Social Impact Assessment and Social Impact Assessors (Part 3 of 5)
This part examines the Social Impact Assessment (Audit) Standards (SAS) developed by the Institute of Chartered Accountants of India (ICAI). It details the 16 thematic areas of social intervention, the mandatory nature of compliance, and the overarching objectives and scope of the SAS Framework.
5.4 Overview of Social Impact Assessment (Audit) Standards
Social Impact Assessment Standards are a formal set of guidelines and criteria designed for social enterprises to assess and report their social and environmental performance. These standards are critical for ensuring transparency, accountability, and ethical practices within the non-profit and social enterprise sectors.
- Credibility and Trust: Adhering to these standards helps organizations demonstrate a genuine commitment to responsible practices, thereby enhancing their credibility and fostering trust among stakeholders.
- Systematic Improvement: The standards empower entities to systematically evaluate and improve their social responsibility, which contributes to long-term sustainable social change.
- The ICAI Framework: The Social Impact Assessment (Audit) Framework provides social impact assessors with technical guidance for conducting assessments.
- Separation from Financial Audit: It is important to note that this framework does not cover elements of a financial audit or review, which are governed by separate auditing and review standards.
5.5 The 16 Thematic Areas of SAS
The Social Impact Assessment Standards (SIAS) are divided into 16 specific thematic areas. Assessors must apply the relevant standard based on the specific activity or social project being evaluated.
List of Social Impact Assessment (Audit) Standards (SAS)
| Standard Number | Thematic Area Description |
|---|---|
| SAS 100 | Eradicating hunger, poverty, malnutrition, and inequality. |
| SAS 200 | Promoting health care (including mental health), sanitation, and making available safe drinking water. |
| SAS 300 | Promoting education, employability, and livelihoods. |
| SAS 400 | Promoting gender equality, empowerment of women, and LGBTQIA+ communities. |
| SAS 500 | Ensuring environmental sustainability, addressing climate change (mitigation and adaptation), forest, and wildlife conservation. |
| SAS 600 | Protection of national heritage, art, and culture. |
| SAS 700 | Training to promote rural sports, nationally recognised sports, Paralympic sports, and Olympic sports. |
| SAS 800 | Supporting incubators of social enterprises. |
| SAS 900 | Supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building. |
| SAS 1000 | Promoting livelihoods for rural and urban poor, including enhancing income of small and marginal farmers and workers in the non-farm sector. |
| SAS 1100 | Slum area development, affordable housing, and other interventions to build sustainable and resilient cities. |
| SAS 1200 | Disaster management, including relief, rehabilitation, and reconstruction activities. |
| SAS 1300 | Promotion of financial inclusion. |
| SAS 1400 | Facilitating access to land and property assets for disadvantaged communities. |
| SAS 1500 | Bridging the digital divide in internet and mobile phone access, and addressing issues of misinformation and data protection. |
| SAS 1600 | Promoting welfare of migrants and displaced persons. |
5.5.1 Compliance with SAS
Compliance with SAS is mandatory for any social impact assessment conducted for social enterprises listed on the Social Stock Exchange (SSE).
- Assessor Responsibility: The social impact assessor is responsible for ensuring that all guidance within the SAS is strictly followed during the assessment process.
- Material Departures: If for any reason an assessor cannot perform the assessment in accordance with the SAS, the final report must clearly draw attention to any material departures.
- Effective Date: Assessors are expected to follow the standards for all assessments commencing on or after the effective date specified within each individual SAS.
5.6 The Social Impact Assessment Standard (SAS) Framework
The SAS Framework serves as a foundational frame of reference for both social impact assessors and the intended users of the reports (such as the responsible party and the engaging party).
5.6.1 Objectives of the SAS Framework
The primary objectives of the framework include:
- Providing guidance for the assessment of projects or activities of social enterprises registered or listed on the SSE.
- Offering guidance for assessing the social projects of any other organizations beyond those on the SSE.
- Establishing a basis for preparing the Social Impact Assessment Report based on the assessor’s findings and the evidence obtained.
5.6.2 Scope of the SAS Framework
The application of the framework is defined by the following boundaries:
- Core Application: It applies to project or program assessments conducted by social impact assessors using SAS principles.
- CSR Alignment: The framework can be applied to CSR Impact Assessments as mandated under the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.
- Reporting Agreements: Assessors and entities can agree to use the framework even when there are no intended users other than the reporting entity, provided the report includes a use-restriction statement.
- Financial Exclusion: The framework explicitly excludes elements of financial audits or reviews.
- Engagement Exclusion: Other professional engagements, such as statutory audits, internal audits, or tax audits, do not fall under this framework's scope.
Key Takeaways
- Mandatory Standards: SAS compliance is not optional for entities on the Social Stock Exchange; it is a regulatory requirement.
- Thematic Focus: There are 16 specific standards (SAS 100-1600) covering everything from hunger to digital divide.
- Guidance vs. Requirement: While the SAS Framework provides the "frame of reference," the individual SAS documents provide specific guidance for thematic performance.
Important Terms
- ICAI: Institute of Chartered Accountants of India, the body that developed the SAS Framework.
- Thematic Area: A specific sector of social intervention (e.g., Health, Education, Environment).
- Engaging Party: The entity that hires the social impact assessor (e.g., a donor or funder).
- Responsible Party: The persons within a social enterprise responsible for implementing the project being assessed.
Note: This concludes Part 3 of Chapter 5. Part 4 will cover the Social Impact Assessment Process, including stakeholder mapping, planning, and evidence collection.