India’s Social Stock Exchange (SSE) has been designed not only to help social enterprises raise funds but also to ensure that the money raised is used for measurable social impact.
To achieve this, the regulatory framework introduces systems such as impact assessments, Social Impact Assessors, and oversight bodies that monitor disclosures, governance standards, and social outcomes.
Let’s take a closer look at how social impact is assessed and monitored, and why it plays an important role in participating in the SSE ecosystem.
Key Takeaways
- Social audits assess the real world impact of projects run by social enterprises.
- Certified social impact assessors independently evaluate social impact outcomes.
- The SSE Governing Council oversees the functioning of the Social Stock Exchange.
- Impact reporting, Annual Impact Reports (AIRs), and disclosure requirements aim to improve transparency for donors, contributors, and other stakeholders.
What Is a Social Audit?
A social audit is an independent assessment that evaluates the social impact created by a project or programme carried out by a social enterprise.
The review examines whether the organisation’s activities have achieved the intended outcomes for the target population.
Under the SSE framework, social enterprises raising funds may be required to disclose the impact of their initiatives through such independent evaluations.
Also Read:What are social bonds?
Who Can Act as a Social Impact Assessor?
A Social Impact Assessor is a certified professional authorised to assess and evaluate the social impact of social enterprises and SSE-funded initiatives. To qualify as a social auditor, an individual must meet specific requirements designed to ensure credibility and expertise in impact evaluation.
The individual must be registered with a recognised self-regulatory organisation specified by Securities and Exchange Board of India and must have qualified the certification programme conducted by the National Institute of Securities Markets (NISM).
In addition, the individual must complete a certification programme conducted by the National Institute of Securities Markets and hold a valid certification confirming their eligibility to perform social audits.
These requirements ensure that social impact assessments are carried out by trained professionals with the necessary knowledge and professional standards.
Self-Regulatory Organisations for Social Impact Assessors
Under Regulation 292A(f) of the SEBI ICDR Regulations, Social Impact Assessors must be registered with recognised self-regulatory organisations.
In addition to the self-regulatory organisation under the Institute of Chartered Accountants of India, SEBI has specified other organisations that can act as self-regulatory bodies for Social Impact Assessors. These include:
- ICMAI Social Impact Assessor Organization under the Institute of Cost Accountants of India
- ICSI Institute of Social Impact Assessor under the Institute of Company Secretaries of India
Governing Council for the Social Stock Exchange
Each Social Stock Exchange must establish a Social Stock Exchange Governing Council (SGC) in accordance with Regulation 292D of the SEBI ICDR Regulations.
The SGC must consist of individuals with expertise relevant to the development of the social investment ecosystem.
The council must include at least 7 members representing these stakeholder groups and is required to meet at least four times during a financial year.
Why Impact Monitoring Matters on SSE?
Impact monitoring is central to the concept of the Social Stock Exchange. Investors and donors who support social enterprises expect transparency regarding how their funds are utilised and the impact those funds create.
To ensure this transparency, impact assessments, Annual Impact Reports (AIRs), and independent evaluations play a critical role.
Also Read:What Is Stock Exchange?
Conclusion
India’s Social Stock Exchange incorporates structured monitoring systems to ensure transparency and accountability in social impact funding. Through social audits, certified impact assessors and oversight by the SSE Governing Council, the framework aims to track how funds are deployed and whether social enterprises deliver measurable results. These mechanisms help strengthen trust between social enterprises, investors and the broader social impact ecosystem.
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