Towards non-financial reporting as impact assessment and generation practice: an interpretative framework

Enrico Bellazzecca (Politecnico di Milano)
Irene Bengo (Politecnico di Milano)
Leonardo Boni (Politecnico di Milano)
Veronica Chiodo (Politecnico di Milano)
Gabriele Guzzetti (Politecnico di Milano)


All organizations are considered as potential assets to promoting a fair distribution of peace, wellbeing and prosperity worldwide (United Nations Global Compact, 2015). This makes them accountable to an increasing number of typologies of stakeholders, who seek evidence for whether, how and for whom organizational activities can generate positive change (Boons and Lüdeke-Freund, 2013). For this reason, non-financial reporting (NFR hereafter) has penetrated the world of business (Di Vaio and Varriale, 2020), and progressively required organizations to conduct social impact assessment (SIA hereafter) of their solutions to societal issues.
Validated SIA models have grown exponentially in the last decade. These models aim to support several types of organizations (e.g. public, for profit, not-for-profit and hybrid organizations) with homogenous NFR, while providing guidance on proxies and, in places, on measurement designs to account for the social impacts generated (Grieco et al., 2015). Although a vast literature exploring how SIA models adopted by different types of organizations for NFR purposes align with and respond to different stakeholders’ expectations (Aledo-Tur and Domínguez-Gómez, 2017), little theory building work exists that examines the degrees of organizations’ strategic directedness towards (and potential for) social impact generation that specific SIA models legitimize and promote.
This paper aims to fill this gap by exploring, through a theory-building approach, the content of a sample of peer-reviewed (n=83) and grey literature (n=27) papers documenting empirical NFR informed by validated SIA models (n=99). We identified this literature by interrogating, systematically, two relevant bibliographic databases (Scopus and Google Scholar) through a set of keywords informed by relevant impact measurement literature. We analyzed the content of this literature through first-, second- and third-level inductive coding (Saldana, 2015). These codes supported a bottom-up identification of three clusters of SIA models guiding different organizations’ NFR practice and triggering different degrees of social impact generation. We abductively interpreted these clusters through legitimacy theory (Suchman, 1995) and developed three theoretical propositions that account for different degrees of organizations’ directness towards social impact generation based on specific SIA methodologies choices.
A first cluster, Proving Sustainability, includes SIA models that support NFR practices which intend to pursue a pragmatic and self-directed interest in social impact generation. More precisely, these SIA models allow organizations to seek categorical recognition as responsible entities through only external audiences, and through limited strategic engagement and resource investments in terms of social impact generation. Through these SIA models, social impact corresponds to output figures disclosed ex-post. A second cluster, Aligning with Societal Grand Challenges, includes NFR guided through SIA models that support organizations’ ex-ante identification of social and environmental objectives. Through these SIA models, organizations can pursue a moral directedness towards impact generation by means of constant monitoring and internal and external communication of the social appropriateness of their activities and strategic engagement with the agreed impact objectives. A third and final cluster, Generating Impact, includes NFR practices guided through SIA models that fully embed social impact measurement infrastructures within organizations’ strategy. These SIA models promote a cognitive directedness of organizations towards social impact generation by supporting integration between ex-ante and ex-post pathways of impact measurement and reporting. Through such SIA models, organizations actively engage with impact goals and targets and learn and adjust their impact strategy accordingly. The implications of our findings for practitioners and wider stakeholders are discussed.

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