Social and Environmental Impact


Calculating the social and environmental impact value of an investment

Presented by Chris Addy, Maya Chorengel, Mariah Collins and Michael Etzel; HBR Jan-Feb2019


It is an attempt by various organizations in this industry to bring the rigor of financial performance metrics to measure Social and Environmental Return on Investment (SERI). There are several universally accepted tools, such as the internal rate of return (IRR), for estimating the financial return on an investment. However, there is not yet a universally accepted instrument capable of effectively assess the expected social and environmental rewards in monetary terms, like in these cases:

  • Online course designed to prevent alcohol abuse among college students;
  • Program to educate college students about dating violence and sexual harassment;
  • Financial literacy program that presents students with credit cards, interest rates, taxes and insurance.

The calculation method consists of six steps:


Step 1: Assess the relevance and scale

Step 2: Identify target social or environmental outcomes

Step 3: Estimate the economic value of those outcomes to society

Step 4: Adjust for Risks

Step 5: Estimate Terminal Value

Step 6: Calculate the social return of each dollar invested



·         Chris Addy is a partner at the Bridgespan Group, a global social-impact advisory firm.

·         Maya Chorengel is a senior partner at the Rise Fund, an impact fund that is part of the private equity firm TPG Growth.

·         Mariah Collins is a manager at the Bridgespan Group.

·         Michael Etzel is a partner at the Bridgespan Group.



Article in HBR:

Bridges Impact Foundation: (social impact advisor)

Bridges Impact+: (Found Management)

J-PAL Lab: (reduce poverty)

MacArthur Foundation: (building a more just, verdant, and peaceful world)

MDRC: (Non-Profit)

Omidyar Network: (Consultoria de inovação social)

Rise Fund: (achieving social and environmental impact)

Rockefeller Foundation: (Non-Profit)

Root Capital: (Transform Rural Communities)

Skopos Impact Fund: (Impact Investing)

TPG Growth: (Consulting)

World Economic Forum: (Public-Private Cooperation)