Social return on investment as a tool for environmental impact and strategic assessments: Evidence from South Korea

Environmental Impact Assessment (EIA) is a critical tool for evaluating the potential environmental impacts of development projects. While much research has explored EIA's methodologies, there has been limited focus on the quantification of its environmental benefits relative to the cost of development. Prior research on performance metrics in ECBA has focused on either environmental or financial aspect alone. To address this gap, this study evaluates the effectiveness of EIA programs in South Korea by calculating their Social Return on Investment (SROI). Our analysis shows that EIA of a steam power project yielded a 12 % annual social return from invested capital by reducing air pollution, while a golf course development EIA provided a 1 % annual social return through land protection. This shows that using SROI helps identify projects that offer the greatest environmental benefits for the investment, enabling governments to allocate constrained funds more effectively toward projects that maximize environmental sustainability. The integration of SROI into EIA and Strategic Environmental Assessment (SEA) further provides policymakers with a unified metric for comparing policy alternatives and facilitates communication among stakeholders by integrating environmental and financial effectiveness into a single performance measure.