Financial Quotient

What is social return on investment?

Social return on investment (SROI) is a framework that takes into account economic, social and environmental value created or destroyed by an activity.

It is the ratio of the total value created by the activity to the investment cost incurred. It is much broader than the traditional financial return considered in the business world in that it also includes incremental environmental and social value created for the key stakeholders involved.

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A version of this article appeared in the print edition of The Sunday Times on July 07, 2019, with the headline 'What is social return on investment?'. Print Edition | Subscribe