Pity the poor executive who is tasked with enabling a company to understand its contribution to development. A quick review of the landscape shows an array of approaches, with little discussion of their usefulness for different purposes.
We broadly define two purposes for companies to track their social impact (1) to prove or demonstrate their impact to other stakeholders (communities, governments, investors), and (2) to improve their contribution by pinpointing areas for action with high potential impact.
We broadly categories approaches companies can use into four – with plenty of caveats about the limits of generalisations, they are compared in this presentation, prepared for a meeting co-hosted by the Business Innovation Facility on "Understanding and enhancing business impact on development", on 12th July 2012 in London.
A more detailed explanation of these four approaches is covered in a 2009 paper "Approaches to Assessing Business Impacts on Development.pdf" and an updated overview of the four main approaches to assessment of impact by companies (summarising its strengths and constraints) has been published as a BIF spotlight.