Social Value forms a cornerstone of the Environmental, Social, and Governance (ESG) criteria,

a set of standards, through which investors and the wider public can better understand the impact a company has on its employees, customers, and the communities in which it operates.

Our definitions of Social Value can often be as rich and diverse as the people putting stock in them but, at their core, they are perhaps best defined as a means of demonstrating ethics, integrity and promoting general social concern. At their best Social Value can act as a lens through which we can observe our impacts as companies to combat environmental concerns, enhance lives and improve the wider community.

Long before even launching X-Forces Enterprise, Social Value had been an integral part of my thinking and went on to become a foundational part of our business charter that has been maintained to this day. For us as a company we look at Social Value in the context of five main pillars: People, Profit, Partnership, Purpose, and the Planet.

Now, nearly 10 years since our launch, we are seeing more and more people fall in love with the planet and recognising the role we all play in the sustainability of the fragile eco-systems that keep our planet alive. With the heightened prominence of conferences such as COP26 we are seeing changes in policy and, I hope, moving toward a lasting structure for combatting the environmental challenges of our time.

It’s been almost ten years since the Social Value Act, which requires public sector organisations to think about the social value that can be generated through buying services, came into force (January 2013).

To me, social value must have a cumulative effect on society. It is about weaving together a holistic view of the impact and positive difference a business has made to society as a whole, through both the systemic network effect, and also the impact on a defined set of individuals.

It’s also about context. As a principle, social value is at its most potent when it is complimented by storytelling, providing a narrative for impact. In other words, social value allows us to see beyond distinct events to give us a richer, deeper understanding of not just what happened to whom, but also why it happened and the possible long term impact beyond a set of current numbers.

Encompassing the idea of value, we can also think of social value as dynamic rather than fixed, constantly shifting depending on what society is valuing from one moment to the next.

It’s also about reducing complexity and, through good research, it can provide organisations with accessible, at-a-glance indications of the cause and effect of a set of activities. It is also about embracing complexity. Just as in a good book, the best stories aren’t necessarily the simplest and so it is with social value.

Every social organisation has a social value story to tell, and it is those who do so with imagination, passion and creativity who will be able to articulate to funders, stakeholders and clients their story in the most compelling ways.

My own vision with social value began in 2012 when I founded X-Forces Enterprise. Many of the big companies we work with, including Cisco, NatWest, and Sage, have helped us deliver specific outcomes with the armed forces community. In our case we can demonstrate that social value has been achieved by creating long-term partnerships between different sectors. NatWest though have 40 different ESG related initiatives across the business to drive change and adoption of the ESG criteria into every part of the bank.

Organisations that really achieve social value are clear on the difference they want to make locally, and their leaders articulate that vision, and I’ve been championing the notion that all public services should seek to leave communities stronger than they found them for some time.

Over the last eight years, the Social Value Act has opened some new doors and prompted some new conversations. The act may not be as strong in its language or requirements as some might have hoped for, but its status as legislation has undoubtedly changed the nature of some dialogues and created entirely new ones.

In 2018, the government amended the Social Value Act so that all large, central government contracts had to explicitly evaluate social value where appropriate, rather than just ‘consider it’.

In essence the amendment stipulates that contracts should be awarded, not just on the basis of value for money, but a company’s impact on social value. The change has helped enable more small businesses, charities, mutuals, co-operatives and social enterprises to win public contracts. It was a change of focus to long-term value rather than short-term costs.

The act has prompted genuine cross-sector working.

Private-sector organisations with a lot of public sector business have taken the act seriously, and investigated what good practice for them looks like, not just as a tick-box exercise but rather in terms of creating and measuring their social value. It has also prompted organisations not only to work with their public and social-sector colleagues, but to work with them on common issues, like reporting.

Landmarc which manages the Ministry of Defence’s training estate, is one such business. As a key environmental manager, rural employer and buyer, and community stakeholder, Landmarc looked at their work, and published ‘The Landmarc Difference’ which spoke of their total contribution in all terms including: economic, social, and environmental.

It signalled not only the way their business was heading, but where business was heading in general; and in commissioning a social enterprise to undertake the evaluation they demonstrated that the act prompted people to buy social.

Transformation continues to happen and the evidence is that commissioning for social value has been a smart way to improve society. There is still work to do, but we as a community have taken the right road towards change, and the act has shown that we are serious about building a more inclusive economy and developing more responsible businesses.

But what does all this mean to small businesses? How do small businesses ensure they are embracing ESG criteria and Social Value in particular? Are small businesses the embodiment of Social Value in the supply chain? They can be. I’d be interested to hear your view and how we all can make a difference!