7 dimensions that define a high impact social business

The Social Business Scorecard is a self-assessment tool created to help social businesses achieve their social mission. SBS was developed by CERISE and a working group comprised of organizations looking to define what it means to be a social business.

Over the course of 3 years of iterative and collaborative discussions, the group decided on 7 key dimension that are considered key for driving an impactful and efficient social business.

  • Purpose – A social business has a purpose, or social mission, that is to provide a solution to a social and/or environmental problem. For example, the social purpose may be to reduce poverty and inequality; increase access to basic goods and services; strengthen high social-impact value chains; create jobs; reach out to marginalized populations or protect the environment. This dimension assesses the extent to which the business’s social goals are defined, measured and analyzed. Key points analyzed: social goals; statutes and governance; stakeholder involvement in decision-making; sustainability and replicability; scope; scalability.
  • Public – A social business may define its target market at the level of demand (clients) or supply (the employees themselves, or other actors in the value chain). The target market is characterized by poverty, vulnerability, exclusion, or inequality. This dimensions assesses BoP concepts; exclusion; vulnerability; creditworthiness; cross-subsidization; projections 
  • Product – The product or service of a social business must contribute to reducing or least mitigate the inequality identified in the project concept. It is based on an innovative solution to meet unserved needs. It may provide access to basic services: food, health, education, drinking water, energy, communication. It may address environmental issues. Prices take into account the weak purchasing power of clients; client satisfaction is regularly monitored. This dimension assesses type of products (basic goods/ environment); level of innovation and relevance to the problem being addressed; client satisfaction; price. 
  • HR Policies – A social business has exemplary HR practices. It ensures its employees and service providers can earn a decent living from their work. The working environment is safe, nurturing and allows for professional growth. Employees are considered an asset, not a cost. This dimension assesses social responsibility vis-à-vis employees and providers, work conditions
  • Ethical Principles – A social business adheres to ethical principles regarding the environment, social responsibility and transparency that respect local laws and encourage high standards. The principles should be clear and upheld by all stakeholders. They should guide business practices, and not just serve as a basis for public relations, communication or branding. This dimension assessess social responsibility vis-à-vis consumers, employees and the environment; transparency in operations and fiscal obligations tax system.
  • Profits – A social business is sustainable. It’s business model is robust and adapted to its social goals. It has a dividend policy and dividend distributions do not undermine the business’s social goals. This dimension assess sustainability of the business model, hybrid resources, definition of profits, transparency in profit allocation.
  • Partnerships – Sometimes, a social business is created with “key partners” that have a structuring effect on the business. A key partner may be essential to operations (procurement, distribution or purchase), may have historical ties with the business, or may be particularly visible in the business’s communications. The partner(s) brings technical expertise and/or capital. This dimensions analyzes these partnership based on expertise provided; continuity and scope of the partnership; transparency regarding communication and business relationships between partners; mission alignment and shared values.

Learn more about CERISE-SBS and SBS Light, the version created for investor due diligence of social businesses!