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Companies invest billions in social programs but impact is uncertain.
Monday, 2nd June 2014
Source : KPMG International

Together 100 of the world’s largest companies reported social investments valued at over US$12.2 billion in 2013, according to new research published today by KPMG International1. Yet few companies are reporting the impact these investments are actually having on the people they are intended to help.

These findings are contained in Unlocking the value of social investment, the latest edition of KPMG’s Sustainable Insight research series published on 21 May 2014.

The KPMG study reviewed corporate reports issued between 2012 and 2013 by the 10 largest global companies in each of 10 industry sectors. It found these 100 companies and their associated corporate foundations invested, on average, the equivalent of 2.5 percent of their pre-tax profits in programs to tackle social and environmental challenges such as access to education, healthcare and disaster relief.

However, only 20 percent of these companies reported any quantified metrics for the impact of the programs they fund and only 32 percent of companies reported a detailed investment strategy.

“Companies are investing huge amounts into social programs,” said Neil Morris, Partner, Climate Change and Sustainability of KPMG in South Africa, who led the KPMG study. “The US$12.2 billion invested by these 100 companies alone is equal to the entire annual foreign development aid budget of a country like France.2

"Measuring the impact of these investments on the ground can be challenging, but it is crucial to understand how effective these programs are, how they can be improved and where the money is best spent to deliver the biggest benefits. A clear strategy for social investment is essential to this process. ”

Unlocking the value of social investment is intended to help corporate responsibility managers and others involved in designing and delivering social investments to overcome some of the challenges to measuring and reporting on social programs.

It contains practical advice, case studies and a framework for better measurement and reporting of social investments and programs.

1 Based on 69 of the 100 companies researched that reported their total social investment. These companies report the total value of social investment, such as cash donations, the value of employee volunteering time and donated products and charity sponsorship. This figure should not be taken as absolute as companies use disparate methods to value in-kind contributions.

2 According to OECD data development aid from France in 2012 totalled US$ 12 billion.

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