What you need to know about social value
Penny Anderson, Head of Social Impact, Akerlof
IT’S fair to say that social value is an ever-evolving area covering a lot of ground. At the heart of it is ‘additionality’ – what can I/we do, more of, differently or something new, to add value?
It isn’t about adding value by creating a building or space which would have happened anyway, but about the way we go about the building process and the opportunities we take to make a difference.
The trends around social value have changed over the years as has its title – corporate social responsibility (CSR)/ community engagement/social impact/social return on investment etc).
When I first started in the field, education was a key priority and understanding how contractors could add value to the education system through building projects. With high unemployment, helping to develop local skills and support people into employment became a big focus.
Supporting apprenticeships has been a core tenet of delivering value for many years now.
More recently, environmental issues such as air quality and reducing carbon have started to play a role in social value. An important factor bringing all aspects together is working with communities to tackle local issues – large and small.
Social and environmental challenges are intrinsically linked. So often they are tackled or measured separately, but fundamentally they’re about people – our actions, behaviours, the impact we have on the world around us and ourselves.
How does social value relate to other metrics out there? And is social value the S in ESG – environmental, social, and corporate governance?
These are questions I am often asked. To try and answer them, I use a table (see figure 1) to show the headings which clients might refer to when talking about social value. The social row shows the areas which most closely align with my skillset and those of many of my professional peers.
The other areas are often referred to when talking about social value by clients, including government, however, they are challenges on their own and require an expert for real focus.
Social and environmental challenges are intrinsically linked. So often they are tackled or measured separately, but fundamentally they’re about people – our actions, behaviours, the impact we have on the world around us and ourselves. Social Value UK is part of SV International, a network existing to work with members to account, measure and manage social value from the perspective of those affected by an organisation’s activities.
They have defined seven principles of social value1, which provide a foundation for those wanting to consider value in their decision making:
- Involve stakeholders.
- Understand what changes.
- Value the things that matter.
- Only include what is material.
- Do not over claim.
- Be transparent.
- Verify the result.
- Be responsive.
Policy and Influencing factors
Evidence of voluntary organised efforts intended for socially useful purposes (philanthropy) can be found throughout history including in ancient Greek, Rome and Middle Eastern civilisations. But what has driven change in more recent times?
- The Town and Country Planning Act 1971 introduced S52 agreements (now section 106 of the 1990 act) – a legal agreement between an applicant seeking planning permission and the local planning authority which can be used to mitigate the impact of a new building on the local community and infrastructure. It can include commitments to deliver activities such as employing local people, working with local educators and providing skills and training for local people.
- The inception of the Considerate Constructor’s Scheme (CCS) in 1997 played its part in helping to raise the profile of the construction industry through auditing building sites of a range of sizes on their performance in relation to the workforce, the community and the environment.
- The Public Services (Social Value) Act 2012 (SVA) came into force in 2013, requiring all public sector bodies to ‘have regard to’ social, economic and environmental wellbeing in connection with public sector contracts. It was a big leap forward creating awareness in the public sector and those procuring work through public sector routes. It started out as a cross party initiative, helping to ensure it remained a focus for the long term. Many projects, particularly large ones responded with ambition to the SVA, setting new standards of what was achievable, creating strong networks with local communities, but for a long time, there was a lack of consistency. There were pockets of best practice, some areas where clients and organisations were trying to do their bit and many not getting off the starting blocks.
- The Procurement Policy Note (PPN) 06/20 social value framework, introduced in January 2021 means that there is now a minimum 10% mandatory weighting for social value to be included in public sector procurement processes. The framework aims to aid the procurement process by standardising questions in relation to social value allowing them to be scored appropriately in the award of government contracts.
- In addition, the Construction Playbook was released in December 2020 focusing on value-based procurement rather than the most economically advantageous tender. The influencing factors here relate to public sector, but private sector developers have played a key role in driving value through their contracts. As they aren’t spending public money, private organisations can be more flexible in how they approach adding value. This has led to some great examples of innovation, reaching into the heart of communities and tackling live challenges.
Its relevance to CICES members
It’s the language many clients are using. Being conversant in social value provides an opportunity to engage with clients on a level which is meaningful to them. Although it can seem like a complex area, learning the language of social value is something everyone can do – it isn’t essential to be an expert in everything, but if each person has a good understanding of the role they can play in adding value, that’s a really good starting point.
The trends around social value have changed over the years as has its title.The built environment sector is getting to grips with the topic – at various stages of maturity. An important message though is that if everyone plays their part, the collected influence we can have will be great. We all bring something different based on the role we do, the sector we work in, the interests we have and our experience.
If we can identify what we each have to offer and put plans in action to deliver, we will develop an industry filled with compassion and opportunity. There is already pride in the sector and some great foundations to build upon.
There is something for everyone – it might be mentoring, designing for a circular economy, trialling the use of a more sustainable material, designing out waste, demonstrating building information modelling (BIM) to students, giving advice to a charity on HR processes, explaining how maths is relevant in the world of work, tackling loneliness through phone calls or visits, redesigning recruitment processes to be more inclusive, talking to children about financial management; the opportunities are so varied, there is something for everyone.
What is value?
Figure 1 : Mapping social value - this demonstrates the wide range of areas which are included under the heading 'social value'. It also aims to demonstrate the relationship between aspects described under one framework to another.
Valuation of non-financial factors is a rapidly growing area and organisations who can express their value in more than monetary terms will be in a better position to face future challenges. This is a tricky challenge, but one we must get to grips with if we want to build a better tomorrow for future generations.
The value toolkit2, developed with experts from across the industry and government sets about redefining value and how to measure it. It enables organisations to make value-based decisions focused on driving better social, environmental and economic outcomes. It provides a base for people to start thinking differently, placing value on the things which can be hard to value and therefore are prone to being undervalued.
In many roles, particularly in the private sector, we are conditioned to go to work, earn money, own things and to contribute to profit. But at what cost? What does value really mean? Are we here to earn money, desire material things, help businesses to make profit? Or is there something else we are here to do? And is that something about adding value to people, the environment, society?
Social value is written into contracts, so we need to deliver what is required of us, but if we scratch beneath the surface, does social value give us the opportunity to work in a way which is more fulfilling, fair, supportive, inclusive? Does it allow us an opportunity to provide more than profit, but dare I say purpose too?
The future of social value for companies
‘Keep it simple’, sometimes, I feel like a broken record as I hear myself saying this a lot. A lot has happened in this field in recent years which is positive, however, its evolution has also made the social value space feel very complicated – I think that applies to those who work in it as well as to those whose roles connect with it.
It’s important for organisations to define their own truth around social value – what are the key aspects of social value which underpin who they are and what they can do for the better of the local economy, environment and community? Define your own foundations or principles. From here, you can start to build your own unique approach. The needs of your clients, customers and wider stakeholders should be at the heart of this. But what makes you you is what will really make the value you add significant.
Many people who work in the built environment are highly skilled and technical. Social value needs technical skills, but at heart it relies on ‘human’ skills. I just want to take a moment here to explain why I chose the word ‘human’. Often the skills I refer to are called ‘soft’ skills – but I feel this is the wrong word – it gives the impression that delivering social value is easy. Anyone who has delivered social value knows that easy doesn’t come into it.
‘Keep it simple’, sometimes, I feel like a broken record as I hear myself saying this a lot.Working with some of the most vulnerable people in society and with some of the most complex challenges we face is far from easy. However, it can be the most rewarding thing people ever do. I often talk to people who have been involved in a social value activity who relay the stories of what they did and the impact they had a long time after the event and often with real emotion.
In the early days of working in social value, there were only a few of us working in dedicated roles. Over time, numbers grew and awareness of the profession has subsequently started to grow, in relatively small circles (although I still hate being asked at parties ‘what job do you do?’). The Institute of Corporate Responsibility and Sustainability (ICRS) was established in 2014 providing a place for people working in sustainability, including social sustainability roles to be recognised as professionals in the field.
Working in sustainability and social value can be lonely, often with only one person in the organisation in the role and with that person sometimes not being part of a team, but rather crossing over into different parts of the organisation.
The ICRS has provided a much-needed forum to bring people together from different sectors to share experiences and tackle problems together. A corporate responsibility and sustainability apprenticeship has started in recent years allowing the profession to start to grow. Many young peoples’ values align with the principles of social value, so I feel confident that as awareness of the profession grows, the apprenticeship and other similar roles will become popular.
This feels like a significant step towards organisations really starting to embed social value, although it will take time for the younger generation to work their way through their careers and play their part in fundamentally reforming the way value is considered in the world. Those already in the industry need to lay down the path for those yet to join, to show that the sector can be transformative in the way it operates, taking responsibility to change the way we do business to benefit people and planet.
Penny Anderson, Head of Social Impact, Akerlof
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1 https://socialvalueuk.org/what-is-social-value/the-principles-of-social-value/
2 https://constructioninnovationhub.org.uk/value-toolkit/