Позитивные изменения. Том 4, №1 (2024). Positive changes. Volume 4, Issue 1 (2024)

Natalia Gladkikh, a leading expert of the Institute of Socio-Economic Design at the National Research University Higher School of Economics and Editor-in-Chief of the Positive Changes Journal, considers the discussion that has arisen regarding the domestic reporting standard under development to be very valuable, as it gives an opportunity for representatives of different parties to express their opinions. The word ‘Standard’ in the document title indicates the presence of a set of important principles in its content, which are essential for everyone to follow and rely on. Therefore, the expert would like the final document to be one that not only helps companies and their stakeholders understand their performance results but also sets certain standards and recommendations on how to do this most effectively and successfully.

“Several important points are noteworthy in the current version of the standard, which is still a work in progress. The first is the obvious gap in the narrative rhetoric in the document in the part where it describes why the standard is needed, what it offers, what it includes, etc., and in what specific actions and indicators are ultimately proposed,” says Natalia Gladkikh.

Thus, according to her, the first part actively uses terminology from the field of impact assessment, for example:

“Information related to sustainable development is understood as information about the impacts, risks, and opportunities of the organization associated with sustainable development”;

“The usefulness of information related to sustainable development increases if the information is comparable, verifiable, timely, and understandable, and also sufficient to reflect the significant impact on the economy, environment, and social sphere and to give interested parties the opportunity to assess the organization’s performance (the principle of completeness) for the reporting period.”

“However, within the block of indicators, there is nothing that could be attributed to social impact. Indicators are principally defined by various metrics of activity — such as the number of employees involved and the amount of funds expended. The actual impact of these activities remains conspicuously absent from this list,” the expert remarks.

A second significant flaw she notes is the underlying logic of describing and assessing results, the principle of ‘the more spent, the better’.” According to the standard’s logic, a company’s substantial investments in social objectives imply it is doing well, yet there is no comment on the actual effectiveness of these investments. The specific changes that have occurred in the region or country as a result of such expenditures are not considered relevant. If a more economical solution is identified, the current logic of the standard would interpret this as the company’s deteriorating position relative to others.

“The traditional rationale for social investment, demanding an essential evaluation of the achieved results rather than just a description of actions taken or expenses incurred, is strikingly missing from the current version of the standard. This component, in my view, is crucial,” states the expert. — “Until we pose questions not only about the volume of funds spent but also the tangible outcomes of such expenditures, we cannot truly speak of results in the terms of social impact, as is claimed in the intent of the standard.”

The realm of social project design is evolving, just like any branch of science or practice, and the methodologies of project development and reporting are increasingly complex. This is evident in the practices of the Presidential Grants Fund, where updates and the incorporation of new elements and focuses in application formats are routinely implemented. For instance, in the current iteration of the application, it is crucial not only to describe the project concept but also to validate its pertinence with references to pertinent sources. The document places emphasis on the evidential substantiation of the proposed approach to addressing the issue. Several grant-giving organizations are shifting toward applications based on the so-called theory of change, which mandates the clear definition not only of the problems and their origins but also a detailed description of each activity to be undertaken in relation to the three-tiered framework of immediate results, social effects, and societal impact. The theory of change also figures into the planning strategies of state bodies when conceptualizing strategic projects.[29]