Why measuring social impact has become a strategic imperative for South African business

For decades, corporate social responsibility occupied the comfortable terrain of narrative. Annual reports were populated with carefully curated stories, photographic evidence of benevolence, and broad claims of commitment to “community” and “upliftment.”  Many of us who work closely with enterprise and development ecosystems have seen this pattern repeatedly. This era of qualitative assertion is rapidly closing.  

Since the early 2010s, particularly following the consolidation of ESG standards and the adoption of the Sustainable Development Goals, and more decisively after 2020, a more demanding paradigm has emerged one that builds on earlier quantitative practices but extends far beyond them. Social impact is no longer treated as a symbolic add-on, but as a measurable, strategic, and operational concern embedded in core decision-making.

The contemporary market environment is increasingly intolerant of performative purpose. Consumers, investors, and partners are more discerning, capable of distinguishing between symbolic commitments and demonstrable outcomes. Purpose-driven narratives, once sufficient, are now discounted in the absence of evidence. Measured social impact supplies this evidence, converting abstract claims into competitive advantage.

This is particularly true within contexts marked by deep inequality and structural complexity such as South Africa where social impact can no longer be relegated to the margins of corporate strategy. It has become a determinant of institutional resilience, innovation capacity, and long-term viability. Organisations are increasingly judged not only by what they produce or profit, but by how they shape livelihoods, labour markets, and socio-economic systems.    

Organisations that do not quantify these interactions operate with a critical blind spot. They struggle to anticipate disruptions rooted in community insecurity, precarious work, and the erosion of social and economic stability. Nor are they able to assess whether their investments in social initiatives meaningfully strengthen the livelihoods, agency, and long-term economic resilience of the people and communities they engage. By contrast, impact measurement frameworks function simultaneously as a risk mitigation mechanism and a reputational asset. In moments of crisis, verifiable social data provides credibility with regulators, communities, and the public. More proactively, it enables more disciplined capital allocation, directing resources towards interventions that yield tangible social and strategic returns.

Beyond reputation, social data shapes innovation. When organisations systematically analyse the needs, constraints, and aspirations of the communities and markets they engage, they unlock insights that inform product development, service design, and new market creation. The growth of financial services for the underbanked, inclusive supplier development models, and digitally enabled access to essential services reflects this dynamic. These are not charitable endeavours, but commercially viable responses to structural gaps identified through data-driven engagement with social realities. Enterprises that internalise this logic tend to develop more resilient, scalable, and contextually relevant business models.

Social impact measurement requires moving beyond simplistic indicators toward an understanding of quality, depth, and systemic effect. In practice, this means paying attention to how enterprises shape people’s skills, economic mobility, and long-term participation in markets; how communities experience stability, access, and inclusion; how trust and cohesion are built within operating environments; and whether business activity contributes to shifting structural conditions rather than merely reproducing them.

Increasingly, organisations are expected to translate these social dynamics into credible, decision-relevant insight. This has driven a shift toward more disciplined, transparent, and people-centred approaches to understanding impact supported by improved data practices and digital tools that allow social outcomes to be tracked, tested, and integrated into strategic decision-making without becoming detached from lived realities.

South Africa presents a particularly demanding environment for social impact measurement. Fragmented data systems, community fatigue with repetitive assessments, short-term corporate planning horizons, and the rise of “social washing” undermine credibility. Addressing these challenges requires deliberate choices: the adoption of long-term indicators that track outcomes over time; partnerships with credible research, academic, and civil society institutions; and frameworks that are sensitive to starkly different urban, peri-urban, and rural realities.

When approached thoughtfully, however, these constraints also present an opportunity. Organisations that invest in contextual intelligence and methodological evidence are better positioned to navigate complexity, build durable stakeholder relationships, and contribute meaningfully to socio-economic stability.

Moreover, the future of social impact measurement lies in combining technology with smart strategy. AI and real-time data systems can transform impact tracking from a quarterly compliance checkbox into continuous strategic intelligence. The technology already exists. Companies can now monitor which interventions work in real-time, give communities direct input into measurement, and use AI to spot patterns humans might miss.

In a country like ours, this is both a challenge and an opportunity. Those who build genuine measurement capabilities and use them to guide strategy will gain critical advantages: better risk understanding, earlier opportunity identification, stronger stakeholder relationships, and contribution to the economic stability their own success depends on.

Londani Mpharalala is a Research and Impact Coordinator at 22 On Sloane.

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

BUSINESS REPORT