This site is part of an ongoing collaboration between AccountAbility and Business for Social Responsibility in association with Brody Weiser Burns. (For description of these organizations please check out Partnering Organizations.) The collaboration, funded by The Ford Foundation, was created in 2002 to explore the basis on which leading companies measure, manage and report on their economic impacts in relation to poor and disadvantaged communities. This innovative project is designed to enhance the profile and ability of companies to manage and demonstrably improve economic development activities by assessing what motivates and shapes their approach.
The intention of this report is to increase understanding of:
- How leadership companies are managing their economic development effects on poor and disadvantaged communities, domestically or internationally
- The place of economic development in social and sustainability reporting, and more broadly in emerging corporate responsibility standards
- The public policy implications for companies, governments, and other stakeholders
- How management frameworks might better support economic development performance
Financial vs Economic Performance
The starting premise here is that the traditional notion that financial performance equates to economic performance is an inaccurate assumption in practice that hinders development. The financial concerns the market valuation of transactions that pass through a company’'s financial accounts (e.g. remuneration to factory workers). The economic, however, extends beyond the boundaries of the single organization and takes into account socio-economic activities in, and ultimately outcomes for, stakeholders at large (eg a 'living wage' for factory workers in poor communities; sourcing from local suppliers).
The research methodology was as follows:
- We created an overall framework of economic impacts aligned with business activities.
- We analyzed contemporary corporate responsibility standards to determine the extent to which they address the economic development of poor and disadvantaged communities.
- We assessed sixty-eight social and sustainability reports on their coverage of their economic development performance to ascertain how they are currently reporting the measurement and management of their impacts.
- We held three workshops in the U.K. and the U.S.A. with company representatives and advocacy groups to share learning, give feedback on the preliminary findings, and plan future work.
- We used e-mail and telephone surveys to support findings from the three workshops.
- We held seven company interviews, which provided practical in-depth case studies from different sectors and regions of operation around the world.
- We carried out a literature review to assess related academic research and applied studies.