I’ve been working on a social return on investment analysis for a carbon storage programme in Indonesia, when I came across a relatively new concept in valuing social impact.
The project currently uses the Climate Community Biodiversity (CCB) Standards and has structured its outcomes accordingly, which has been very useful for identifying value as an increasing amount of research is being done in this area.
Along the way however I came across the Capitals: Natural Capital, Human Capital, Social Capital and Produced (or Built) Capital
The idea is that it is the interaction between these different kinds of capital that result in human wellbeing and in the case of Natural Capital, it is ecosystem services that contribute towards that wellbeing. In lay terms: it is a reminder that we are all a part of nature and that how we treat the natural world (and each other) has an impact on our own wellbeing.
What the Capitals Coalition is calling for is a new approach to accounting, so that we can properly value these different types of capital – which will have an impact on the valuations of companies, policies, procurement, etc.
Some radicals might suggest that this is simply tinkering with an already broken system. I say evolution produces more sustainable change than revolution does. I am excited about this direction of travel and can see many applications across philanthropy, social investment, impact investment and policy where this approach will be of benefit! Excited to watch this space.