The pressure is on business leaders to state social purpose - and prove it.
The UN Sustainable Development Goals provided added incentive to tell the world what you are fixing in the world to support humankind. The Edelman Research Barometer reports that 71 percent of employees believe it’s critically important for “my CEO” to respond to challenging times. More than three-quarters (76 percent) of the general population concur - they say they want CEOs to take the lead on change instead of waiting for government to impose it.
The COVID-19 pandemic has led to corporates deploying resources in different ways - whether people, products, services or finance - to serve society. This will need justifying to those who provide the finance to businesses at some point. Economic values will be lower, and Social Value will be one of the most important proof points and numbers for any business in the coming months.
How will this be quantified? And, as a corporate, how do you prove that you are positively impacting real peoples lives as a business? Financial results and simple economics just do not do the job anymore
If money is simply the source of energy and permission for businesses to to do the good stuff they do, then moving to a more equal financial system, that measures economic environmental and Social Value in a common currency, has to be the way forward.
At its heart, the measurement of Social Value looks to quantify the burden shift between individuals, government, and the private sector for any given business decision. In a world where business is being held to account on delivering a social purpose, providing this purpose requires a new approach.
Any product or service or investment provided by a company has a human being eventually at the end of the chain of action. Applying a Social Value approach to these situations provides a way of working out the net impact upon their lives.
So, how have leading companies deployed Social Value as part of their decision-making? Here are some examples from clients at Social Value Portal:
Social Value can help intangible, service-based businesses to become visible and tangible.
This means quantifying how the customer's life is better because the business has alleviated a responsibility that the customer ordinarily would have to shoulder - or even that the state would have to provide as a financial safety net.
Our work with lifetime mortgage providers, for instance, has shown that keeping customers in their homes and communities for longer creates a great deal of Social Value.
It’s getting harder to deliver economic returns. So, why not add social returns to what you report back to your investors?
If you are in the business of managing assets such as shopping centres, Social Value can help you to serve the customer and community better around the shopping centre, which ultimately encourages customers to shop more at your shopping centre, and makes void rates on your rents lower.
Showing the end investor the total value of an asset, the annual economic return, and the annual social return, has become a reality on fund fact sheets. We now help clients to report their impact in line with their selected UNSDG impact areas.
Businesses impact places, whether it’s through employment or through physical development. Social Value creates a common language between local communities and stakeholders to work with your business. Some businesses will invest in new communities; some will withdraw from communities. Understanding the transfer of Social Value will be essential to decision making and action taken in both these situations.
If you are a housing developer, you will already have to factor in Social Value as part of the planning and tendering process. Our clients are now moving way beyond that, however, through a very visible Social Value Charter between their businesses and the community, committing long-term to placemaking, and moving away from a short term approach to communities.
And if you are planning to move your business from one part of a region to another, or one country to another, Social Value methodologies enable you to quantify the impact on the community that you are leaving behind, or the impact you have on a new place of operation. This enables sensible and realistic conversations with impacted communities and local authorities.
Whatever your business is up to, Social Value helps make better decisions.
Measuring Social Value is part of decision-making in a modern company. It provides a common currency, a common language and enhances the economic impact of a business.
But what’s next?
Imagine the annual company results meeting with its owners. Your CEO and team stand up and deliver the economic impact, financial return, and social impact, all in one simple results statement for the previous year of trading.
This future is close, and would certainly impact trust in business from society and employees of businesses. To get there, Social Value needs embedding into the products, services, and investments made by the business - bottom up. You need to know your numbers.
So, why not start your Social Value journey with Social Value Portal today?