SROI Analysis and the development of a ESG Rating System for Senegalese Social Enterprises
Location Senegal
Duration 2022- 2025 (36 months)
Project leader Comunità Impegno Servizio Volontariato (CISV)
Partners RETE ONG – Associazione di tecnici per la solidarietà e cooperazione internazionale, LVIA – Associazione Internazionale Volontari Laici, Mercato Circolare, Centro Interdipartimentale di Ricerca e Cooperazione Tecnico Scientifica con l’Africa (CISAO), Centre d’Appui à la Promotion de l’Entrepreunariat Rural (CAPER sas), Fédération des Associations Paysannes de la région Louga (FAPAL) and ESPERE SENEGAL SARL.
Funding AICS – Agenzia Italiana Cooperazione allo Sviluppo
Context
Senegal has an unemployment rate of 15,7% for men and 22,1 % for women, a rate that rises between 30% and 40% for young people: every year, 120.000 new young people enter the labour market in a context where precarious working conditions are one of the main causes of migration.
Most of Senegalese enterprises have micro, medium or small dimensions and informal features; the agricultural sector has great potential for investment and business development, especially in cereal and horticultural sectors.
However, the dynamism and the entrepreneurial capacity of these enterprises often couple with a lack of management tools, formalisation, networking skills and trust toward public support systems.
The PRO VIVES project aims to contribute to the sustainable and inclusive development in 4 regions of Senegal (Dakar, Thiès, Louga, Saint-Louis) by offering support to rural and urban micro-small-medium sized enterprises through digital innovation, circular economy and social economy approaches.
General objective
The Social Economy and Sustainability Management Unit was involved in supporting the development of an enabling ecosystem for social enterprises in Senegal.
On the one hand, the Unit worked to facilitate and promote the practice and methodological tools for assessing the performance of social enterprises (ESG rating system). On the other, it supported the establishment of a ‘Social Business Task Force’ involving key public and private stakeholders in Senegal to carry out advocacy work for the development of an enabling ecosystem for social enterprises in the country.
Our contribution
The Social Economy and Sustainability Management Unit has developed a social rating system for social enterprises in Senegal and has carried out a social impact assessment of three enterprises involved in the project, using the SROI (Social Return on Investment) methodology.
The social rating system created aims to assess the performance of social enterprises by highlighting their role as key players in social cohesion and in addressing environmental and social challenges.
The tool was developed around five macro-dimensions – social, economic, financial, environmental, legal and regulatory – analysed through a set of dimensions and indicators selected to understand the enterprises’ operations and their relevance within the relevant context (ESG rating system for social businesses).
Application of the tool yields both an overall summary score and a score for each macro-area, as well as an alphanumeric code identifying the enterprise. The combination of analysis and quantitative scoring is designed to offer useful support to enterprises, helping them to gain a deeper understanding of their own activities, but also to lenders, NGOs and local authorities interested in strengthening their decision-making processes regarding the provision of credit, grants and investments in favour of social enterprises.
ARCO also worked on setting up a ‘Social Business Task Force’, involving the main public and private stakeholders in Senegal’s social and solidarity economy sector. The task force was established as a working group to explore the topic of the social and solidarity economy in Senegal in greater depth and to consider the development of the rating tool, ensuring a participatory and bottom-up approach to its creation
With a view to providing an additional tool for businesses, ARCO carried out a social impact assessment of three enterprises involved in the project, using the SROI methodology. The methodology, adapted to suit the context of small Senegalese enterprises, enabled a qualitative and quantitative analysis of the extent of the impact these enterprises generate in the local area.
Read more on our Social Economy & Sustainability Management Unit