Capitals Framework

Social capital

Social capital comprises the networks of people that enable a society to function. We analyse how a company impacts different groups of stakeholders, and the consequent potential effects on its growth and profits.

2022 M08 3

9 minutes

Stephanie Niven
Sam Anthony
Social capital comprises the networks of people that enable a society to function. We analyse how a company impacts different groups of stakeholders, and the consequent potential effects on its growth and profits.
Stephanie Niven
Portfoliomanager
Sam Anthony
Analyst

The fast view

  • Companies are increasingly being held to account for their impacts on society and the environment, influencing their growth and profitability.
  • Investors need new tools to evaluate these impacts, or ‘externalities’, and hence identify opportunities and risks that the market may have mispriced.
  • The Sustainable Equity team has developed a Capitals Framework to assess a wide range of externalities. The framework is an intrinsic component of the investment processes of all the team’s sustainable strategies.
  • We assess different categories of externalities. This paper introduces the framework we use to do this and then focuses on how we analyse social capital externalities.

 

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