Two things seem to be happening at the same time: organisations are looking for ways to attach social value to their market pro-file; people are developing a more joined-up way of thinking about what they and what their investments are up to.

Two things seem to be happening at the same time: organisations are looking for ways to attach social value to their market pro-file; people are developing a more joined-up way of thinking about what they and what their investments are up to.

The result is a renewed pressure upon information — its supply, its consumption, its transparency, and perhaps most importantly, its transferability. People from either side want to know more about what is going on, and how to stitch it all together.

Traditionally the market, or more properly, the “money market”, has been able to generate decisions and manage transactions based upon the chief criteria of financial value.

Range of relevance and ease of quantification has made this a powerful tool for expressing core data in succinct figures. However, financial information frequently fails to tell the larger story, and even the larger financial impacts, of any individual investment opportunity.

The shortcomings of this become apparent when considered against the backdrop of globalisation, which has on the one hand raised concerns about global terrorism and global warming, but on the other, has increased the reach of our curiosity, and allowed us to connect distant things much faster.

Larger stories are becoming much more important, and if raw financial information is not providing them, then there is a growing gap for a newer source.

The problem with the kinds of alternative data which more socially minded organisations (i.e. organisations which have significant outcomes which are not expressed through traditional accounting) tend to produce is twofold.

Firstly, they are often lengthy and involved, which for the purposes of comparison is a major disadvantage.

Secondly, the focus is generally on unquantified outcomes (social or environmental good), which are hard to integrate with other forms of data, and thus hinder the attempt to build an “overall picture” which might replace the purely financial one.

This is frustrating for investors and organisations alike, especially considering how frequently social or environmental projects produce very real cost benefits which aren’t making their way into simple bottom lines.

Take for example a recycling scheme which provides jobs for the long-term unemployed: investment is paid back not only through the sale of recycled products but also in terms of the welfare savings made.

Of the two, only the first enters into a straight financial analysis. (Compare this example with that of Walmart in the US, which has been criticised for relying on part-time staff who are kept on state-funded Medicaid. While the company achieves significant savings, these costs do still have to be paid, not least by investors through tax on their seemingly admirable returns.)

Research into the principles of Social Return on Investment (SROI) has sought to address precisely this gap.

The 2006 Guide to SROI Analysis puts forward a methodology for converting intangible descriptions of benefits into genuine research and a credible system of monetisation — i.e. a way to assess the complete range of an organisation’s outcomes and relate them in financial terms. The immediate goal is to provide the investor with what is so crucially lacking at the moment — a way to talk about not only the direct monetary return on an investment, but its blended return.