NISM Series XXIII · Chapter 5: Social Impact Assessment and Social Impact Assessors
L1 · FoundationSocial Impact Assessment and Social Impact Assessors — the ground floor
How social impact assessment evolved in India, how it differs from a financial audit, the seven principles, who can be a Social Impact Assessor and how they are empanelled, the sixteen SAS, the engagement and its three parties, evidence, fieldwork, the report and the two opinions.
16 min read · Worth 10% of the paper · Written from pages 105–142 of the official NISM workbook · Updated 18 September 2026
Where social impact assessment came from
The idea that business owes something to society is old in India. The workbook starts with the Gandhian philosophy of trusteeship, and with the tradition of giving back in Indian businesses.
The modern milestones:
| Milestone | What the workbook says |
|---|---|
| NGRBC, 2018 | National Guidelines on Responsible Business Conduct — businesses should contribute to wider development goals while staying economically viable |
| SDGs, 2015 | Adopted by the United Nations; India is a signatory. Aim: end poverty, protect the planet, peace and prosperity for all by 2030 |
| BRSR | Business Responsibility & Sustainability Reporting, based on NGRBC — a compliance requirement for the top 1000 companies in India. NGRBC is dovetailed with the UN Guiding Principles on Business & Human Rights (UNGP) |
| MGNREGA, 2006 | Guarantees 100 days of unskilled manual labour to adult members of rural households. The Gram Sabha monitors it and conducts social audits |
| CSR impact assessment | Rule 8(3) of the CSR Rules brought SIA into compliance (see below) |
Other global standards named: GRI, ISO 26000 (Guidance on Social Responsibility), PRI and SASB.
The CSR rule, in the workbook's words: companies with an average CSR obligation of INR 10 crore or more in the three immediately preceding financial years must undertake impact assessments for CSR projects with outlays of INR 1 crore or more, provided those projects were completed at least one year before the impact assessment.
What is social impact assessment?
Under the SEBI ICDR Regulations, the term Social Audit has been replaced by Social Impact Assessment. The two share principles: evaluating social outcomes, engaging stakeholders, promoting transparency and accountability.
The workbook gives three definitions:
| # | Definition, in short |
|---|---|
| 1 | A systematic evaluation of an organisation's social, ethical, cultural and environmental performance, going beyond financial reporting |
| 2 | A process to assess and show social, economic and environmental benefits and limitations — how far an organisation lives up to its shared values and objectives |
| 3 | A process of research, planning and management of social change (positive and negative, intended and unintended) from policies, plans and projects |
In plain words: it asks what really changed for people, and how we know.
Social impact assessment is not a financial audit
| Financial audit | Social impact assessment | |
|---|---|---|
| Looks at | Financial statements and transactions | Impact on society |
| Approach | Managers' and owners' view | "Outside in" — how non-financial stakeholders see the business |
| Data | Mainly financial data | Social parameters, mostly gathered from outside the organisation |
| Bottom line | Financial | Triple bottom line |
| Perspective | Financial only | Multi-perspective |
| Stakeholders | Mainly shareholders | All stakeholders |
| Methods | Standardised | Vary by project and thrust area |
| Indicators | Mainly quantitative | Quantitative and qualitative |
| Comparison | With the auditee | Within the organisation + external standards + comparable organisations |
The seven principles of impact assessment
These come from ISO 19011 (guidelines for auditing management systems). Why do they matter? Two assessors who work apart should reach the same conclusion on the same facts. The principles make that happen.
| # | Principle | Key point |
|---|---|---|
| 1 | Integrity | The foundation of professionalism. Honest, competent, impartial, alert to influence |
| 2 | Fair presentation | Report truthfully, including significant obstacles and unresolved diverging opinions |
| 3 | Due professional care | Diligence and reasoned judgement |
| 4 | Confidentiality | Security of information; no use for personal gain |
| 5 | Independence | The basis for impartiality. In small organisations internal assessors may not be fully independent, but every effort is made to remove bias |
| 6 | Evidence-based approach | Evidence must be verifiable, and is generally based on samples, since time and resources are finite |
| 7 | Risk-based approach | Focus on matters significant for the client and the objectives |
Who is a Social Impact Assessor?
SEBI ICDR definition: "an individual registered with a self-regulatory organization under the Institute of Chartered Accountants of India or such other agency, as may be specified by SEBI, who has qualified a certification program conducted by NISM and holds a valid certificate."
Who can conduct the assessment — one of six:
| # | Qualification | Experience in development sector |
|---|---|---|
| 1 | Chartered Accountant (CA) | — |
| 2 | Company Secretary (CS) | — |
| 3 | Cost and Management Accountant (CMA) | — |
| 4 | Post-graduate from a UGC-recognised university | Minimum 3 years |
| 5 | Graduate from a UGC-recognised university | Minimum 6 years |
| 6 | Any other person with suitable accreditations | Minimum 6 years |
Registration wording — note the difference. Section 5.3.1 and 5.9.1 say registered with an SRO under ICAI. Section 5.3.3 says all SIAs must be registered with an SRO under the Institute of Social Auditors of India (ISAI), or such other agency as SEBI specifies. Know both phrasings.
The Code of Conduct — eight values
The Code of Conduct guides the assessor to do the job well. It is in addition to the rules of the SSE and other regulators.
| Value | What it means |
|---|---|
| Non-judgmental attitude | Plan and perform the work without judging, to get sufficient appropriate evidence |
| Integrity | Never knowingly linked to materially false or misleading information |
| Objectivity | Open mind; facts over opinion; no bias or conflict of interest |
| Empathy | Understand the context and what stakeholders say |
| Cultural sensitivity | Do not impose outside values without knowing the local context |
| Transparency | Explain the purpose; share findings openly |
| Constructive feedback | Aim at improvement, not punishment |
| Professionalism | Confidentiality, lawful conduct, a practical outlook |
Competencies and skills
Competencies are what you know and how you behave. Skills are specific things you have learned to do. The workbook lists 16 skills.
| Area | Examples from the workbook |
|---|---|
| Competencies | Assessment principles and methods; SAS, ISO 26000, NGRBC, BRSR; the auditee's context; applicable laws |
| Essential knowledge | Thorough knowledge of the SDGs and the NITI Aayog SDG Index |
| Questionnaires | Many stakeholders, long distances, anonymity |
| Focus group discussions | Small groups, in-depth qualitative insight |
| Direct interviews | One-on-one, structured or semi-structured |
| People skills | Communication, empathy, active listening, cultural sensitivity, observing body language, research, interpersonal skills |
Empanelment with an SRO
All SIAs shall be empanelled with an SRO. The SRO weighs four things.
| Criterion | Weight |
|---|---|
| Experience in assuring non-financial information | Positive — social sector experience counts more |
| Number of partners or staff who meet SIA criteria (firms) | Positive |
| Disciplinary cases or sanctions | Negative |
| Future parameters — size and complexity of projects, sector expertise | To be added over time |
The Social Impact Assessment Standards (SAS)
Social impact assessment standards set guidelines for assessing and reporting social and environmental performance. The Social Impact Assessment (Audit) Framework was developed by ICAI. It does not cover any element of a financial audit or review.
The standards cover sixteen thematic areas, SAS 100 to SAS 1600:
| SAS | Area |
|---|---|
| 100 | Hunger, poverty, malnutrition, inequality |
| 200 | Health care (incl. mental health), sanitation, safe drinking water |
| 300 | Education, employability, livelihoods |
| 400 | Gender equality, women, LGBTQIA+ communities |
| 500 | Environmental sustainability, climate change, forest and wildlife |
| 600 | National heritage, art and culture |
| 700 | Rural, nationally recognised, Paralympic and Olympic sports |
| 800 | Incubators of social enterprises |
| 900 | Platforms strengthening the non-profit ecosystem |
| 1000 | Livelihoods for rural and urban poor, farmers, non-farm workers |
| 1100 | Slum development, affordable housing, resilient cities |
| 1200 | Disaster management |
| 1300 | Financial inclusion |
| 1400 | Access to land and property for disadvantaged communities |
| 1500 | Digital divide, misinformation, data protection |
| 1600 | Welfare of migrants and displaced persons |
Compliance with SAS is mandatory for assessments of social enterprises listed on an SSE. If an assessor cannot follow SAS, the report must draw attention to the material departures. SAS apply to assessments commencing on or after the effective date in each SAS.
The SAS Framework gives guidance on the elements and objectives of an assessment. It does not itself set requirements for any specific thematic area — those are in the individual SASs. It applies to SSE social enterprises and may also be applied to other engagements such as CSR impact assessment. It does not cover statutory, internal or tax audits. If the reporting entity is the only intended user, the report includes a statement restricting its use.
The engagement — five elements, three parties
A social impact assessment is an independent, objective and reliable examination of the impact of a project, programme or project-based activity. It checks operation against stated strategic intent, assesses stated performance, and suggests improvements through a management letter.
Five elements: (1) three party relationship, (2) social project/programme/intervention scope, (3) Social Project Monitoring Framework, (4) evidence, (5) report.
Three parties:
- Social impact assessor
- Responsible party — people in the social enterprise implementing the project. May or may not be the engaging party (which could be the donor).
- Intended users — those for whom the report is prepared. The responsible party can be one of them, but not the only one.
Written representations from management are necessary evidence, but not sufficient by themselves.
The Social Project Monitoring Framework (using Theory of Change or Logical Framework Approach) details inputs, activities, outputs, outcomes and impact. Six parameters assess the change:
| Parameter | The question it asks |
|---|---|
| Inclusiveness | Can the poorest and most marginalised access the benefits? |
| Relevance | Does the project make sense for the community's needs? Was planning participatory? |
| Effectiveness | Is it achieving what it set out to? Can it be replicated? |
| Efficiency | How well were time, money and people used? |
| Convergence or Coherence | Does it fit with government policies and partnerships, avoiding duplication? |
| Sustainability | Will benefits last after the funder exits? Is there an exit strategy? |
Evidence
Evidence is what turns a claim into a finding. The workbook sorts it several ways.
| Topic | What the workbook says |
|---|---|
| Four forms | Documentary; Oral (note inconsistencies); Physical (inspect and count assets); Analytical (comparisons, calculations, relationships) |
| Secondary data | Records the organisation keeps; public data; data from a public authority under RTI |
| Primary data | First-hand: interviews, questionnaires, FGDs, surveys |
| Probabilistic sampling | Simple random, systematic, cluster, stratified |
| Non-probabilistic sampling | Quota, judgemental, snowball |
| Evidence building | Competence (reliability), relevance (pertinence), sufficiency (is it enough) |
If the assessor cannot get enough good evidence, there is a scope limitation.
Quality control, experts and documentation
A quality control system covers six areas: leadership, ethics, acceptance and continuance of relationships, human resources (including experts), engagement performance, and monitoring.
The assessor may use a field level research agency or experts, but remains primarily responsible for the report. The assessor should not refer to an expert's work in the report unless law requires it — and then must state that the reference does not reduce the assessor's responsibility.
The final engagement file should be assembled usually not more than 60 days after the date of the report. After that, nothing may be deleted or discarded before the end of its retention period.
Fieldwork
You cannot show change without a starting point. So establishing the baseline is critical.
| Topic | What the workbook says |
|---|---|
| Baseline, midline, endline | Show what changed due to the intervention |
| Universe | Finite if the number of items is certain; otherwise not finite |
| Sampling unit | The smallest unit of observation — family, school, village, district |
| Sample size | Larger is better but costs more; needs a confidence interval and margin of error |
| Observation | No talking to respondents; independent of their willingness to respond |
| Interviews | Structured (fixed questions, fixed order) or unstructured (flexible) |
| FGD | Moderated group discussion; helps validate survey data |
| Data quality | Validity, reliability, completeness, integrity, timeliness (printed "Timelines") |
One simple rule on counting: two beneficiaries of one family may be grouped as one family. And do not report what you cannot verify.
Challenges and technology
| Challenge | Workbook remedy or note |
|---|---|
| Softer data — confidence, self-esteem | Proxy indicators, paisa scale, narrative numeracy |
| Lack of traceable indicators | Plan data needs at the design stage; hire a qualified professional |
| Hard-to-trace groups — adult learners, nomads | Primary evidence and audit trail are hard |
| Organisations hiding data | Access to data is necessary to draw conclusions |
| Over-claiming | Intervening variables, quality-of-life indicators, dead weights |
| Multi-sector projects | Assessment gets long and less rigorous |
| Shortage of trained assessors | Hard to find experts in every sector |
Technology helps too. Think phone surveys, virtual meetings, databases and charts.
The report and the opinion
The report must be in writing. The assessor should not report orally, because oral conclusions can be misunderstood. It should be comprehensive, convincing and balanced. The framework does not require a standardised format, only basic elements.
The indicative format has four sections: I — context and project, SAS and SDG alignment; II — scope, methodology, Social Impact Map (logic frame), KPIs; III — key findings and case studies; IV — annexures.
Two opinions:
| Opinion | When |
|---|---|
| Unqualified (unmodified) — the "Clean Report" | No material mismanagement; enough good evidence |
| Qualified (modified) | Not enough good evidence, or the report as a whole is not free from material mismanagement |
Think of it like this
A financial audit checks the kirana shop's cash book; an SIA asks the neighbourhood
A CA auditing a kirana store sits inside, checks the cash book, bills and stock register, and tells the owner whether the accounts are true.
A social impact assessor walks out of the shop. They ask the customers whether they get fair prices, the delivery boy about working hours, and the lane whether the shop blocks the road. That is the "outside in" approach — most of the evidence is gathered from outside the organisation, it uses qualitative as well as quantitative indicators, and methods vary by project instead of following one standard checklist.
The three-party relationship is a school report card
A class teacher (the assessor) evaluates a student's year. The student and their tutor did the work (the responsible party). The report card goes to parents, the principal and the next teacher (the intended users).
The student sees the report too, but it is not written only for them — otherwise it would just be a self-assessment. That is the workbook's rule: the responsible party can be one of the intended users, but not the only one. And whoever pays the school fee — sometimes a grandparent, like a donor — may be the engaging party without being the student.
Dead weight is the monsoon that would have filled the well anyway
An NGO deepens a village well in May. In August the well is full, and the NGO reports "water problem solved". But the monsoon would have filled it in August anyway.
The honest question is the one the workbook asks: what would have happened in the absence of the project? Subtracting what would have happened anyway — dead weight — and allowing for intervening variables is how the assessor avoids over-claiming. The real impact is only the extra water in the dry months.
A clean report versus a qualified one is a vehicle fitness certificate
An RTO inspector checks a truck. If brakes, lights and papers are all in order and could all be inspected, the truck gets a clean fitness certificate.
If the inspector could not check the brakes because the truck was loaded, or found a fault, the certificate carries a note. That is the difference between an unqualified ("Clean Report") and a qualified opinion. A qualified opinion can come from lack of evidence as well as from a problem found — which is why a scope limitation alone can lead to it.
Key terms in this chapter
- Baseline
- The measurement of the starting point of a project, critical for showing what changed due to the intervention.
- BRSR
- Business Responsibility & Sustainability Reporting — a compliance requirement for the top 1000 companies, based on NGRBC.
- Dead weight
- Change that would have happened anyway without the project; used to avoid over-claiming impact.
- Engagement file
- The assembled documentation of an assessment, usually completed not more than 60 days after the report date and kept for its retention period.
- Engaging party
- The party that engages the social impact assessor; it may be the donor rather than the responsible party.
- Focus Group Discussion (FGD)
- A moderated discussion among a small group of stakeholders to gather qualitative insights and validate quantitative data.
- Intended users
- Those for whom the report is prepared; the responsible party can be one, but not the only one.
- ISO 19011
- The guidelines for auditing management systems from which the seven principles of impact assessment are drawn.
- Material departure
- A significant deviation from SAS that the assessor must draw attention to in the report.
- NGRBC
- National Guidelines on Responsible Business Conduct, 2018 — the basis for BRSR and dovetailed with the UN Guiding Principles on Business & Human Rights.
- Outside in approach
- Looking at an organisation through the eyes of non-financial stakeholders rather than its managers or owners.
- Paisa scale
- One of the methods the workbook names for capturing softer outcomes such as confidence or self-esteem, alongside proxy indicators and narrative numeracy.
- Qualified opinion
- A modified opinion given when sufficient appropriate evidence cannot be obtained or the report as a whole is not free from material mismanagement.
- Responsible party
- The people in the social enterprise who implement the social project.
- Sampling unit
- The minimum unit of observation in a sample, such as a family, school, village or district.
- SAS Framework
- ICAI's framework giving guidance on the elements and objectives of an assessment; it sets no thematic requirements and covers no financial audit elements.
- Scope limitation
- A situation where the assessor cannot obtain sufficient appropriate evidence.
- Self-Regulatory Organisation (SRO)
- The body with which every Social Impact Assessor must be registered and empanelled.
- Social Impact Assessment (SIA)
- A systematic evaluation of an organisation's social, ethical, cultural and environmental performance; the ICDR term that replaced "Social Audit".
- Social Impact Assessment Standards (SAS)
- ICAI's sixteen thematic standards, SAS 100 to SAS 1600, mandatory for assessments of SSE-listed social enterprises.
- Social Impact Assessor
- An individual registered with an SRO (under ICAI or another SEBI-specified agency) who has qualified NISM's certification and holds a valid certificate.
- Social Project Monitoring Framework
- The Theory of Change or logframe of a project, detailing inputs, activities, outputs, outcomes and impact; it helps the assessor identify evaluation parameters.
- Triple bottom line
- Judging performance on social, environmental and economic results, not only financial profit — the approach SIA adopts.
- Unqualified opinion (Clean Report)
- An opinion given when there is no material mismanagement and sufficient appropriate evidence has been obtained.
- Written representations
- Written statements from management on material issues — necessary evidence but not sufficient by themselves.
Check you have understood it
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Create a free accountOriginal explanatory writing based on the official NISM workbook for Series XXIII, which is published and copyrighted by NISM. Check figures against the current edition at nism.ac.in.