Why You Should Put a Price on Your Company’s Social Impact

Ansula Chowdhury’s firm helps businesses mitigate risks and show their value

Written by As told to Kristene Quan

Anshula Chowdhury founded Social Asset Measurements in 2011, at the age of 23. The company helps firms track their social costs as easily as their financial ones. Social Asset Measurements currently has booked revenues of about $1 million, and Chowdhury is planning to undertake a seed financing round in September.

Photo: Nikki Ormerod

We use a methodology called “social return on investment,” which has been used pretty broadly. Essentially, it allows you to figure out what the dollar value of a social or environmental impact would be. So if a company hires somebody, that spending is obviously reflected on its balance sheet. But how do you reflect in your records how that decision will also indirectly boost a government’s income tax revenue? Or decrease the use of emergency medical care services, which happens when people are actually healthy and have any kind of economic well-being.

“We measure everything that’s not part of the cash flow, balance sheet or income statement but is still considered material to an organization. Take mining as an example. There are a lot of non-financial factors that affect their work. If they’re not managing environmental resources or social issues in a responsible way, it can actually lead them to lose shareholder value.  It’s not like the financial health of an organization can be found only on their balance sheet. A lot of companies get blindsided by these risks and don’t have a way of demonstrating the value they are creating.”

This article is from the PROFIT section of the March 2015 issue of Canadian BusinessSubscribe now!


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Originally appeared on PROFITguide.com

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