Social Value may sound like the latest bit of corporate sustainability jargon, but this is a topic that is shooting up the agenda in the property sector and has the potential to drive a step change in the quality of development in our rapidly evolving cities.
The background context is complex. We live in turbulent, volatile and unpredictable times. Our politics is in crisis. There are unprecedented environmental challenges and risks. The labour market is changing. This is the landscape that any business needs to navigate if it is to endure for the long term.
One of the starkest challenges business faces, is its relationship with society. Edelman, who release an annual ‘trust barometer’ said last year we are “mired in a stagnant state of distrust” – in terms of consumer relationships with business, government and even large charities. There is a growing trend for consumers to demand purpose-led business. 86% of millennials think that business success should be measured in terms beyond just financial performance. This is reflected in Deloitte’s most recent annual global survey of 11,000 business leaders, which revealed that 65% of CEOs rated “inclusive growth” as a top-three strategic concern.
It is perhaps no surprise then, that we’ve seen an explosion of interest in Social Value in the property sector. And this interest is frankly much-needed. According to the Joseph Rowntree Foundation, over 20% of UK households live in poverty. Just this month, figures released showed that in places like Leicester over 40% of children are growing up in poverty. Almost every other child. These are figures that would have shocked Joseph Rowntree himself in the 19th Century. Meanwhile poor air quality contributes to 40,000 deaths per year in the UK, and a quarter of adults have suffered mental illness.
The built environment cannot cure all of society’s ills. But it does play a crucial enabling role. After all that is surely, fundamentally the purpose of the built environment. Creating places and spaces for people to thrive - living, working, spending leisure time.
For many, the Social Value Act provided an entry point on this topic. The Act was designed to empower the public sector to seek additional societal benefits from procurement.
But our appreciation, definition and use of the concept of social value has grown considerably. The way we at UKGBC look at it is to take a really broad view. Working collaboratively with a range of stakeholders including Avison Young, we have created a really high level framework of social value outcomes. We think that Social Value in the development process is the benefit felt by people – residents, local businesses, wider communities and cities – from any type of intervention or action at any point in the building lifecycle – including, crucially, in operation.
It could be the benefits felt by communities of a high quality natural environment and amenity space in terms of health & wellbeing, or resilient green infrastructure that is adaptable to future flood risk, or lower energy bills from better thermal performance of homes and workplaces. Perhaps above all it’s about putting people and communities at the heart of the development and operation of the built environment.
One of the most challenging, yet exciting aspects of this agenda is the theory that we will generate more social value the more we engage in processes of co-design and co-stewardship with the communities in which we are operating.
For businesses in the built environment, wherever they sit in the value chain, being able to demonstrate and quantify social value is increasingly important. It helps differentiate from competitors and advocate whole life value over short term costs; it can offer solutions to policy makers – particularly ambitious city leaders, who are looking for smart ways to reduce public expenditure on health & social care, and looking to drive maximum benefit for communities from development and regeneration; and fundamentally it could and should help make the business case for high quality, sustainable development. In this sense it’s about creating shared value – for people, for business.
We are still near the start of this journey. There is lots of work to do as an industry, and in collaboration with government – local and national. This includes amassing better evidence and better articulating the business case for prioritising social value; exploring the opportunities to use policy as a greater driver for social value outcomes; and tackling some of the confusion around measuring social value.
I think this is the start of something exciting. I look forward to working with our partners going forwards to drive real change.