NBS logo

Executive Report: Measuring and Valuing Social Capital

This guide shows how businesses can make social capital part of their decision-making and reporting.

A Way for Business to Think About Relationships

“It’s not what you know but who you know.” People have always recognized the importance of relationships.

The integrated reporting movement asked that businesses make relationships part of their reporting. International Integrated Reporting Council (IIRC) guidance suggests that a company’s public report should include information about six forms of “capital,” including social capital, which focuses on “institutions and relationships.”

South Africa: Leading Integrated Reporting

South Africa is the first country to make integrated reporting a requirement for listed companies. When a group of South African business leaders met in 2013 to identify sustainable development challenges, they asked: How can we measure and value social capital for business decision-making and reporting?

“Business and society must come to a place of agreement on how businesses create value,” said Ansie Ramalho of the Institute of Directors in Southern Africa.

In response, the Network for Business Sustainability South Africa asked scholars to conduct a systematic review of social capital research. With direction from a Guidance Committee of business leaders, researchers Moses Acquaah, Kwasi Amoako-Gyampah, and Nceku Q. Nyathi reviewed and synthesized 314 studies.

What this Report Provides

Designed for business leaders, this Executive Report provides:

  • A definition of social capital

  • An overview of its business benefits

  • Measures and tools that can be used to assess the key dimensions of social capital

  • Case studies of social capital management by South Africa’s platinum industry and Transnet, a freight transport company.

The report can also be used by government representatives and other societal change agents. While the research addresses the South Africa context, the findings have global relevance.

Understanding Social Capital

Relationships are familiar territory. Social capital is a formal way of thinking about relationships. Technically, the term refers to an individual’s or group’s ability to secure or obtain resources, knowledge and information through relationships with and among individuals and groups.

These relationships exist inside an organization (e.g. among employees) and outside an organization (e.g. between the organization and external stakeholders such as communities, consumers and regulators).

Social capital has three key elements:

  • Social networks. A social network is the interactions and relationships between individuals or organisations.

  • Trust and reciprocity. Trust and reciprocity are about the quality of relationships, rather than the number of connections.

  • Shared norms and values. Shared norms and values are the common expectations which make interactions more productive.



Recognizing the Value of Social Capital

Social capital has many benefits. Internal social capital – good relationships among employees – makes companies more efficient and reliable, in operations, product and innovation management.

The firm’s relationships with external stakeholders also bring benefits. For example, companies with greater external social capital gain competitive advantage as a result of access to valuable resources, knowledge and information that are not easily traded.

Measuring and Managing Social Capital

Measuring social capital can help firms enhance it, and is also necessary to respond effectively to integrated reporting guidelines.

Each of social capital’s three dimensions is associated with particular measures. In this Executive Report and the Systematic Review, we describe the measures and provide specific tools.

An Issue for Business and Society

Use this report to understand what social capital is, how to measure it, and the value it provides to individuals, organisations and communities. The report will support you in making the business case to continue building social capital.

Ultimately, we need each other to survive. Organisations depend on diverse internal and external relationships. As with other forms of capital, effective management of social capital enhances the success of organizations and society.


More Project Outputs

Share this post:


Share on activity feed

Powered by WP LinkPress

Add a Comment

This site uses User Verification plugin to reduce spam. See how your comment data is processed.

This site uses User Verification plugin to reduce spam. See how your comment data is processed.

Join the Conversation


  • NBS

    The Network for Business Sustainability (NBS) is a non-profit advancing sustainable development to build a fairer and more environmentally sound future. We aim to improve business practice by facilitating knowledge sharing across an international community of business leaders, scholars, students and policy makers. With these stakeholders, we co-create high-quality content that enables practical action. Our content focuses on 6 critical sustainability themes, from climate change to social justice.

    View all posts
Related Articles
large house covered by thick green vines with windows uncovered

What Can Green Bonds Achieve?

Green bonds can be a good place to start with sustainable finance. But they have limits, too. Here’s what they offer issuers, investors, and the planet.

Read More

Partner with NBS to grow our impact

Skip to content