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Companies are all about the bottom line, right? That might have been the case once, but things are changing. There’s a growing consensus that flourishing societies and happy people are vital for successful and sustainable business.
Legislation, investment, and finance are changing to encourage both the private and public sector to take a broader view, for the benefit of everyone.
Keep reading to learn why considering social value is more important for your business than ever.
What is social value?
Social value is an umbrella term describing the overall value an organisation adds to people’s lives in society, including the lives of its employees. It can be split into five categories:
- Jobs: helping people upskill and gain employment
- Growth: supporting local businesses to grow
- Social: fostering healthier communities
- Environment: promoting cleaner and greener spaces and encouraging sustainable business practices
- Innovation: supporting social innovation
The increasing focus on social value is pushing businesses to think beyond profit and return on investment and consider how they affect communities and the environment.
Social value and business
Making a difference sounds nice, but expensive and difficult to implement. Can considering social value really benefit your business? To understand how, you need to think beyond your bottom-line.
No man is an island and the same applies to businesses. Companies are part of society and cannot exist without it, so what benefits society also benefits them.
Communities that are struggling with skills, employment, wellbeing, and their environment are less likely to take up jobs, have disposable income to spend, and be healthy and productive. Which makes it more difficult for businesses to fill vacancies and gain profit.
Telefónica’s efforts to assist older people with new technologies, shows how adding social value can be good for business. It collaborated with associations for the elderly and taught them to do things like communicate with grandchildren living abroad. In doing so, Telefónica improved people’s lives by allowing them to access modern services while building a profitable customer base in an underpenetrated market.
Business leaders are recognising that factoring social value into strategies can make companies more sustainable and profitable in the long term.
Gain contracts
If you don’t take social value seriously, you might lose out on public sector contracts. Legislative changes mean that the public sector must ensure that their suppliers add social value.
The 2012 Public Services (Social Value) Act requires public sector organisations to factor social value into service contracts and contracts where there is a service element. And since January 2021, all public sector organisations and their suppliers must consider how commissioned services will affect the economic, social, and environmental health of an area.
This is especially true for larger contracts. Simply put, failing to account for how your business affects society can cost you serious money and opportunities.
Attract investment
The increasing focus on social value is affecting investment. More and more investors and executives recognise that a commitment to social and environmental issues helps to safeguard the long-term success of businesses. Investors are increasingly viewing environmental, social and governance programs as a proxy for management effectiveness. Socially and environmentally sustainable investment now tops $30 trillion which is 68% more than in 2014, according to the Global Sustainable Investment Alliance.
There’s also an increasing focus on the environment as part of social value. The UK government is developing the UK Green Taxonomy, which lists environmentally sustainable economic activities. Helping to ensure transparency and accountability so that investors and consumers can make informed decisions.
Win over consumers
Adding social value can boost your brand image and profits. 50% of consumers in Accenture Strategy’s 2018 Global Consumer Pulse survey, stated that they’re attracted to brands that stand up for societal and cultural issues, and support social and charitable causes. Similarly, the 2020 Zeno Strength of Purpose Study 2020 Zeno Strength of Purpose Study found that shoppers are 4x more likely to purchase from value-driven companies and 4.5x more likely to recommend them to their family and friends.
So, it pays to look at the bigger picture and factor social value into your corporate strategy.
Happier workers
It’s not just consumers, who are becoming increasingly conscious of social and environmental issues. People prefer to work for companies that align with their ideals. So, considering social value can help you retain employees and attract top talent, reducing turnover and recruitment costs.
Another benefit is greater staff satisfaction and productivity. Almost half of workers, in Deloitte's 2020 Global Human Capital Trends survey, said that working for an organisation with similar values contributed the most to feelings of belonging. When employees work for organisations with similar values they feel less lonely, increasing productivity.
Your workers must want to make a difference and you need to make a genuine commitment to social value. Creating shared values and incorporating social value considerations throughout your processes is key, to be more attractive to workers and to boost staff satisfaction.
Next steps
Focusing on social value benefits both companies and society, improving people’s lives while enhancing profitability. So, we’ve created an accessible expense management system that allows you to make a difference by boosting worker engagement.
For ideas on how to make positive changes, check out our free sustainable spend management guide.
Accountabl saves you money on expenses with complete visibility, built-in spend controls, and eliminates reimbursements. It also tracks CO2e, making it easy for workers to visualise their impact, and act to reduce emissions.
Try it today with a 30-day free trial, and start your responsible business journey.
