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Global Public Sector | Thinking people The Solution Economy Social Impact • Education Business Leverage Mission Opportunity • Employment • Environment • Health • Social Services • Transportation Global Public Sector | Thinking people Solution Economy Time 2 Gap between GDP and social gains Source: Giovannini, Enrico. GDP, Well-being, Happiness, Sustainable Development, etc. Where do we stand? 2015. Global Public Sector | Thinking people 3 Source: Stuart Crainer & Des Dearlove. 2014. Mobilising value: the Turkcell way. Global Public Sector | Thinking people 4 Social responsibility & shareholder returns Source: RBC Global Asset Management, Does Socially Responsible Investing Hurt Investment Returns? Global Public Sector | Thinking people 5 Capital markets and social responsibility Measuring ESG Environmental Emissions & climate impact Environmental reporting / disclosure Social Diversity Labour-management relations Product quality Community relations Governance Board accountability Shareholder rights Executive compensation Global Public Sector | Thinking people 66 Social impact & shareholder returns Advancing social measurement Verified performance data Benchmarking impact Performance metrics Improving standardization Reforming incentives Capacity building Can we use social metrics to enhance enterprise performance? Global Public Sector | Thinking people 7 Using social impact measurement to enhance shareholder returns Science of Shared Value Business Performance Global Public Sector | Thinking people + Social Impact Measures = Shareholder Returns 8 Quantifying business performance Enterprise value Revenue Growth Volume Volume Operating Margin Asset Efficiency Selling, General & Administrative Property, Plant & Equipment • Improve customer interaction efficiency • Improve PP&E efficiency • Improve corporate/shared services efficiency Inventory • Acquire new customers • Acquire new customers • • Retain and grow current customers Retain and grow current customers • Leverage incomegenerating assets Price Realization Cost of Goods Sold • Strengthening pricing • Improve development and production efficiency • Improve inventory efficiency Expectations Company Strengths • Improve management and governance effectiveness • Improve execution capabilities External Factors Receivables and Payables • Improve receivables and payables efficiency • Improve logistics and service provision efficiency Income Taxes • Improve income tax efficiency Global Public Sector | Thinking people 9 Quantifying social performance Social Progress Index Basic Human Needs Nutrition and Basic Medical Care • Undernourishment • Depth of food deficit • Maternal mortality rate • Stillbirth rate • Child mortality rate • Deaths from infectious diseases Water and Sanitation • Access to piped water • Rural access to improved water source • Access to improved sanitation facilities Shelter • Availability of affordable housing • Access to electricity • Quality of electricity supply • Indoor air pollution attributable deaths Personal Safety • Homicide rate • Level of violent crime • Perceived criminality • Political terror • Traffic deaths Source: Social Progress Imperative. Global Public Sector | Thinking people Foundations of Wellbeing Opportunity Access to Basic Knowledge • Adult literacy rate • Primary school enrollment • Lower secondary school enrollment • Upper secondary school enrollment • Gender parity in secondary enrollment Personal Rights • Political rights • Freedom of speech • Freedom of assembly/association • Freedom of movement • Private property rights Access to Information and Access to Information and Communications Communications • Mobile telephone subscriptions • Internet users • Mobile telephone subscriptions • Press Freedom Index • Internet users Health and Wellness • Press Freedom Index Personal Freedom and Choice • Freedom over life choices • Freedom of religion • Early marriage • Satisfied demand for contraception • Corruption • Life expectancy • Premature deaths from noncommunicable diseases • Obesity rate • Outdoor air pollution attributable deaths • Suicide rate Tolerance and Inclusion • Women treated with respect • Tolerance for immigrants • Tolerance for homosexuals • Discrimination and violence against minorities • Religious tolerance • Community safety net Ecosystem Sustainability • Greenhouse gas emissions • Water withdrawals as a percent of resources • Biodiversity and habitat Access to Advanced Education • Years of tertiary schooling • Women’s average years in school • Inequality in the attainment of education • Globally ranked universities 10 Scores below 65 Scores between 65-70 Scores above 70 Source: Social Progress Imperative, 2015. Global Public Sector | Thinking people 11 Building a network of fair and sustainable cities in Colombia SPI Inter-cities SPI Intra-Bogota Social Progress Framework used to measure and analyze the level of welfare for 10 Colombian cities from 2009 to 2014. Social Progress Framework used to measure and analyze social progress trends for 20 districts from 2009 to 2014. Global Public Sector | Thinking people 12 Integrating business & social analytics Science of Shared Value Shareholder value Revenue Growth Operating Margin Asset Efficiency Expectations + Social Progress Index Basic Human Needs Global Public Sector | Thinking people Foundations of Wellbeing Opportunity 13 Impact of SPI on Company Value | Latin America Global Public Sector | Thinking people 143 71.3 companies Average SPI 14 SPI components and price per net book value Global Public Sector | Thinking people 15 The effect of SPI on price per net book value by industry Industry Breakdown 852 71.4 companies Average SPI Legend Industries shown with a purple dot have a statistically significant relationship between SPI and P/NBV. Industries shown with a red dot have no statistically significant relationship between SPI and P/NBV. Red dots are not drawn to scale. Global Public Sector | Thinking people 16 Measuring Up! Business analytics Social analytics Shareholder Value Big Data, Big Business and Metrics that Matter Global Public Sector | Thinking people 17 Paul Macmillan Deloitte Email: [email protected] Twitter: @Paul_Macmillan Global Public Sector | Thinking people 18 Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. 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