioning strategy and public
relations exercise (Hedberg and von Malmborg 2003; Tschopp 2003) with Monaghan
(2004) suggesting that a lot of what is published is a waste of paper (p147). Tellingly,
(Norman and MacDonald 2004) argue that there needs to be a systematic way to
calculate an organisations overall social performance;
For all the talk of the novelty of the TBL idea, and for the
importance of taking all three bottom lines seriously, nobody (as
far as we know) has actually proposed a way to use the data on social
performance to calculate some kind of a net social bottom line
(p249).What is lacking in the ethical/social realm is an obvious,
and obviously measurable, common currency" (whether in a
monetary or non-monetary sense) for expressing the magnitude of all
good and bad produced by the firms operations (Norman and
MacDonald 2004, 251-252)

This situation has led to the social dimension of TBL being described and dismissed as
a vague concept that owes more to rhetoric and ignorance to practice and
transparency (Gray and Milne 2004, 76). Subsequently, until a common currency for
the social dimension is identified, along with the appropriate methods, indicators and
benchmarks required to make reliable and valid claims about an organisations impact,

Quantifying the Social Dimension of Triple Bottom Line

social reporting is likely to continue to be subject to these kinds of criticisms. Indeed,

Kakabadse, Rozuel and Lee-Davies (2005) describe CSR as a woolly reality which
lacks a commonly accepted framework, arguing that there is a real need to establish
standards and quantifiable indicators to measure and monitor performance on economic,
social and environmental practices (p297).

4. Facilitating social reporting in the business world

Essentially, for the social dimension of TBL to be meaningful and relevant in the
corporate environment, it must met certain key criteria and utilise a quantifiable
approach. First, the measurement of the social dimension must be compatible with
existing business practices. Second, to ensure accountability, social impact practices
need to be valid, comparable and generalisable. Third, to facilitate both useability and
acceptability of social reporting in the business world, the development of a
standardised measure is desirable. Finally, with current global sustainability frameworks
providing little practical guidance in terms of defining and measuring social impacts,
there is an implicit demand for the development of an agreed set of quantifiable
standards and targets;
By contrast to most of the environmental issues, we find that with
social progress it is much more difficult to set targets and report
progress. We do this, and you can read about it the BP social report
on the internet, but is accomplished much more by story telling than
by quantification. And I think we are inherently less comfortable
with this approach (Bulkin 2003, 8)

The development of a generic quantifiable measure for the social dimension of TBL
would enable the measurement and comparison of social impacts, thereby facilitating
the acceptance, uptake and validity of social reporting in the business world.

Quantifying the Social Dimension of Triple Bottom Line

5. Developing a framework and questionnaire

The process of identifying appropriate quantifiable measures which assess the social
impact of an organisation or industry is a challenging undertaking. However, as the key
criticisms of existing social indicators centre around issues of validity, comparability
and benchmarking (Norman and MacDonald 2004), utilising pre-existing international
and national measures, although they may not have been developed specifically for the
purpose of social TBL assessment, provides a strong conceptual and practical
foundation. The key advantage of building on pre-existing measures is that they offer a
benchmark and the establishment of future targets and social goals; comparisons to
national or international standards and norms provide a basis for identifying certain
problems or issues, and understanding where the industry or organisation might be
producing negative impacts that need to be addressed and mitigated or positive impacts
that need to be explored further. Notably, whilst the ability to make international
comparisons is advantageous, it is essential that organisations first understand and
quantify their impact on a national scale. Hence, although the majority of the proposed
measures are internationally validated, some were selected primarily because of their
appropriateness for the Australian setting and presence of existing norms (e.g., Quality
of Work Life of Australian Employees Index). Organisations do not necessarily have to
utilise identical measures when quantifying their social impact, and may rather choose
to use comparable measures that are more culturally-appropriate or widely used in their
country. The current measures, however, are proposed specifically for the Australian
context and for the use of a large agricultural and food manufacturing industry.
Importantly, as this is the first large-scale attempt to quantify the social impact of an

Quantifying the Social Dimension of Triple Bottom Line

industry, we expect this framework and survey to prompt debate and be refined over
time.

The first challenge is defining the social dimension of TBL and selecting the
appropriate measures, scales and questions which accurately identify, measure, and
evaluate this dimension. The reality is that developing a questionnaire that addresses
every aspect of the social or the way in which a company may impact on society and
communities would be nigh impossible, however some trade-offs and decisions need to
be made to ensure that SIA is not forever condemned, patronised and sidelined, for the
sake of it not being perfect or possible. Proponents of qualitative SIA, while their
intentions are ultimately good, have often stalled its progress on the basis that the
frameworks, models or approaches, are not adequate or holistic enough. For example,
Vanclay, 2004) argues that:
TBL was meant to be a philosophy about corporate social
responsibility, not a decision algorithm. This way of thinking should
not degenerate into a simple set of indicators. A push to a language
of accounting or economics is likely to ignore many of the truly
social issues. The experience of SIA has shown that there needs to be
a focus on the things that count, not the things that can be counted
(Vanclay 2004, 74).
Whilst we believe qualitative SIA is preferable for development-orientated issues, we
pragmatically accept that a quantifiable approach is essential to facilitate the acceptance,
uptake and validity of social TBL reporting in the business world. Although is not
reasonable or doable to expect an SIA to cover every possible impact resulting from
business practice, current practice, which typically limits SIA to internal indicators
(e.g., employee health and safety) or social philanthropies (e.g., donations to charity)
does not fully capture the original wellbeing philosophy underpinning CSR and social

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TBL. Moreover, in essence, the basis for any SIA is making decisions about what is
most important to incorporate and measure. With that in mind, a number of scales and
existing data were explored in order to identify the best and most widely accepted
measures that coincided with the social dimension of TBL.

Crucially, when business refers to the social dimension, it is often broadly

conceptualised and defined as social wellbeing (Elkington 1998). For example,
corporate social responsibility is defined as the commitment by business to contribute
to sustainable economic development, working with employees, their families, the local
community and society at large to improve their quality of life (WBCSD 2002, 3),
whilst Murray, Dey and Lenzen (2006) recently argued that:
the purpose of trying to assess the social impact of doing business is,
presumably, to help understand and account for the consequences of
doing business on the social well-being of communities affected by
that business. This implies that with understanding comes action to
maintain or improve social well-being for everyone (Murray et al.,
2006, 6).

Given these definitions, the conceptualisation of social impact as wellbeing

dominated the selection of measures and the development of this generic and
quantitative social impact assessment tool. Notably, whilst an exact definition of social
wellbeing is surprisingly elusive, in the academic literature wellbeing typically
encompasses indicators of both individual quality of life and societal cohesion
(Australian Bureau of Statistics, 2001).

The second challenge is to identify the key stakeholders; that is, the people who are
potentially impacted by the organisations social practices. According to the University

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of Greenwich Natural Resources Institute (2003), responsible businesses should hold

themselves accountable to the three broad areas where they can have a positive impact:
workplace, communities and the national economy. More recently, Labuschagne et al.,
(2005) identified four key social criteria, specifically internal human resources, external
population, stakeholder participation and macro social performance. At a minimum,
therefore, it can be argued that organisations have two levels of social impact; internal
(i.e., employees) and external (i.e., customers, suppliers, local community and society).
This distinction is critical, as whilst organisations have long acknowledged the value
and importance of fostering employee satisfaction, only recently has there been a
paradigm shift of businesses taking responsibility for their social impacts on external
communities (Labuschagne et al. 2005, 382). Although, to date, the external dimension
of social TBL is typically measured in terms of the dollar value of sponsorships and
other community involvement activities or initiatives, there is increasing recognition
that businesses must embrace the TBL and CSR holistic philosophy of promoting social
wellbeing rather than just donating money to causes. Henderson (2001) captures the
wider essence of the TBL philosophy, arguing that:
it identifies a new and enlarged responsibility for businesses today in
contributing to both the well-being of society in general and the
integrity of the natural environment. To emphasise 'social'
responsibility in this way is not to neglect or disregard the interests
of the business, but to place them in a wider context, to reassess them
(p11).

6. The proposed social impact framework

The proposed framework and questionnaire outlined in Figure 1 below quantifies social
impact as comprising of a standard socio-demographic profile and four key elements of
social wellbeing; individual wellbeing (measured by the World Health Organisation,

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Quantifying the Social Dimension of Triple Bottom Line

Quality of Life scale, 1998); community wellbeing or social capital (measured by Social
Capital scale, Onyx & Bullen, 2000; employment experiences (based on Quality of
Work Life of Australian Employees Index,

Considine & Callus, (2002); and

organisational or industry impact. We view these four key elements as the minimum
requirements for any organisational social impact assessment. The first two social
impact categories, individual and community wellbeing, are an attempt to quantify the
wellbeing aspect of social impact, at both an individual and community level. The last
two social impact categories focus on the more traditional conceptualisation of social
impact, capturing employees experiences in their workplace and perceptions of the
organisation or industry. Note that we have, at this time, excluded information that is
readily available at a corporate level, such as specific employee-assistance programmes
or financial donations to local, national or international causes. The primary focus of
this measure is to define and capture the wellbeing dimension articulated in the
definition of social impact which is, in our opinion, seldom quantifiably measured by
business.

There are a minimum of two social impact levels, which we term internal (i.e.,
employees & suppliers) and external (i.e., customers & community). This external and
internal dichotomy provides a simple way to conceptualise how social practices impact
on key stakeholders, emphasising the dual responsibilities organisations have not only
to employees and suppliers but to local communities and consumers affected by
corporate practice. To date, the internal dimension of social TBL is most commonly
measured, simply because most organisations already possess data on employee
satisfaction, experiences and other aspects of health and safety. The extent to which

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Quantifying the Social Dimension of Triple Bottom Line

such information on work-related variables truly assesses the entire social dimension of
TBL is debatable, however. Typically, the external dimension of social TBL is
generally measured in terms of the dollar value of sponsorships and other community
initiatives, which is not the intent in the original definitions. Hence, the proposed
framework and questionnaire utilises measures of individual and social wellbeing.
Figure 1 outlines the benefits of measuring these key social impacts at the employee and
community level, as well as a possible outcome and the most obvious applications of
the results.

INSERT FIGURE 1 ABOUT HERE

This proposed framework and survey offer an important first step towards developing a
generic measure of an organisations social impact that acknowledges and assesses the
wider impact an organisation, and its employees, has on the character of a community.
By investigating how employees and community residents perceive the organisation or
industry, as well as their work experiences, individual and community wellbeing, this
social impact assessment survey endeavours to capture the essence of social impact as
originally defined in social TBL as social wellbeing (Elkington 1998). An outline of the
content of the questionnaire, including several illustrative questions, is provided below.
The questionnaire, which currently comprises of a total of 179 items (17 demographic,
26 individual wellbeing, 34 community wellbeing, 45 employment experiences and 57
organisational/industry impact), is currently being tested and will be refined over time.
As this survey was designed to capture the social impacts of the food processing and
manufacturing industry, several of the items in the industry/organisational impact

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Quantifying the Social Dimension of Triple Bottom Line

category are designed to capture the unique environmental impacts of this industry.
Other organisations may wish to substitute or tailor those questions to assess their own
industry-specific impacts. Note that we have purposely excluded organisational level
information regarding donations to charity or community initiatives and employee
health and wellbeing programmes, which is readily available and does not need to be
assessed in a formal survey.

6.1

Demographics

Variables include basic demographic information, such as age, gender, ethnicity,

education, marital and parental status, income, home ownership status and geographical
location.

6.2

Individual Wellbeing

Individual wellbeing is measured through the World Health Organisations (1998) 26

item Quality of Life-BREF scale. The QOL-BREF is an internationally validated
measure of quality of life which focuses on four key domains: physical (e.g., to what
extent do you feel that physical pain prevents you from doing what you need to do; how
much do you need any medical treatment to function in your daily life), psychological
(e.g., to what extent do you feel your life to be meaningful; how often do you have
negative feelings such as blue mood, despair, anxiety, depression), social relationships
(e.g., how satisfied are you with your personal relationships; how satisfied are you with
the support you get from your friends) and environment (e.g., how safe do you feel in
your daily life; how satisfied are you with your access to health services).

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Quantifying the Social Dimension of Triple Bottom Line

6.3

Community Wellbeing

Community wellbeing is measured through Onyx and Bullens (2001) 36 item social
capital scale, which has eight distinct elements or subscales as outlined in the table
below. Social capital, succinctly defined as the social connectedness of a community, is
described as a community asset repeatedly linked to social wellbeing and participation
(Putnam 2000). Onyx and Bullens (2001) social capital scale captures eight distinct
elements and has been recently utilised in America (OBrien, Burdsal & Molgaard,
2004).

INSERT TABLE 1 ABOUT HERE

6.4

Employment Experiences and Satisfaction

A total of 45 items currently measure the employment dimension. Basic work related
variables, such as industry, occupation and structure of typical work day, will be
measured by 12 questions based on Australian Bureau of Statistics (ABS) items.
Variables include industry, occupation, workforce status, normal days and time of work,
time in occupation and time in current job, number of full-time employees in
organisation, number of hours worked each week, whether they would prefer to work
same, fewer or more hours, and how much paid and unpaid overtime they typically do.

Thirteen dichotomous (yes/no) questions will assess differences in employee

experiences and the conditions, procedures and polices provided by employers. Six
questions will identify differences in union membership, work related illnesses or
injuries, claims for worker compensation, sick leave for work related problems, whether

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Quantifying the Social Dimension of Triple Bottom Line

organisation has family-friendly work culture, and whether they would chose to work in
this industry again. Seven questions focus on identifying what conditions, procedures
and polices employers provided; paid maternity leave, home-based work, flexible start
and finish times, family-friendly policies, health and safety policies and training, and in
the last 12 months, training and development for them personally and donations or
sponsorships to the local community. Job satisfaction is measured using Considine and
Callus (2002) Quality of Work Life of Australian Employees Index. This 16 item
measure assesses the quality of working life for Australians, specifically eight items
measure general job satisfaction (e.g., promotion prospects, standards of health and
safety, the amount of pressure experienced at work and work-life balance) and eight
items measure experiences at work (e.g., how interesting work is, experiences of
harassment, trust in management, comparability of pay).

Two items measure

organisational pride and commitment, specifically the extent to which employees are
willing to put in a great deal of effort, beyond that normally expected, in order to help
this organisation be successful and the extent to which they are proud to tell others they
are part of this organisation. Finally, in two open-ended questions, employees will be
asked to indicate what they like and dislike most about their job and workplace.

6.5

Organisational or Industry Impact

To measure organisational or industry perceptions and impact, a multidimensional index

that combines 57 key variables was created. First, to assess connection to the industry,
respondents indicated whether, over the last five years, they personally, a family
member or friend/acquaintance had worked in the industry. If yes, they indicate the role
(employee, farmer or service supplier). Next, they will be asked if they currently work

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for a company, and if so, to indicate the location. Perceptions of the industry will be
assessed via 38 variables, grouped in seven key categories: general knowledge and
interest (three items); general industry perceptions (five items); industry and local
economy (five items); factory and employment (five items), environment, amenity and
responsibility (five items), the community (ten items) and them personally (five items).
To assess specific environmental impacts of the industry, 12 potential impacts are listed
(e.g., noise, air quality/dust; odour, water use) and participants indicate how satisfied
they were with how the industry manages and mitigates each impact. Two questions
assess the economic impact and contribution of the industry to the community, with
participants asked to indicate the percentage of businesses in their community who were
reliant on the industry for their survival. They will also indicate whether they, or their
employer, had provided services, materials or products to the industry, and if so to
indicate the type of business, service provided, most recent contact and frequency of
business. Finally, participants will be asked to indicate the extent to which they wanted
the industry in the community and, in two open-ended questions were they were asked
to think of both the positive and negative, participants described how the industry
impacts on them personally and on their community.

6.6 Participants
As noted earlier, we believe there are a minimum of two social impact levels, internal
(i.e., employees & suppliers) and external (i.e., customers & community). Ideally, an
organisation should administer the survey at both of these levels, thereby measuring
their social impact on employees and local community residents. The external
dimension should involve a survey of local residents or consumers, ideally utilising

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random sampling techniques. If it is difficult either financially or practically to measure

their external social impact, however, organisations may chose to easily measure their
internal social impact on employees or suppliers through an online survey. The
advantage of utilising pre-existing measures is that organisations may then make
comparative judgments about the wellbeing for their workforce, comparing the average
scores of employees with the norm for their country.

6.7 Statistical Analysis Plan

As well as understanding immediately how industry employees and local community
residents score on each of the domains compared to pre-existing national and
international data, a series of factor analyses will be conducted for each of the four key
domains. The factors that explain the most variance for each key domain (individual
wellbeing, social wellbeing, employment, industry/organisational impact) will be
inserted into a new final factor analysis, which identifies the key items and domains.
This final factor is the score, with the score translated into a meaningful scale to
illustrate the organisational social impact at employee, community and other levels.
Further analyses, examining specific inter-relationships within and among domains, are
planned using data mining techniques where applicable and a range of statistical tests.

7. Applications and Implications

By providing an uncomplicated, non-technical and freely-available survey to assess
social impact, this questionnaire provides organisations with the tools needed to assess
the social impact and wellbeing of their workforce and local community. Ideally, as
indicated in Figure 1, organisations would use this survey to measure both the opinions

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of employees and non-employees to generate a full initial profile of their social impact
at a community level. Then, the wellbeing of employees and non-employees can be
explicitly compared. If that is not feasible, however, pre-existing measures have been
purposively selected so that organisations can compare how their employees score on
each dimension with the average Australian (or American). Comparisons and
judgments can be made about how employees (and communities) compare to the
average Australian in terms of demographics (age, gender, income, family and marital
status), individual wellbeing (i.e., quality of life), social capital (i.e., community
wellbeing and interconnectedness), employment experiences (i.e., satisfaction,
remuneration) and, at a broader level, perceptions of industry impact and reputation
(i.e., current perceptions of industry and contribution compared to reality). The value of
this approach, compared to current initiatives, is that it is evidence-based, facilitating
both accountability and comparability. Hence, if employees or local residents score
lower on one dimension than the national average, organisations can implement
interventions or facilitate access to appropriate services.

The value of this survey is that it facilitates the measurement and tracking of social
impacts, with the findings informing company policy and development in terms of the
social dimension. For example, the demographics category defines issues relevant to the
organisation; if home ownership rates are significantly lower amongst company
employees than the local community or national average, than the business may
prioritise the provision of interest-free loans to employees or investigate the viability of
other incentives, such as facilitating meetings with financial planners. For large
organisations, knowing that the majority of their workforce has children might

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Quantifying the Social Dimension of Triple Bottom Line

positively influence their decision to provide childcare facilities or educational

scholarships, decisions which will impact on the attraction and retention of staff and
their reputation in the community. Similarly, the individual wellbeing section, where the
WHO-QOL BREF measures psychological, physical, social and environmental
wellbeing, allows organisations to identify dimensions on which their employees may
need support. For example, if employees scored lower on the psychological wellbeing
subscale than local community residents or the national average, organisations could
facilitate the introduction of mental heath days or offer counselling services. The
impact of an organisations social actions or inactions can then be tracked and
monitored over time; after identifying areas for improvement and implementing
interventions, organisations can document the extent to which employee scores on the
psychological wellbeing measure increase.

The community wellbeing section, where eight different dimensions of social capital are
measured, allows organisations to quantify the participation and contribution of their
employees to the community. For example, organisations may find that their employees
score higher on measures of community engagement and involvement than the average
Australian or American. The fourth section, employment, systematically addresses
work satisfaction and experiences, allowing organisations to proactively identify and
address any issues. Scores on this section will allow employers to measure employee
satisfaction with their job, in terms of promotion prospects, health and safety, and worklife balance, as well as documenting daily work experiences in terms of how interesting
the work is, trust in management and experiences of harassment. Responses to the openended questions asking employees to identify the one thing they like and dislike most

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about their job and workplace will also potentially guide the development of initiatives
designed to improve the workplace and employee morale.

Finally, the fifth section, industry impact, is essentially a performance evaluation for
organisations, allowing them to measure the degree of goodwill towards them in the
community and from their own employees. Feedback from the community provides
insight and information that will help improve the image and social acceptability of the
business or industry, whilst completing the survey prompts residents to think about
impact and value of industry to their community, enhances their relationship with local
community by inviting honest feedback and allows organisations to identify and track
residents opinions about the industry. For larger organisations, in particular, the ability
to develop a database that measures, monitors and evaluates the social contribution of
their organisations will allow them to comment on their social contribution and
impact. Potentially, such findings could be used to quantify their social worth to their
country, with organisations providing social information that could potentially counter
policy changes or contribute to policy development. As the literature on developing
quantifiable indicators for the social dimension of TBL is in its infancy, this framework
and survey must be viewed as the first initial steps towards conceptualising,
operationalising and measuring the social impacts of organisations, businesses and
industry. Thus, whilst the model we are proposing may require improvement and
refinement over time, it is designed to encourage feedback, debate and discussion
regarding what aspects of social impacts can be quantified and should be measured.

8. Conclusions

22

Quantifying the Social Dimension of Triple Bottom Line

In conclusion, although TBL is an acknowledgement of organisations ripple effect

(Masden and Andriof, 1998), to date, the standard of TBL reporting is rather poor
(Chapman and Milne 2004, 246) with little agreement about how to assess the social
dimension. As the key criticisms of existing social indicators centres around issues of
validity, comparability and benchmarking, we believe that the development of objective
and comparable standards is essential if the social dimension is to be advanced and have
the same credibility as economic and environmental dimensions. We view this social
impact survey as the first crucial step towards quantifying the social dimension of TBL,
allowing organisations to quantify, assess and evaluate the social impact they have on
employees and communities. Importantly, with organisations currently struggling to
understand, define and measure their social impact (Suggett and Goodsir 2002), we
hope that the development of a standard, objective and valid measure of an
organisations social impact will prompt informed debate and discussion over whether,
how, why and what social impacts should be quantified. The aim of this framework and
survey is to remove the vagueness and ambiguity surrounding current organisational
social impact reporting and enable organisations to identify, quantify, compare and
improve their social impact. Improving the transparency, consistency and comparability
of TBL reporting, particularly in terms of developing a widely accepted measure for the
social dimension, is this millenniums challenge. And, as the man who first coined the
term TBL, argued: to refuse the challenge implied by the triple bottom line is to risk
extinctionTo accept the challenge is to embark on a process which is likely to be both
intensely taxing and, potentially, highly rewarding (Elkington 1998, p2).

23

Quantifying the Social Dimension of Triple Bottom Line

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Quantifying the Social Dimension of Triple Bottom Line

Research Aim
Identify the social impact and value of an organisation

EMPLOYEES

External
Comparisons

Internal
Benchmarking

COMMUNITY

OUTCOME

APPLICATION

A: Demographics
(age, gender, family,
income)

Demographic Profile
of Employees &
Community
Residents

1.
2.
3.

Typology of employees & residents

Comparison with average Australian
Establish benchmarks for longitudinal
tracking, change, impact & comparisons

B: Individual
Wellbeing
(Quality of Life)

Physical, Social,
Psychological &
Environmental
Wellbeing

1.
2.

Wellbeing of employees & residents

Methodology allows comparative judgments
regarding wellbeing of industry employees &
communities vs. non-industry

C: Community
Wellbeing
(Social Capital)

Profile of social
capital or
community wellbeing

1.
2.

Compare social capital of communities

Ability to demonstrate social value of
organisation & basis for policy direction

D. Employment
(Experience &
Satisfaction)

Experiences of
Employees vs.
Non-Industry Peers

1.
2.
3.

Internal benchmarking
Establishes baseline for comparisons
Traditional TBL reporting, ability to
proactively make & track changes

E. Industry Impact
(Perceptions &
Opinions)

How employees &

residents perceive
organisation

1.

Identify perceived social impact & value of

organisation (employees & residents)
Ability quantify social value of industry to
community; leader in social TBL, PR value

2.

The social dimension of TBL

Figure 1: A Generic and Quantifiable Model for the Social Dimension of TBL

28

Quantifying the Social Dimension of Triple Bottom Line

Table 1: Eight Social Capital Factors and example indicative question

Eight Social Capital Factors

Indicative Question

Participation in Local Community

Do you help out a local group as a volunteer?

Proactivity in a Social Context

Do you go outside your local community to visit your family?

Tolerance of Diversity

Do you think that multiculturalism makes life in your area better?

Value of Life

Do you feel valued by society?

Feelings of Trust & Safety

Do you agree that most people can be trusted?

Neighbourhood Connections

Have you visited a neighbour in the past week?

Family & Friends

Can you get help from friends when you need it?

Work Connections

Are your workmates also your friends?

29