Social benefit is the comprehensive measure of all positive value generated by an economic activity. It is the total wellbeing created, combining both the private gains captured by economic actors and the broader societal gains that extend beyond market transactions.
The concept of social benefit comprises two distinct components. The first is Revenue, which is the direct financial income obtained from the sale of product outputs. This is the market value that accrues to the economic actor conducting the activity, reflecting the private returns from economic exchange.
The second component consists of external benefits, which are positive Externalities that enhance human wellbeing for other economic actors or society at large without being reflected in market prices. These external benefits are value created by an activity that spills over to benefit others beyond the direct transaction. Examples include improved air quality from emission reductions that benefits public health, enhanced biodiversity from sustainable land management practices, or knowledge spillovers from research activities that advance collective understanding.
Social benefit matters for comprehensive sustainability assessment and cost-benefit analysis. Whilst conventional economic accounting captures revenue, it fails to recognise the external benefits that contribute significantly to overall human wellbeing. By acknowledging the full scope of social benefit, decision-makers can evaluate economic activities more holistically.
As Chief Operating Officer, Iris leads our organisational development and oversees day-to-day operations. Before joining 2-0, she worked in the biotechnology sector. As an LCA consultant, Iris has devoted her expertise primarily to the domains of sustainable agriculture and food production. She is dedicated to teaching LCA and is responsible for our educational efforts. Iris holds an M.Sc. in Biology – Biotechnology from the University of Copenhagen.
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Glossary terms are clearer once you have seen them applied. Our guide to what LCA is and how it works walks through the complete methodology: goal and scope, inventory modelling, impact assessment, and interpretation.
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