More than 3,000 corporations currently engage in some form of public sustainability reporting, but for many the term sustainability begins and ends with the environment, says the Interfaith Center for Corporate Responsibility. Now the 40-year-old coalition, whose members collectively manage more than $100 billion in assets, is trying to get companies, NGOs and investors to better recognize and understand the social side of sustainability.

ICCR, the muscle behind many of the nation's shareholder resolutions and corporate dialogues, recently published an 84-page Social Sustainability Resource Guide (SSRG) that aims to integrate social sustainability into business operations.

"Just because we can't quantify precisely [the impact of social sustainability efforts on a company's bottom line] doesn't mean it doesn't have value," says Adam Kanzer, managing director and general counsel of Domini Social Investments and a co-author of the SSRG. "Such efforts can reduce legal risk, reputational risk and operational risk."  

A University of Zurich study of human rights abuse and corporate stock performance found that U.S. and U.K. companies experienced significant abnormal negative returns when human rights abuses become publicly known. The 2009 study looked at cases from 1983 to 2008.

How and why companies should engage with the communities in which they do business is the focus of the SSRG, authored by ICCR and corporate social responsibility leaders from around the world. The guide also provides guidance on how to measure whether or not programs and initiatives are having their intended impact. Included are case studies featuring successful multi-stakeholder collaborations.

For example, factory workers at a Hewlett-Packard Co. supplier in southern China who underwent HP-sponsored labor rights and communication training said they'd be more likely to work towards a resolution after a dispute instead of immediately resigning.

"It's really important to have all stakeholders share their voice at the table," says Nadira Narine, ICCR's program director of strategic initiatives. This includes companies, international and local NGOs, governments and the community members themselves. "The guide is a great way to start discussions. From an introductory perspective, I think it's really leading edge," says Dan Bena, PepsiCo's senior director of Sustainable Development.

PepsiCo's WaterHope partnership with the Wholistic Transformation Resource Center (WTRC), a Philippine humanitarian and development organization, is discussed in the guide. In 2007, WaterHope started building water stations in the Philippines that now bring accessible, affordable and safe drinking water to people in poor communities.  At the end of five years, the stations will be owned by local entrepreneurs and the communities. They're also used as hubs for health, education, sanitation, hygiene, and nutrition programs.

Investors should be aware that partnering with communities is generally more successful than just providing charity. Oxfam America, the international relief and development organization, explains it this way in the SSRG:

Give a hungry woman a fish and she'll be hungry again once you're gone. Teach her to fish and she may be able to feed her family and teach others. But unless you get to the root of why she lacked the skill to begin with--perhaps fishing is considered men's work in her village or the taxes for commercial fishing are very high--she may not be able to become self-sufficient.

Kanzer from Domini also emphasizes the need to get to root causes of problems in communities. "You can't continue to slap band aids on these things," he says. He hopes the guide will help readers acquire a more nuanced understanding of how to address poverty and systemic social problems.

He encourages investors to be persistent and patient. Domini dialogued for three years with steel producer Nucor before the company agreed to adequately address its exposure to slavery in its Brazilian supply chain.

It also pays to be resourceful. "Sometimes there are already community based solutions on the ground so you don't need to reinvent the wheel," says Kanzer, adding that Domini worked closely with two successful local NGOs during its Nucor engagement.

Bena from Pepsi has seen a big increase in the collaborative approach between companies, NGOs and governments to tackle social issues and initiate change. "The appetite for public-private relationships is voracious," he says. "This wasn't the case five years ago."

Although measuring social impacts is still in its infancy, ICCR notes that progress is being made. Pepsi's WaterHope project, which adapted a model created by the London Benchmarking Group, looks at water station profit and loss margins, average weekly profits of station dealers, clinic data on water borne diseases, preschool feedback on children's sick days, water quality, and other measures.

After Merck launched a rotavirus vaccination program for children in Nicaragua, it established rotavirus surveillance at ten hospitals across the country to determine the number of rotavirus infections requiring hospitalization. The SSRG provides more details.

Investors should realize that social sustainability for communities is not a quick fix. Bena emphasizes the need to abandon "short-termism" on social ROI projects--a phenomenon Oxfam refers to as Organizational Attention Deficit Disorder.

ICCR says it encourages more companies to share case studies and invites suggestions for strengthening the SSRG framework. The guide can be viewed at www.iccr.org.