A clear definition of corporate social sustainability — the ‘S’ in ESG — remains elusive. To address this challenge, Ford partnered with the University of Michigan’s Erb Institute to define social sustainability and identify metrics to track improvements.
Defining Corporate Social Sustainability
A clear definition of corporate social sustainability — the ‘S’ in ESG — remains elusive. Many companies engaged in sustainability have clear metrics regarding environmental sustainability, but less so social sustainability. While social impact frameworks and metrics are increasing, there is not yet an aligned definition or metrics for measuring it.
This is a challenge that the Ford Motor Company is experiencing firsthand. According to Mary Wroten, Ford’s Associate Director of Sustainability, “Ford believes that the freedom of movement drives human progress, but we are often asked: ‘What is human progress and how is it measured?’ This project is an opportunity to answer these questions in a way that can benefit not just Ford, but all companies struggling with this question.”
To address this challenge, Ford partnered with the Erb Institute for Global Sustainable Enterprise at the University of Michigan to define social sustainability (or what Ford refers to as “human progress”) and identify metrics to track improvements. Through this two-year study, we developed a Model of Human Progress at Ford for reporting on social impact, informing social sustainability-related decision-making, and guiding the development of future social strategies. The Model was designed to be sector agnostic so that it could be used across all sectors to strengthen the comparability of social performance data between companies. We shared our findings recently at the Sustainable Brands™ 2020 Corporate Member Meeting. Below is a summary of our Model, its associated metrics, and the key takeaways from our SB workshop in September.
Ford’s Model of Human Progress
Figure 1. Ford’s Model of Human Progress
The next frontiers in corporate responsibility
Hear more from Erb Institute's Elizabeth Doty and Terry Nelidov on corporate political responsibility and measuring social impacts at SB'21 San Diego — Oct. 18-21.
Research revealed that Ford enhances the social dimension of human progress through four core ways (or “ends”): preserving human rights, protecting human health, safety, and wellbeing; increasing access to mobility (which represents the “social good” that the company’s products and services provide), and enhancing economic prosperity in the community. These four “ends” represent the foundation of Ford’s Model of Human Progress, which we visualized as a wheel given the mobility context.
These “ends” are also applicable at other companies and within other sectors (with minor changes, as shown in Table 1). Within this Model, our data revealed that the twin concepts of stakeholder trust (in the company) and innovation (in products and processes, which continually improves functions and quality) were key enablers of social impact and human progress. Without trust and innovation, stakeholders will not choose to engage with Ford, and thus fail to realize the human progress benefits that this may incur.
To help Ford track progress on these four core impact areas, we then identified appropriate metrics to measure the “means.” We also cross-checked the model across various leading impact-measurement frameworks in use today to ensure alignment with current reporting expectations. We look forward to detailing our findings in an upcoming whitepaper, to be jointly published by the Erb Institute and Ford.
Table 1. Summary of the recommended and aspirational metrics identified for the means-level priority impact areas.
Key takeaways from SB Corporate Member Meeting Workshop
As part of our efforts to validate this Model and to determine the applicability of its metrics across companies and sectors, last month we led a virtual workshop with Sustainable Brands’ Corporate Members. Workshop participants were divided into a series of breakout groups, according to their companies’ sectors. Each group was asked to consider how the different social impact areas within the Model are achieved within their companies, and whether the metrics we identified would be appropriate for them to use.
At a top level, many participants expressed their frustration with the lack of comparability in defining and measuring social sustainability. Others described the challenge of capturing the multi-dimensional and largely qualitative nature of social impact in a single quantitative metric, including how the model might be too broad and how it could directly demonstrate social impact compared to business impact.
Based on the feedback from the workshop discussions, many of the impact areas of the Model (and their associated metrics) appeared to be sector-agnostic. One area that appeared to be the most sector-dependent was the “increase access to social good,” and several groups focused their discussion on identifying the nature of this good in their companies’ own unique contexts.
In addition to this, other groups also found that a single sustainability program may in fact drive human progress across all areas of the Model simultaneously; and would need to be tracked using multiple social impact metrics from Table 1, each capturing a different dimension of impact.
Overall, these discussions generated extensive insight into how the Model and its metrics may be applied within different companies and sectors, and some of the modifications needed to do so. More work is underway to integrate this information into the study team’s wider validation process, and we look forward to sharing our final results with you in the future.