Measuring CSR performance and impact

To ensure that an initiative is sustainable and successful, it is useful to evaluate the results of its activities. This makes it possible to communicate its successes clearly, and thus to satisfy stakeholder expectations. Within the company, an evaluation of a project’s effects can facilitate decisions about continuing, expanding or modifying its activities.

When carrying out evaluations, it is important to realize that it is only rarely possible to quantify the precise effects of CSR projects. However, even a qualitative assessment or measurement of partial results can have external effects and provide a basis for decision making.

The immediate goals of the project can be defined in a plan drawn up before the launch of the project. The appropriate measures depend on the project’s activities: If the project is intended to improve elementary education, for example, milestones and measures might include the number of schools built, the number of qualified teachers or the number of students who successfully complete six years of schooling.

However, it is difficult to determine with certainty whether certain indirect positive effects on society and the local environment can be attributed to the CSR initiative. Improved schooling leads to better opportunities in the labor market, and over the long term this will reduce the poverty rate and increase productivity. But since such positive outcomes depend on a number of factors, it is impossible to identify a direct causal link to improved elementary education.

It is mainly in the areas of human resources and production that the effects of CSR projects can be quantified. If the use of efficient technologies makes it possible to reduce energy consumption by 30 percent, then ongoing energy costs will be 30 percent lower. If improved preventive healthcare and inoculations reduce employee illness, this will save personnel costs.

In contrast, it is difficult to measure an enhanced reputation or increased employee motivation. However, with a consistent CSR strategy, it becomes increasing easy to notice these changes within the company