Different activities create distinct values for the society, notably monetary values that we are familiar with. However, there is a need to “include the values of people that are often excluded from markers in the same terms as used in markets”. That is where Social Return on Investment (SROI) comes into play.
What is Social Return on Investment (SROI)?
SROI is a framework for measuring and accounting in a broader angle. It seeks to reduce inequality and environmental degradation and improve well-being by incorporating social, environmental and economic costs and benefits, in accordance with the SROI network.
Taking the new proposed third runway of HK airport as an example, the decision makers (i.e. the government together with Hong Kong Airport Authority) will consider the cost of the infrastructure, including land cost, labor cost, equipment cost, as well as economic benefits such as monetary income or job opportunities brought by the new runway during the planning stage of development of the project. In other words, the authorities will conduct cost-benefit analysis of the third runway.
For social costs other than those required by the statutory Environmental Impact Assessment (EIA) process or other law requirements, the authorities technically may not need to consider them (e.g. extra carbon emissions brought by the third runway).
That is exactly why different stakeholders including green groups have been urging the airport authorities to assess the impact of the additional carbon emissions from the third runway. In response, the Airport Authority announced on 19, September 2012 that it will assess future carbon emissions and evaluate the social and environmental impacts of the third runway project.
WGO will conduct Social Return of Investment (SROI) projects to show the public a comprehensive picture about the true costs of different infrastructures.
How Social Return on Investment (SROI) helps?
As a newly developed paradigm adjusted from social accounting and traditional cost-benefit analysis, the concept of SROI, via monetized language and qualitative narratives, advocates a holistic approach in appraising wider social returns of an action that do not possess any market value and often taken-for-granted to be subordinate to economic benefits derived, by putting financial ‘proxy’ values on some seemingly intangible impacts.
With SROI, the public of Hong Kong can better understand the estimated direct costs and the social and environmental costs of proposed projects. In other words, SROI can provide the society with a basis for further discussion, especially how to minimize the negative environmental impacts and maximize economic benefits.
WGO supports the idea of adopting SROI to help the society to assess the true costs of new infrastructures. As a think-tank and a solution-provider, WGO will conduct the following SROI projects to facilitate a new paradigm shift.
SROI project of the proposed Third Runway in Hong Kong