Social Value Explained

Social value encompasses a broad range of factors, reflecting an organisation’s commitment to making a positive impact on society and the environment while also achieving economic goals. The components of Social Value:

 

  1. Environmental Value: This involves initiatives aimed at reducing environmental impact, promoting sustainability, and preserving natural resources. It includes efforts such as minimising carbon emissions, reducing waste generation, adopting renewable energy sources, and implementing eco-friendly practices throughout the supply chain. Also, contributing to environmental benefits through partnerships by supporting educational and grassroots initiatives to improve the local ecosystem, cleaner environment and wildlife conservation are ways to make an impact.

 

  1. Social Value: Social value initiatives focus on improving the well-being and quality of life of individuals and communities. This can include community engagement programs, charitable donations, volunteer initiatives, support for social causes (such as education, healthcare, and poverty alleviation), and efforts to promote diversity, equity, and inclusion within the organisation. This involves building relationships, understanding community needs and priorities, and collaborating with community members to address shared challenges and opportunities. Community engagement can take many forms, including partnerships with local organisations, participation in community events, and consultation processes for decision-making.

 

  1. Economic Value: Economic value refers to the financial benefits generated by the organisation’s activities. While the primary focus of Social Value is on non-financial outcomes, economic value is still important for sustaining operations and enabling growth. This can include job creation, fair wages and benefits for employees, economic development in local communities, and responsible financial practices. Partnerships with charities, social enterprises and community groups to enhance knowledge sharing, providing mentoring, training and supporting people to become ‘employment ready’ through holistic support programmes play an important role in lifting local economies and alleviating poverty.

 

  1. Sustainable Supply Chain Management: Ensuring that the organisation’s supply chain operates in a socially and environmentally responsible manner is essential for Social Value. This includes sourcing materials and products ethically, supporting fair labor practices, minimising environmental impact throughout the supply chain, and promoting transparency and accountability among suppliers. Encouraging and enabling charities, social enterprises, SMEs and start-ups to become part of the supply chain, will boost the local economy and create add-on-value.

 

By incorporating these components into their operations and strategies, organisations can demonstrate their commitment to Social Value and contribute to building a more sustainable and equitable society. This not only benefits society and the environment but also enhances the organisation’s reputation, attracts and retains talented employees, and fosters long-term business growth.

The Procurement Policy Note PPN 06/20 emphasises the importance of social value in winning public contracts and is an enhancement for Social Value Act 2012. The new Procurement Act, came to an effect February 2025, is enhancing the role of Social Value in Public Sector procurement even more. Here’s a breakdown of the key points for any Public Sector contractor to consider is social value planning and delivery:

 

Alignment with Contract Objectives
Ensure social value initiatives directly support the goals and priorities of the contract and commissioning authority (e.g. local employment, sustainability, community wellbeing).

Clear, Measurable Plans
Develop specific, time-bound, and measurable social value commitments. Avoid vague promises—public sector buyers expect clarity and accountability.

Local Impact
Tailor activities to benefit the local area—engage with local charities, social enterprises, or community groups for stronger relevance and outcomes.

Delivery Capacity & Partnerships
Demonstrate how you will deliver on commitments—whether through in-house teams or trusted delivery partners. Provide evidence of capability.

Ongoing Management & Monitoring
Set up systems to track progress, manage partnerships, and adjust plans as needed. Transparency and agility are key.

Evidence & Reporting
Be ready to show how outcomes are achieved with data, testimonials, or case studies. This is crucial for contract performance and future tenders.

Cost-Effectiveness
Maximise value without overburdening resources. Efficient coordination and leveraging existing community networks can reduce administrative costs.

 

 

 Overall, the emphasis on social value in public procurement highlights a shift towards more holistic and sustainable approaches to contracting. Companies that can effectively integrate social impact considerations into their business strategies will have a competitive edge in securing and delivering public contracts.

 

Learn more about UK social value policies in our dedicated Policy Guide, created by whatimpact to help organisations navigate public sector requirements with confidence  HERE

 

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