What is social value and what does it tell us about sustainability?
As concepts such as sustainability and responsible business become more mainstream, there is now a growing movement shining the spotlight on the importance of social value. Unlike many other business measurement frameworks, social value is people-focused, so it affects everyone throughout society.
What is social value?
Put simply, social value is about wellbeing. It’s the value that we put on the way places, services and facilities affect our lives, for better or worse. Access to green spaces, for example, has high social value because it creates a lot of social benefits, such as scenic beauty and opportunities for fresh air and exercise, as well as benefits that might not be immediately obvious, such as mitigating air pollution, which is good for our health.
The concept of social value as a measurement tool originates from the work of the Roberts Development Fund (REDF) – the first venture philanthropy dedicated to investing in and supporting social enterprises – in the 1990s. It questioned why financial return was consistently prioritised over other forms of value linked to businesses activity (such as impacts on people and planet). Today, organisations such as Social Value International, which operates in more than 60 countries, is dedicated to ensuring businesses incorporate social value into their decision-making and take it just as seriously as financial profit.
Why should social value be important to me?
There are many reasons why citizens should care about social value. The most obvious one, of course, is that having access to good services and facilities can greatly enrich your quality of life.
But understanding the importance of social value can also help you to identify injustice or wrongdoing, which can in turn drive positive change. For example, the proposed closure of a community centre would result in the loss of a great deal of social value for an area. Being able to articulate this loss would be critical in campaigning against its closure.
As a consumer, you can also use social value to assess the behaviour of the companies you buy from. Are they contributing to social value, for example by investing in social programmes or environmental endeavours, or are they actively depleting social value, by investing in fossil fuels or adversely affecting local communities in their operations?
Social value is also an important consideration in employment – not just in what your company does overall, but in how they treat you and the knock-on impacts that has. For example, if your company offers flexible working and generous benefits, that will positively affect your wellbeing, enabling you to in turn contribute positively to other parts of society.
How is social value measured?
Quantifying social value relies on measurement and accounting frameworks that prioritise the social importance of places, services and facilities, and determines the willingness of people and organisations to pay for them, or to avoid them.
Crucially, though, social value can’t be assumed – it needs to represent the value of the people affected. This can vary tremendously, and can be very different from what decision-makers think it might be. As such, involving stakeholders in the measurement of social value is critical.
As for the exact metrics involved in measuring social value, this will depend on the impact being measured as well as related factors such as who is involved, benefits and consequences of the impact, timescales and so on. There are a number of different frameworks, often applicable to different situations. For example, platforms such as Loop and Impact have created tools to help organisations calculate their social impact, while Social Value UK has created a self-assessment tool to help organisations determine how well they’re measuring and reporting on their social value.
Charity shops: the value of giving backCharity shops are a great example of high social value. The UK Government carried out an SROI on charity shops throughout the UK and found that in 2022, they generated £73.5 billion of social value. This doesn’t cover things like environmental savings or benefits to the economy, but rather the positive values associated with them, such as the feeling of ‘giving back’ to others or the planet, having friendly encounters with shop workers, and the enjoyment of a unique shopping experience. Lots of different people interact with charity shops – staff, volunteers, customers, neighbours and donors – so the impact of this social value is far-reaching. |
How are organisations approaching social value?
Social value is relevant to any organisation that has an impact on people – which is all of them. There are many reasons why organisations are now paying closer attention to social value. Increasing regulation is a key driver, such as the UK’s Public Services (Social Value) Act. People also increasingly expect companies to do the right thing, which can impact their reputation and by extension, their success as a business.
There are examples of organisations prioritising social value in all sectors around the world. In New Zealand, for example, a social return on investment (SROI) analysis was conducted to understand the impact of food rescue on indigenous communities, while in Thailand, social value is being adopted by universities to demonstrate the value of their research. In Italy, where talent retention has been an issue post-COVID, corporations are using social valuation techniques to assess and enhance their employee benefits and wellbeing programmes for staff, their families and communities.
On a company-by-company basis, many are looking to maximise the social value of their operations by partnering with social enterprises or charities, and/or by enhancing workplace benefits for their staff. Many companies produce annual ESG (environmental, social, governance) reports, where they will include details of their efforts in this area.
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