Embedding and demonstrating social value delivers commercial, as well as social, benefits:
Since the government introduced the Social Value Act in 2013, mandating for public sector procurement to consider the social value of a contract, alongside the economic and environmental value, it’s become a sound investment for businesses to develop their social credentials to win tenders and contracts. And social value considerations are often included in the criteria of private tenders too – accounting for anywhere from 5-25% of weighting – extending the practice beyond the public sector to all major procurements. This allows commissioners to gain maximum value from a project rather than simply seeking the lowest price.
So what is social value? There are differing definitions but it is commonly held to cover creating additional value from commercial contracts through employment, environmental impact, supply chain sustainability or community support. These are what tenders and contracts are looking for on top of developing new infrastructure, public buildings or private housing and workplaces.
Of course, many businesses had been supporting communities long before it was given a title and mandated. From construction contractors donating their teams or resources to refurbish local buildings or creating employment opportunities, to smaller suppliers fundraising for grassroots charities, this form of community work is nothing new. The difference now is in how it is measured and embedded – and rewarded.
Embedding social value
For social value principles to be sustainable, the winning approach is to embed them in day-to-day business practice, rather than as an occasional ‘extra’ to operations. For example, through procurement, recruitment or ongoing best practice employment.
Socially-minded procurement could be through the sourcing of materials, equipment or support services. In practice this could be ensuring construction materials are sustainably sourced, purchasing supplies such office equipment from suppliers within a close radius to your offices, or outsourcing services such as waste management through social enterprises or socially-focussed businesses.
Similarly, socially-minded recruitment could be through training and employment schemes partnered with social enterprises, creating opportunities for disadvantaged young people. Additionally, simply reviewing recruitment practices which may disadvantage marginalised groups demonstrates ongoing commitment to corporate social responsibility. An example of this is the Ban The Box campaign being taken up by many employers, which promotes fair chance recruitment for individuals with a criminal record.
Demonstrating social value
Once social value practices have been developed and embedded, measuring and demonstrating them is key if they are to be of value in the tendering process. The most common framework for this is social return on investment (SROI). However, as there is still no common definition of social value and not all businesses account for it in the same way, comparing ‘apples with apples’ can be challenging for those assessing tenders, so this remains an area of development.
In a bid to overcome this, the Considerate Constructors Scheme has created a resource to support contractors in the construction industry to demonstrate their achievements. Its Building Social Value resource allows contractors and clients to evaluate and report on how projects or developments have created social value.
At Elland Steel we’ve embedded social value practices across our environmental, employment and procurement practices.
As one of the first steelwork contractors to sign up to the Steel Construction Sustainability Charter, and as leading members of the BCSA, we are committed to delivering and championing operations which are sustainable, including sourcing all timber from FSC compliant suppliers and deploying all-electric plant on certain developments, to reduce on-site emissions. Working in this way has allowed us to reduce our carbon footprint by 5% year-on-year and our production energy consumption by 4.5% year-on-year, since 2012.
By procuring products and services with community benefits in mind, we now work with a largely local supply chain, with 65% of our suppliers operating within 50 miles of our head offices and 40% of our sub-contractors based within a 30-mile radius.
We support our team to continue their professional development, funding professional qualifications and facilitating industry training days. We have also developed a number of routes into our business, ensuring opportunities are accessible for all. Working with nearby universities we offer placements and deliver lectures to students and also recruit through apprenticeship and training programmes. In our current team, 10 have come through these programmes, reaching senior, managerial and director positions.
As this demonstrates, an organisation doesn’t have to be a social enterprise or charity to be socially or charitably minded. By being a conscientious contractor, embedding good practice that benefits communities beyond just core stakeholders and choosing supply-chain partners who share those same values, a business can add ongoing social value to developments.