What is social value and why is it key for business success?

Guy Battle, CEO, Social Value Portal

 

Today’s business landscape is being redefined by an explosion of demand – from government, investors and employees – for businesses to make a positive impact on society.

 

This has led to the rise of “social value”, a new UK-government-endorsed approach to measuring and reporting the additional benefit businesses create for communities and the environment.

 

Here’s why social value is the key to unlocking a multitude of outcomes – from faster business growth and better talent attraction to reputation boosts and investor interest.  

 

What is social value?

 

While it’s grown in prominence over the past decade, many are still unfamiliar with social value. Simply put, social value is a new currency of business: it describes the positive contributions organisations make to the environment, society and the economy – especially in response to defined local needs.

 

What sets social value apart from traditional corporate social responsibility, or even environmental, social and governance (ESG) reporting, is that it is integrated into the fundamental way a business operates.

 

It’s not just about ad hoc charitable activities or regulatory compliance. It’s about embedding value creation into all a business’s actions, from hiring and training employees to sourcing goods and services.

 

Why does social value matter for businesses?

 

Social value is more than a moral imperative; it’s a strategic one too. In fact, there are at least four key reasons why businesses that embrace social value are better positioned for success:

• Legislation: From the Social Value Act 2012 to Procurement Policy Note 06/20 to the Corporate Sustainability Reporting Directive, legislation mandates that public sector organisations in the UK must evaluate social value in their supplier selection.
• Talent attraction and retention: According to Harvard Business Review, 70 per cent of workers wouldn’t join a company that lacks a clear sense of purpose.
• Investor interest: The investment landscape is shifting, with 54 per cent expecting to increase their sustainable investment activities in the next year.
• Building brand trust: Social value gives businesses a powerful tool to communicate authentic commitment to making a positive difference – with crucial reputational benefits.

 

How the new government and Procurement Act will drive social value

 

The UK’s new Labour government made Social Value a key priority in its 2024 General Election commitments, promising to streamline public sector procurement and enforce greater transparency of social value delivery.

 

Labour’s plans include appointing a Social Value Policy Leader within the Cabinet Office and creating a Social Value Council to set standards and drive accountability. Its “five missions” also align closely to social value priorities.

 

This shift is being further reinforced by the new Procurement Act, which requires businesses to publicly report and validate delivery of key performance indicators – including social value. Under the new Procurement Act, if a business has not been able to deliver the social value it’s committed to, then that will become public.

 

“Under the new Procurement Act, if a business has not been able to deliver the social value it’s committed to, then that will become public.” – Guy Battle, CEO of Social Value Portal

 

How is social value measured?

 

One of the biggest challenges businesses face when it comes to social value is quantifying their contributions.

Social Value Portal has filled this gap with the Social Value TOM System™ (themes, outcomes, and measures), which lets businesses track their total contribution to society with a “Social Value £” based on government data. This can be reported to stakeholders and benchmarked against industry standards.

 

The TOM System™ is the most widely adopted social value measurement standard in local government and aligns fully to central government’s “Social Value Model” guidance.

 

Overcoming barriers to social value creation

 

The biggest challenge that businesses face when it comes to social value is building capacity to deliver and embedding social value creation into their operations.

 

At Social Value Portal, we help our customers do this with a five-step methodology:

• Understand local needs: After all, the greatest value is delivered where the most need is.
• Align business strategy: Ensuring initiatives are relevant to the business’s operations and community priorities.
• Build internal capacity: Social value must be a priority for the whole organisation.
• Set up a clear measurement framework: What you can measure, you can manage and build upon.
• Report progress: This is key to the credibility of a social value strategy – telling stakeholders and the community what you are achieving.

With rising accusations of greenwashing and “social washing”, third-party validation of social value delivery data is a critical to make sure that reporting is accurate and meaningful. That’s why Social Value Portal provides data validation to all our customers, with a dedicated data review team to ensure that whatever your organisation is reporting, it’s real and it’s audited.

 

“Our team validates your data to ensure that whatever your organisation is reporting, it’s real and it’s audited.” – Guy Battle, CEO, Social Value Portal

 

Social Value Portal’s impact

 

At Social Value Portal, we’ve made an ambitious pledge to deliver £100 billion of social value by 2026 with our customers. We’ve already delivered over £38 billion.

 

That’s a big number. But what really matters is the impact on human lives that it represents: 1,400 jobs for the long-term unemployed, 2.5 million tonnes of CO2 saved, 500,000 weeks of apprenticeships, and much more.

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Joining the social value movement

 

To learn more about how we can help you reap the rewards of social value, set up an introductory call with one of our experts at Social Value Portal.