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Understanding social value: a framework for positive change

In a world increasingly driven by metrics and impact, understanding and quantifying social value is crucial. It’s not just about measuring what you do, but also about making informed decisions to improve the lives of people and communities. In this blog, we will delve into the concept of social value, its principles, and its significance in creating a better world.

The purpose of social value and impact management

At its core, social value and impact management serve several essential purposes;

  • Reporting performance: It helps organisations report their performance to stakeholders, which is often a requirement for various activities and procurement processes.
  • Measuring positive impacts: It provides a framework to measure the positive impacts an organisation makes, enabling the increase of positive outcomes and the reduction of negative ones.
  • Improving impacts: Beyond measurement, it encourages organisations to make informed decisions aimed at enhancing their impact, going beyond merely tracking the numbers.

What is social value?

Social value is the relative worth or importance that people and communities place on changes to their well-being. It encompasses not only the intended objectives of an activity but also unintended positive and negative consequences. To understand social value, we can turn to eight fundamental principles:

Principle 1: involve stakeholders

It’s crucial for you to involve those who will experience changes as a result of your activity. Stakeholders’ perspectives shape what gets measured and valued in social value activity.

Principle 2: understand what changes

Recognise positive and negative changes. These changes, whether intended or unintended, are the outcomes of your activity, made possible by the contributions of stakeholders. Measuring the outcomes will provide you with evidence that the change has taken place.

Principle 3: value the things that matter

Recognise stakeholders’ value by allocating resources between different choices. An effective way of influencing decisions is to compare value with the cost of the activity.

Principle 4: only include what is material

Decide what information and evidence must be included in the accounts to give a true and fair picture, enabling stakeholders to make reasonable conclusions about impact.

Principle 5: do not overclaim

By only claiming the value that activities are responsible for creating, you will help other people or organisations to contribute positively, avoid negative outcomes, and promote a collaborative approach to achieving outcomes.

Principle 6: be transparent

Your analysis will be more credible when the reasons for the decisions are transparent. By explaining and documenting each decision, you provide insight into how the activity will change as a result of the analysis.

Principle 7: verify the result

Independent assurance is crucial for objectivity and helps stakeholders assess whether or not decisions made by those responsible for the account are reasonable.

Principle 8: be responsive

This principle involves three types of decisions that can optimise social value: setting your goals in alignment with societal goals (such as the Well-being of Future Generations Act), choosing activities that best achieve your goals, and making operational improvements to existing activities.

Social value in action

Social value isn’t an abstract concept; it’s a powerful tool to address real-world challenges:

Reducing inequality: Social value can help identify opportunities to reduce inequality in communities by prioritising activities that create positive changes for marginalised groups. The UK Government’s own guidance aimed at tackling economic inequalities looks to strengthen the UK’s business landscape and begin to level the playing field and create more equality across the board, especially in deprived areas and high-growth industries struggling with skill gaps.

Reducing environmental harm: Organisations can use social value principles to build a narrative to show the importance of establishing a conversation around our environment and further build momentum by measuring and managing their impact on the environment. Social Value Portal’s Greenhouse Gas Calculator helps organisations of all sizes keep track of their emissions, and build a strategy to get to Net Zero.

Improving positives and reducing negatives: Social value analysis helps organisations enhance positive outcomes and mitigate negative consequences. No one intends to create negative impacts and until negative impacts are recognised, the pathway may not even seem logical. Social Value International have written an insightful blog about finding those negative impacts and offer some techniques that can help you start identifying unintended negative impacts in order to improve the positive impacts.

Integration into governance and strategies: By embedding social value principles into governance and strategies, organisations can ensure that every decision contributes to societal well-being. For example, Wales has taken significant steps in integrating social value into its legislative framework, particularly through the Well-being of Future Generations Act and the Social Services and Well-being Act. These acts emphasise the importance of involving people, co-producing services, and maximising well-being.

Impact questions for social value

To effectively measure and manage social value, organisations should ask a series of impact questions:

  1. What is the problem we are trying to solve?
  2. What is the solution to the problem?
  3. Who changes as a result of activities?
  4. How do they change?
  5. How do we measure the changes?
  6. How much of each change happened?
  7. How long will it last, and how long will we measure it?
  8. What is the relative importance of different changes?
  9. How much is caused by us?
  10. Which changes are important enough for us to manage?

Social value is not just about reporting numbers; it’s about making a meaningful impact. By adhering to its principles, organisations can create a better world, reduce inequality, minimise environmental harm, and continuously improve their contributions to society. Let’s make social value an integral part of everything we do, with a focus on constant improvement and positive returns on social investment.

This blog is based on learning from an event run by Eleri Lloyd from Social Value Cymru as part of the Shared Learning Network for PSBs within Project Dewi. This sub-network is designed to encourage, and support, people associated with Public Services Boards in Wales to share good practice and assist with each other’s challenges. Please get in touch if you would like to be involved: hello@copronet.wales.

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