Updates From the Cityfi World of Social Return on Investment (SROI)

Dedicated readers of our blog know that we at Cityfi are interested in developing a more comprehensive framework for cost-benefit analysis — one that incorporates the impacts on everything from equity and quality of life to health and safety and the economy. In addition to being more comprehensive, we envision a tool that is more engaging and transparent in its calculations than ROI or cost-benefit analysis today.

Recently, we have been delighted to find interest in broader cost-benefit analysis across sectors. In sharing some highlights and reflections here from our research and work, we aim to build on the momentum.

What We’re Reading

1. Goldman Sachs’ report, Carbonomics: The Future of Energy in the Age of Climate Change touches on our vision by comparing a number of carbon abatement strategies (i.e. making buildings more energy efficient, replacing power plants with renewable ones, switching to electric vehicles) in terms of both cost and potential benefit. I find The Economist’s version of the visuals a bit clearer:

In this analysis, Goldman Sachs looked at the cost of different strategies in dollars versus the benefit in tons of CO2 reduced. Strategies on the left side of the chart offer the biggest bang for buck, though the report addresses some of the many complexities in more detail.

We appreciate how this sort of analysis lays the groundwork to add more layers in addition to fiscal cost and emissions reductions.

2. The Electrification Coalition created a tool to evaluate the total cost of ownership (TCO) to convert a given fleet to electric. We like how such cost estimates are comprehensive and long term, to contribute to social cost-benefit analyses. We also like the name of the tool- the Dashboard for Rapid Vehicle Electrification , or DRVE. However, the 1.0 version generated errors in Excel when we tried to use it. We contacted the owners to fix it.

3. The Baltimore Wood Project is a creative non-profit which employs ex-offenders to recycle wood waste for sustainable building, furniture and energy uses. We are particularly interested in a report conducted by Quantified Ventures in partnership with the USDA Forest Service and Humanism, which analyzes several categories of benefits for use in a social impact bond. Social Impact Bonds offer a compelling avenue to formalize such comprehensive ROI analyses.

What We’re Working On

We are excited to be partnering with the University of Maryland Business School to compare the social benefits of strategies related to affordable housing. The cohort is made up of Social Innovation Fellows with backgrounds and specializations ranging from finance and management to supply chain and sustainability.

Stay tuned for more updates here and on social media, and please don’t hesitate to reach out with thoughts.