Part A: Background and context

A1: Introduction

Shift’s work with financial institution (FI) practitioners shows demand for stronger approaches to social performance measurement. Measurement can inform investment decisions, engagement strategies and organisational learning. Effective human rights due diligence (HRDD) depends on tracking progress using decision-useful indicators, yet practitioners still struggle to move beyond input and activity-based metrics. In 2025, with support from the Generation Foundation, Shift convened practitioner clinics to identify strategies and good practices, producing eight practical tips for FIs.

A2: Why is social performance measurement important for investors and lenders?

Measurement is rising in importance: the UNGPs and OECD Guidelines require tracking effectiveness; regulations mandate human rights disclosures (e.g., CSRD, SFDR, modern slavery laws in the UK, Canada and Australia); and there is growing interest in how social performance informs value creation. Stakeholders assess how FIs manage human rights risks, as reflected in benchmarks such as the World Benchmarking Alliance Financial System Benchmark and the BankTrack Human Rights Benchmark.

A3: Shared challenges and misperceptions

Three key challenges were identified: disproportionate focus on easily quantifiable areas such as DEI or Occupational Health and Safety; indicators offering limited insight into behavioural change (e.g., number of trainings, frequency of audits); and opaque composite indicators from commercial data providers. Shift’s analysis of 1,300 ESG indicators and metrics informed a series of guardrails (p.5).

Four misperceptions were addressed: absence of common vocabulary; a fragmented regulatory landscape; perceived competition between sustainability priorities; and difficulty translating social issues into headline targets.

Part B: Practical tips for financial institutions

B1: Getting started

Six business case arguments were identified, including demonstrating FI leverage and enabling human rights analysis at scale (p.7). FIs should clarify what they want to measure, for whom and for what purpose, across three dimensions: the FI’s own due diligence, client/investee HRDD maturity, and progress on specific salient impacts (p.8). An iterative “learning by doing” approach is recommended (p.9).

B2: Measuring HRDD maturity (Dimensions 1 & 2)

FIs should prioritise indicators that predict business decision-making, focusing on how organisations are set up and run. These include governance indicators (e.g., frequency of board-level HRDD updates), stakeholder engagement indicators and target-setting indicators (p.10). Maturity models — such as Redwheel’s human rights framework — provide a systematic, consistent and repeatable basis for assessing HRDD maturity and informing engagement strategies (p.11–12).

B3: Measuring progress or impact on a salient issue (Dimension 3)

When measuring a specific salient issue, FIs should define scope across five elements: the issue, financial product(s), sector(s), geography or jurisdiction(s), and affected stakeholders most at risk (p.13). A theory of change approach specifies the causal pathway from inputs through to outcomes for people, supported by root cause analysis (p.15). FIs should be selective when quantifying at scale, as many severe impacts do not translate into standardised metrics. Living wage is highlighted as having genuine potential for quantification at scale (p.17).

Part C: Conclusion

Better measurement is achievable when anchored in international standards and emerging practice. Understanding the three dimensions helps identify appropriate techniques. As practitioners develop stronger indicators, better data should become available.

Annex: Summary — Guardrails

Shift’s guardrails advise FIs to avoid indicators that create perverse behavioural consequences (e.g., number of grievances), encourage unjustified conclusions (e.g., composite indicators), or capture intentions without evidence of follow-through (e.g., existence of policies without evidence of use) (p.19).