Restore the Earth Foundation and EcoMetrics, LLC

Social Return on Investment

Restore the Earth contracted with The Water Institute of the Gulf to research and complete a Social Return on Investment (SROI) report as means of assessing and valuing the intangible aspects of restoration efforts on a variety of stakeholders impacted by this project.

The Challenge

The Water Institute team has completed multiple SROIs and each have undergone rigorous third-party review and been accredited through Social Value International, an international organization which reviews and confirms that procedures in the report used to identify a Social Return on Investment meets rigorous standards. These projects include examination of the economic, social, and environmental outcomes generated by the Bancroft Station regenerative energy project constructed by the Silicon Ranch Corporation in Blakely, Georgia. This 3,500 panel solar farm was fully integrated with an active agricultural farm, allowing the site to remain in agricultural production, resulting in a number of unique outcomes. The SROI analysis found that with an initial investment of $162,979,202 in financial capital, the community and funding stakeholders will see a return of $346,715,828 in financial, manufactured, human, social, and natural capital over the next 40 years.

Other recent SROI examples include a forecast assessment of the social value expected to be generated by a 4,000 acre cypress reforestation project in the Pointe-aux-Chenes Wildlife Management Area over the next 40 years and an evaluative assessment of a 2005 reforestation of 1,943 acres of bottomland hardwood forest planted through investments by Entergy Corporation in the Tensas National Wildlife Refuge (NWR).

The Approach

Research methodologies were informed by two goals: 1) collecting data to fulfill the requirements of social return on investment report assurance by Social Value International; and 2) populating Restore the Earth EcoMetrics™ Model, a tool developed by Restore the Earth to collaboratively analyze the social, economic, and environmental benefits of investing in reforestation efforts.

The model combines quantitative and qualitative values across numerous social, economic, and environmental categories to forecast the relative social and economic outcomes for corporations interested in investing in reforestation projects. The EcoMetrics model was built on the guiding principles of Social Value International’s (SVI) SROI Methodology and the International Integrated Reporting Council’s (IIRC) International Integrated Reporting Framework (IIRF).

The SVI approach concerns an in-depth, evidence-based understanding of change for a full range of community stakeholders with recognition of both positive and negative changes as well as intended and unintended outcomes.

Value in this context refers to the relative importance placed by a stakeholder group on one potential outcome over another. Assigning these valuations using SVI principles requires the use of financial proxies, as many of the identified outcomes are difficult to quantify using conventional accounting practices. The IIRC methodology is principally concerned with value creation for funding stakeholders and resources are allocated based on the potential benefit to the corporation and quantified using conventional accounting practices.