Monetizing Social Impact: A strategic advantage for businesses

In the second of a three part series, transformative social impact leader Padma Dayananda explains how monetizing the Social component of ESG can help businesses achieve measurable outcomes - both financial and nonfinancial.

The integration of social impact into business operations is no longer a philanthropic afterthought—it is a powerful driver of competitive advantage. Businesses worldwide are recognizing the transformative potential of monetizing social impact, aligning societal contributions with core operations to achieve measurable outcomes. 

If you are a CSR leader and  hold the budget responsibilities for the same, you would have observed that year on year there is a demand for a stronger business case for investing in the “S “ rather than “E” of the ESG.  We got to remember that the leaders holding the purse strings are driven by bottom lines and revenue (so pulling at the heart strings will not work). Monetizing social impact is key for the mere survival of CSR amidst this challenging economic climate.

Governments in countries like the UK and India are leading this charge with policies that incentivize companies to prioritize social value. By aligning their strategies with these frameworks, businesses can meet regulatory mandates, strengthen community relationships, and unlock long-term business benefits.

Social Value Act in the UK: A pioneering framework

The Public Services (Social Value) Act, 2013, requires public bodies in the UK to consider the broader social, economic, and environmental benefits of their procurement decisions. Businesses vying for government contracts must demonstrate their commitment to delivering social value, which often involves initiatives like local job creation, workforce diversity, and sustainability projects.

For instance, many UK companies have pledged to create apprenticeships, upskill local workers, and reduce their carbon footprints as part of their social value commitments. These commitments need to be monitored and reported through the duration of the contract.

There are two ways to activate social value - forecast or evaluate.

Social value forecast can be done before a commitment is made or while designing the CSR program for the organisation. Considering the organisational purpose and business goals the social impact priorities are drawn out. Applying the Social Value Framework that takes in financial proxies, the return on social investment can be worked out. 

This give a strong business case for investment in CSR.

Social Value Evaluation is done through the life of the project to assess it’s validity and relevance. It gives you a yardstick to measure success of the programs and time to change direction. When you notice the RoI dipping, the program either requires a re-structure ( different beneficiaries, change in offer) or project closure. This model gives confidence to business in the efficacy of the CSR programs in pure terms of ROI that sits well within their profitability sheets.

Business benefits of monetizing social impact

1. Elevating relevance of CSR within the organisation and decision makers. Powerful tool to negotiate budgets.

2. Business aligned investing in local communities through job creation, skilling and up skilling enhances trust and goodwill, while building creating diverse talent pipeline for the organisation. This reduces the recruitment costs.

3. Businesses that align with social impact frameworks  and report with transparency are more likely to attract ESG-conscious investors, customers, and partners. Demonstrating a commitment to social value enhances brand equity and strengthens relationships with key stakeholders.

4. Translating social contributions into measurable business outcomes gains companies a competitive edge, securing government contracts and fostering long-term growth. In the UK, compliance with the Social Value Act increases a company’s chances of winning public contracts.

Conclusion

The social value frameworks in the UK underscores a global shift towards integrating social impact into business strategies. Monetizing social impact transforms societal contributions into tangible business advantages, including talent development, market access, and stakeholder trust. For forward-thinking companies, this approach represents not just a compliance requirement but a strategic opportunity to redefine success in todays competitive, economically challenging and AI led uncertain markets.

With 23 years of cross-industry expertise, Padma is a transformative social impact leader specializing in digital transformation, business development, and ESG. She excels in leveraging business and technology to propel social sustainability initiatives and build impactful ESG programs, forging strategic partnerships across corporates, public sectors, and non-profits to facilitate major global deals.

As a skilled social value practitioner, Padma transforms CSR efforts into a competitive edge, helping businesses secure substantial public sector contracts. By seamlessly aligning social impact initiatives with overarching business objectives, she guides executive leadership in embedding sustainability into core strategies, achieving equitable outcomes and driving long-term growth. You can find Padma on LinkedIn here.