Success in business has traditionally been measured in financial terms. Despite this, and as a result of increased regulatory requirements, a global shift towards net-zero, and changing stakeholder expectations, companies must now look to deliver value beyond their bottom line. For customers, governments, employees, and investors, it is no longer enough for an organisation to focus solely on financial returns. They must now also consider their impact on society and the environment.

What is Social Value?

Social value considers the broader impact that a business’s operations have beyond financial gains. It considers how business activities impact people both inside and outside of the organisation.

In the public sector, the Social Value Act 2012, ensures that public service contracts consider how they can also secure wider social, economic and environmental benefits, not just economic returns. For example, employing long-term unemployed employees, improving community facilities.

The PPN 06/20, introduced in 2021, specifically targeting central government contracts, mandates that at least 10% of tender evaluation criteria be based on social value.

The upcoming CSRD expands the scope of reporting from the previous Non-Financial Reporting Directive (NFRD). The directive requires ‘double materiality’ meaning companies must report on how sustainability impacts them but also how their activities impact society and the environment. If you want to find out more about CSRD, you can download our e-book here.

Why is Social Value Important?

Competitive advantage: By considering social value you can differentiate yourself in the marketplace. Clients increasingly favour companies that demonstrate a commitment to positive social outcomes

Attracting and retaining talent: Companies that invest in social value projects are more attractive to prospective employees, as they signal a commitment to making a difference. This can lead to higher retention rates, increased employee engagement, and a more motivated workforce—factors that all contribute to a healthier bottom line.

Risk mitigation: From regulatory risks associated with environmental compliance to reputational risks in the wake of public scrutiny, companies that actively invest in social value are better prepared for future challenges. Implementing practices that benefit society, such as reducing carbon emissions or promoting diversity, equity, and inclusion (DEI), positions your business as a forward-thinking market leader.

How do I implement Social Value?

There are many ways businesses can contribute to creating social value:

To make it easy, SustainIQ have two pillars associated with Social Value, one looking internally and one looking externally.

Under our People Health & Diversity Pillar there are various ways you can implement social value internally. For example:

• Investing in professional development and looking after employee health and wellbeing through initiatives such as health and safety training, well being workshops or compliance training. While having a positive impact on your workforce this can also help attract new talent into your organisation and retain the skills and experience you already have.
• Developing opportunities for apprenticeships and work placements, helping to develop skills of younger members of society.
• Ensuring your company’s workforce is reflective of wider society by focusing on diversity and inclusion is also a way of enhancing social value.

Through our Community Engagement & Partnering Pillar you can implement ways to invest in social value externally to your business. For example:

• Investing in local community through donations, outreach, volunteering educational initiatives, partnerships and responsible leadership across different areas of the business.

Have a look at our case study on how our customer, JP Corry, used SustainIQ to track community investment in one their projects.

How do I measure the impact of my Social Value initiatives?

For measuring social value impact internally, you track metric such as:

• Track investment in all initiatives such as training and workshops
• Develop surveys for employees to give feedback on the initiatives you provide for them
• Set apprenticeship targets linked to client contracts and monitor progress in real time
• Record skills levels to aid succession planning and personal & professional development planning
• Track the diversity characteristics of your workforce

And to measure social value impact externally, you can track metrics such as:

• Track numbers of staff volunteering and hours volunteered
• Track money raised for charities
• Monitor hours of educational engagements

With GHG emissions or waste data it’s easy to normalise data to fully understand the impact of activities. However, it is more difficult to quantify the impact of social value activities. A lot of businesses will use national frameworks to calculate social value by assigning a proxy to quantify overall impact.

Why is this data important?

Having robust social value data is crucial for winning work and tenders, especially with the requirements set by the Social Value Act 2012 and PPN 06/20. These regulations mandate that public service contracts and central government contracts must demonstrate the social, economic, and environmental impact of their activities. By effectively showcasing your social value contributions, you can meet these criteria and enhance your competitive edge in the tendering process.

How can SustainIQ help?

SustainIQ enables you to input and track social value data across two key pillars: People Health & Diversity and Community Engagement & Partnering. This comprehensive tracking allows you to monitor progress towards your goals and calculate the social return on investment for your projects. SustainIQ can be used in conjunction with national frameworks to quantify the social value elements of your projects. The reporting dashboard provides a clear view of your progress and impact, making it easier to use this data for tenders and winning new work.

Learn More

SustainIQ is an integrated ESG reporting platform that unifies all aspects of an organisation’s sustainability activities within a single environment. Businesses use SustainIQ to measure, monitor, and report on their social, economic, and environmental performance in real time.

To learn more about SustainIQ or to arrange a demo click here.