A new paper published today aims to help employee owned businesses (EOBs) of all sizes and sectors unlock how to measure the social and environmental impact of sharing ownership.

How to measure the social and environmental impact of employee ownership‘ tries to address an important gap: the need for a commonly agreed approach to attributing non-financial impact to a company’s ownership model.

Sponsored by employee owned chemical manufacturer Scott Bader, this paper offers a credible impact model for EOBs and starts to shows how that impact could be measured (including mapping likely impacts against relevant United Nations Sustainability Development Goals).

The paper acknowledges that there is more work to be done but aims to offer a viable starting point for the sector. This work will be picked up in the EO Knowledge Programme where the approach will be developed further and tested on a number of EOBs of different sizes, sectors and ownership models.

The ambition of the Knowledge Programme is to create a free-to-use approach that will be shared with the sector and can be easily picked up by any EOB wherever they are on their journey towards social and environmental impact management.

It is critical to the sector that EOBs are able to show economic, social and environmental impact for a number of reasons, including:

  • National, regional and local policy-makers are more likely to support the model if we can demonstrate social and environmental impact
  • EO business leaders will be better able to gather stronger data showcasing the benefits that EO delivers for their employee owners
  • If the data is strong enough there may be opportunity to attract new ESG (environmental, social, governance) focused investment capital into EOBs
  • The sector will be well-placed to take the case to procurement leads in large private firms and public sector organisations that they should value the ‘built-in’ impacts generated by EO businesses and do more to include them in supply chains.