If you’ve been following trends in public procurement, sustainability, or responsible business, you’ve probably heard the term ‘Social Value’ thrown around.
But what does Social Value actually mean? Why does it matter? And most importantly, how do you start creating it?
In this guide we’re breaking it all down – starting with a clear Social Value definition, a brief history lesson, and then some real-world Social Value examples to help your business get started.
Whether you're just getting started or looking to dig deeper, it’s all here.
Table of contents
- What is Social Value?
- Why does Social Value matter?
- How is Social Value measured?
- Why measure Social Value?
- Getting started with Social Value
- How to create Social Value: Examples to inspire
- Taking Social Value to the next level
💡 Learn more: For even more detail, download our Social Value 101 guide
What is Social Value?
In simple terms, Social Value all about the positive impact an organisation has on society beyond its financial bottom line. While profit is tracked in traditional accounting terms, Social Value is measured by the actions an organisation takes to improve the world around it.
Chances are, you’re already contributing Social Value, potentially without even realising it. Ask yourself, do you do any of these?
- Practice sustainable procurement?
- Offer training and apprenticeships?
- Focus on buying and hiring locally?
- Work on reducing carbon emissions?
- Encourage volunteering in the community?
If you answered yes, congratulations – you’re already creating Social Value!
Why does Social Value matter?
First and foremost, Social Value matters because it’s the right thing to do. If you can conduct business in a way that makes the world a better place, why wouldn’t you?
But beyond that, there are real incentives – and risks – that make Social Value worth your attention.
Social Value legislation
While the concept of has been around for decades, it gained real momentum with the introduction of the Public Services (Social Value) Act in 2012. The Act requires public sector buyers to ‘consider’ the wider economic, environmental, and social impacts of bids from potential suppliers.
This essentially created a triangle of considerations for evaluating bids: cost, quality, and Social Value.
However, legislation has evolved significantly since the Social Value Act.
PPN 06/20 and the Social Value Model
In June 2020, the UK government introduced Procurement Policy Note 06/20 and the UK Social Value Model. These guidelines built Social Value into the procurement processes of all central government departments, as well as their executive agencies and non-departmental public bodies.
Next came:
- PPN 05/21: This clarified that authorities need policies, processes, and skills in place to secure value for money and Social Value.
- PPN 06/21: This upped the ante by requiring major government contract bidders to commit to Net Zero by 2050 and publish Carbon Reduction Plans.
💡 Learn more: How to win work under the Social Value Model
The Procurement Act
Next up, the Procurement Act 2023 promises to put even more focus on transparency and outcome reporting in public procurement – including Social Value.
It’s also moving focus from the ‘Most Economically Advantageous Tender’ to the ‘Most Advantageous Tender’, giving buyers the power to look beyond cost and consider broader public benefit.
Yet in 2024 the government pushed back the Procurement Act to February 2025, specifically because it “does meet the challenge of applying the full potential of public procurement to deliver value for money, economic growth, and social value”.
So, an even more Social Value-focused Procurement Act is likely around the corner.
💡 Learn more: How the Procurement Act will unlock Social Value across the supply chain
The Corporate Sustainability Reporting Directive
Meanwhile, over in the EU, the Corporate Sustainability Reporting Directive (pinned by the European Sustainability Reporting Standards, ESRS) has introduced new requirements for impact reporting which closely align to Social Value.
💡 Learn more: What CSRD means for businesses – and for Social Value
With legislative demands growing, it’s clear that Social Value isn’t just a trend – it’s becoming an essential part of how business is done.
Social Value for public sector: Maximising your procurement budget
But committing to Social Value isn’t just about meeting regulatory requirements – it’s about unlocking extra value for both the public and businesses.
Research shows that public sector contracts with built-in Social Value generate an average of 20% more value per contract, without increasing costs. This means Social Value not only benefits society but also maximises the "public pound" – providing better outcomes for the same investment.
Here’s Richard Carroll, Chief Procurement Officer at Durham County Council, explaining why Social Value plays such a crucial role in the procurement process:
💡 Buyer Toolkit: Power up your procurement with Social Value
Social Value for bidders: Winning public sector contracts
For businesses aiming to win public sector contracts, having a strong Social Value strategy is no longer optional—it’s a key competitive advantage. Data shows that bidders who win the Social Value portion of the tender are twice as likely to win the overall bid.
Social Value also allows businesses to remain competitive while maintaining their margins – even when their prices are higher than their competitors’.
Give our video, "A Tale of Three Bids" to see how Social Value can make the difference:
💡 Bidder Toolkit: Win more bids
Building your brand and reputation with Social Value
Finally, Social Value serves as a powerful tool for businesses looking to build a stronger and more successful brand.
Purpose-driven companies are more attractive to potential employees. According to Harvard Business Review, 70% of workers wouldn’t consider joining a company without a clear sense of purpose.
Consumers also strongly favour purpose-driven companies – in fact, they are four times more likely to buy from purpose-driven companies (Zeno Group).
Attracting sustainability-minded investors
And when it comes to attracting new investors, Social Value can provide a critical edge. Recent research has found that over 77% of investors are interested in sustainable investing, and 54% expect to increase their sustainable investing activities over the next 12 months.
How is Social Value measured?
After the Social Value Act was introduced, buyers encountered a new challenge: while cost and quality could be evaluated, but how do you measure positive impact on a community?
This gap was filled by the Social Value TOM System™, now the leading standard for measuring Social Value, adopted by both government and business. Developed in collaboration with 40 organisations across the public, private, and third sector, the TOM System provides a robust and standardised approach to measuring positive impact. It’s made up of:
- Themes: The area of Social Value you want to address
- Outcomes: The positive change you want to create
- Measures: The specific actions you will take
And it’s structured around four key Themes:
- Work: Providing opportunities
- Economy: Driving inclusive growth
- Community: Empowering communities
- Planet: Environmental stewardship
The TOM System measures Social Value in two ways: with units, and with financial proxy values.
The ‘units’ measure the quantity of each activity (such as weeks of volunteering or tonnes of CO2 emissions reduced).
The ‘financial proxy value’ assigns a monetary figure to each action, creating a ‘Social Value £’ – calculated using authoritative national data sources like the Office of National Statistics, HM Treasury's Green Book, and the Unit Cost Database.
Why measure Social Value?
Measuring Social Value in monetary terms provides a clear way to track and understand the scale of your impact over time.
For example, if £20,000 of Social Value is delivered on a £100,000 contract, the supplier can highlight a 20% ‘Social Value-add’.
One area that often causes confusion is the central government's Social Value Model, which offers guidance for in-scope organisations on which Social Value outcomes to prioritise during procurement.
While the Social Value Model doesn’t require you to translate outcomes into a financial equivalent, using monetary metrics is definitely still advisable. It will enhance supplier bids, sharpen the buyer’s impact strategy, and help to track progress.
The good news is that the TOM System is totally aligned to the Social Value Model so that buyers and suppliers alike can get a quantitative and qualitative view of Social Value.
Here's our Chief Strategy Officer Nathan Goode to explain:
Getting started with Social Value
Starting your Social Value journey can feel overwhelming. Who will take ownership of it within your organisation? How do you get buy-in at different levels? And where do you start?
Here are a few tips to help you get started with Social Value.
Make sure your organisation understands Social Value
If you've made it this far, you’ve got a clear understanding of why Social Value is so important.
But for your organisation to truly harness its potential, everyone needs to be on the same page. Even if your team gets the big picture, do they know how to integrate Social Value into their specific roles and functions?
Social Value has the power to transform entire organisations, yet it's often seen as something intangible or vague, rather than a measurable, strategic contributor to success. This challenge is made worse by the fact that most organisations lack formal Social Value training.
As a result, teams like HR, procurement, marketing, and leadership often have different interpretations of what Social Value really means.
However, when there’s alignment across departments, Social Value becomes a shared language with the power to drive real change throughout the business.
💡 Equip your team with Social Value expertise with the Social Value Academy
Understand local needs
As our CEO Guy Battle often says, “the greatest value is delivered where there exists the greatest need”.
He’s right: Social Value is all about addressing the needs of the community. That’s why the first step is to develop solid knowledge of local needs.
This can most effectively be accomplished with a ‘Local Needs Analysis’ – a thorough piece of research rooted in credible data that tells you what the community’s biggest challenges are.
💡 Deep dive: Local Needs Analysis: Creating targeted Social Value impact
Build a Social Value strategy
Once you’ve identified the local needs you’re responding to, the next step is to create a Social Value strategy.
This strategy should outline your priorities, the impact you aim to achieve, and a clear roadmap to get there. It’s essential to secure support from all levels of your organisation, especially leadership, for a successful implementation.
However, strategic initiatives are hard to pull off. We’ve nailed down four reasons why Social Value strategies often fail – and how to make sure you don’t fall at these hurdles. Read more on this below.
💡 Deep dive: How to create a Social Value strategy for YOUR organisation
How to create Social Value: Examples to inspire
If you’re wondering how all this plays out in real-world scenarios, don’t worry. It’s time to get into some examples of Social Value in action, from business to local authorities and real estate developers.
Social Value for businesses
With investor interest, public sector contracts, and consumer trust all on the line, Social Value is becoming a major strategic lever for businesses. Let’s look at the approach taken by two prominent companies.
Equans
Equans, a leader in facilities management and energy services, has made Social Value a key part of its business strategy through its IMPACT manifesto.
The company focuses on empowering communities and achieving net-zero emissions. In 2022, Equans delivered:
- 13,647 weeks of apprenticeships
- 12,992 hours of career support sessions
- £382,026 invested in local community projects
- 743 hours of work experience
These efforts created over £56 million of Social Value, as measured by the Social Value TOM System.
Lyreco
Lyreco, a global distributor of office supplies, has focused on employing local talent and working with UK-based suppliers, along with various other initiatives.
In 2022 alone, Lyreco generated £79 million in Social Value, showing how operational decisions can positively impact communities.
Social Value in Procurement
Local authorities across the country are leveraging Social Value in procurement to stretch their budgets and benefit communities. Here’s the approach taken by two councils:
Rotherham Metropolitan Borough Council
Since adopting its Social Value policy in 2019, Rotherham Council has increased local spending by 72%. In addition, the council has secured £27.8 million in Social Value commitments from suppliers, which include:
- 19 full-time jobs for long-term unemployed residents
- £135,000 in donations to local community groups
Harwich Haven Authority
In 2023, Harwich Haven Authority delivered £4.3 million in Social Value while spending £1.2 million with local businesses. The authority has used many routine procurement operations to generate huge positive impact.
For instance, through its channel dredging contract with Boskalis Westminster, the two organisations co-funded the Coastal Discoveries initiative, offering biodiversity and maritime workshops to local school children.
Social Value in Real Estate and Construction
The construction and real estate sectors have become leaders in Social Value creation, with rapid growth in the delivery of positive community impact. Let’s explore a couple of examples:
Landsec
Landsec’s 55 Old Broad Street development began with a thorough Local Needs Analysis to identify the community's key priorities. The business used these insights to set Social Value targets across each phase of the project.
Over a 13.5-year lifecycle, including construction and occupation, this project is expected to generate £598 million in Social Value—277% of the total construction costs.
Unibail-Rodamco-Westfield (URW)
URW has transformed its flagship sites, Westfield London and Westfield Stratford City, into Social Value hubs.
In 2022, Westfield London generated £12.9 million in Social Value through local jobs, apprenticeships, and community support.
Meanwhile, Westfield Stratford City contributed £9.7 million in Social Value, delivering increased wages and internships for locals.
Social Value in Planning Policy
Social Value is embedded in public procurement – but planning policy is the next frontier. Local authorities like Salford and Southampton are leading the way:
Salford City Council
As of January 2023, Salford City Council requires all major developments to submit a Social Value strategy during the planning phase, as outlined in Policy F2 of its Local Plan.
The council provides a detailed Guidance Note and resources to help developers enhance their Social Value submissions.
Southampton City Council
Southampton City Council has also integrated Social Value into its planning process by requiring developers to submit a Social Value statement and offering early guidance on the city’s Social Value priorities.
Taking Social Value to the next level
As pioneers of the Social Value movement and creators of the leading measurement standard, we have guided thousands of public and private organisations to maximise and prove their impact.
Wherever you are on your journey, we have the expertise, experience and tools to help you meet ambitious goals. Get in touch to find out more.
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