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There is a new craze moving through sustainability teams. That craze is Social Value. It’s like the gold rush of the 19th Century. Ok, I admit, I greatly exaggerate. But observing the approach taken by procurers, corporate’s, service providers and NGOs is fascinating. Only instead of rushing for precious metals, there’s a rush for a perceived value that is generated from an elaborate spreadsheet.

A brief Catch-up

While Social Value came to notoriety in 2012 with the establishment of the Social Value Act, the regulation has made little impact. While generally well-intentioned, has lacked guidance, direction and proved somewhat confusing for all involved.

Occasional reappearances and drives progressing the Act have been made, but the tide truly turned for the masses in 2018. David Liddington provided a clear steer with his speech in June: “it is right that we use the government’s purchasing power to benefit society”. With this, the jockeying for position ramped up.

The Government has now released its consultation on its new approach to Social Value – it’s certainly an improvement. There is direction, and clarity. Read Acclaro’s account of the consultation. The short version is, more defined social value guidance for Central Government contracts, and a minimum weighting of 10% on contracts….

10%! – This now makes social value a competitive bid winner in a tender.

Current position – Measure my Social Value Now!

How do we measure Social Value seems to be the big question. Can we provide £800k in Social Value, or £1 million? Is this value larger than our competitors? Which tools should we use to calculate how much value we create? At Acclaro and the SFMI, we hear these questions frequently. We see a massive fixation on the numbers, and this is understandable, but not progressive.

But for a company to fixate on measuring their Social Value output without a fundamental approach to support the numbers means that risk awaits the unprepared. It is a dangerous tight rope to walk.
The Problem – Where Is The Substance To The Value?

With many trying to pull numbers from the sky using one of a multitude of tools, we are on the cusp of the new social version of greenwash. Social-wash (seems to fit). Tools are often based on what a company can provide in a theoretical sense.

X numbers of apprentices = £x’s of social Value.

But when a company bids, do they have the necessary narrative to back up their claims? In the short-term, it probably won’t matter. Companies will bid with their perceived Social Value number, and the highest will gain the points on the tender process.

But… what happens when a company is held account to that number? Can they be held to account through a contract if claimed that they can contribute £x million of social value? Probably, Yes. If not then it can be forgotten. Mobilisation of a contract will no doubt result in the 15 claimed apprentices turning to 5, or even zero. Also, will those apprentices be targeted groups of people that generate real value for the needs of the community? That will depend on the ethics and culture of the business making promises. I predict that the short term will become a period of Social Value without accountability. But things will change, and it will be the responsible business leaders that prosper.

Enter the True Leaders

There are real leaders in this space in the FM industry. The SFMI assesses FM companies annually. For example, in our annual assessment, we can state clearly that Vinci Facilities and Engie are ahead of the game on Social Value. There are others who are making progress as well because they see the long term value.

So now is the time for leaders to shine. Those companies who have a solid strategic base of social value embedded into their company culture will be able to provide their numbers alongside the important narrative that validates their claim. They can give past performance to instil confidence, and they can give systems and strategies on the way that Social Value is generated with their clients.

Acclaro’s Approach

It is for this reason, that Acclaro and the SFMI are measurement agnostic. We have developed the Acclaro Social Value Programme that is tailored to developing leadership in this space, and to give a meaningful substance to the numbers.

We are not about the numbers first. Numbers are the product at the end, but so many are seeing the numbers as the beginning and the endgame. We help a company to develop a structured approach to drive social value to truly benefit society based on the needs of the community. We follow a specified approach summarised below

The Acclaro Social Value wheel

The Acclaro Social Value wheel

Our approach is to base the numbers on a solid strategic foundation of generating Social Value at both the corporate and contractual level. If a bid contains a 15% weighting of social value, it is a natural progression to require validation of those numbers. Therefore in time, half of that 15% is the measured output number, and half will be the narrative, strategy and validation of those numbers.

This is where the Acclaro Social Value Programme is aimed at. In the Acclaro approach, we; assess, engage, define, execute and operate Social Value in a fit that is right for your company. You can be a company looking to create value for your clients, or you could be a client that is looking to generate social value from procurement. Our approach follows a similar approach with different detail. We build purpose driven leaders.

Acclaro helps you to plan for the long term and develop your approach to Social Value. We give you confidence in your numbers whether bidding for contracts, or procuring for services. Contact us to discuss further
Chris.havers@acclaro-advisory.com

Social Value – Where we were:

Almost 9 years since the Public Services (Social Value) Act was introduced it has become widely discussed, however, there are still issues in implementation. Despite a number of updates, the Act remained underutilised as procurement and procuring organisations were confused about its scope and application. Some viewed it as a replacement for CSR; some as additional.

The term “Social Value” steered many people away from its application in environmental improvements, though these too have social impacts. As industry and public bodies alike have been building knowledge bases on social value the understanding of its benefits has grown – along with knowledge of its complexity.

The Act so far has been adopted both in the public and private sectors. The UK Government has put out to consultation a new model for Social Value in Procurement. Although focused on government procurement, this model, as the initial Act, could be utilised across industries to inform social value approaches.

Acclaro’s opinion on the consultation:

The consultation out now proposes a “light touch” approach using a new model. It also provides high level and detailed guidance and links to relevant policy information that can support social value efforts. The model is split out into 5 high-level themes, 2 relating specifically to supply chains (Diverse Supply Chains; Safe Supply Chains), 2 involving staff (Skills and Employment; Inclusion, Mental Health and Well-being) and 1 on environmental sustainability. There are suggestions for each theme, in varying detail, of award criteria and measurement metrics to guide increased reporting. This would have a significant positive impact, encouraging accountability and long-term monitoring.

The additional detail will go a long way to expanding uptake of social value beyond large public sector projects as the concept becomes easier to understand, implement and report on. With the concept and practical application of social value still a maze to many the direction from government to other specific policy documents (including: Post-16 Skills Strategy; Integrated Communities Green Paper; Greening Government Commitments) and external guidance (e.g. Business in the Community’s Race at Work Charter) will prove a welcome new structure.

What’s still missing:

The mandatory 10% social value weighting in contract tenders is good – though not a new or ambitious strategy. Other larger weightings for social value have already been implemented within some tenders. Issues with current social value measurement systems – their inconsistency, lack of accountability, and corruptibility – mean this would need to include both numbers and discussion for credibility. However, this takes time that many public sector teams do not have. Thus over-reliance on untrustworthy figures alone is likely to continue.

Though environmental improvements are explicitly mentioned and categorised in the model they are limited compared with others. Some of the additional detail will be effective, however, the policy outcome of “environmental impacts are reduced” is unlikely to provide much guidance to those looking to implement. They will need to rely heavily on the 25 Year Environmental Plan – which does not use the terms “social value” or “social impact” once. The connection between environmental and social value remains undefined in this guidance.

Although under consultation and therefore liable to change, this document provides a major improvement in structure and guidance for everyone implementing social value. It will be important to keep monitoring and improving on the process as it is implemented and continue to update the system as the landscape changes.

We welcome discussion

We will be writing to necessary consortiums and bodies to provide our opinion and discuss further. If you are interested in discussing the consultation with us, please do get in contacts. Cara.kennelly@acclaro-advisory.com

Your Sustainability Shopping List

We are almost at the end January and there is already a growing list of activities and aspirations for the proactive Sustainability Manager in 2019. It’s now time to focus on the priorities of a Sustainability Manager.

If you are looking for inspiration, and want to freshen up the tired strategy from previous years, read on. Before reading Acclaro’s top 5 sustainability priorities, we should remind you that underpinning all of these areas is the need for good quality data to be captured and interpreted. Without which little can be achieved.

1. Developing a Social Value Approach

Globalisation offers many positives, but the drive for cheaper goods and services has affected not only, supply chains but also the communities that companies work within.

Social Value is currently measured on the value and impact of the corporate, rather than the benefit derived by the community. Some are scrambling to measure a monetary value. Assessing the benefits that supply chains can bring, or engaging with communities we operate within, is surely the first logical step.

We suggest, take a step back. The first stage is to understand what already takes place across the business coupled with assessing the needs of the community in which you operate, (or serve if you are a public-sector body). Capturing this information will help to develop a cohesive programme of engagement. This can be structurally managed across internal, supply chain and community programmes. There are many benefits to gain from a social value programme. This includes an increasing number of tenders requiring some form of disclosure of the value you create, so now is the time assess what your organisation can bring to society.

2. More accurate GHG Supply Chain Emissions

The reporting of greenhouse gases provides an ever-greater understanding of how our organisations impact climate change. However, when it comes to affecting change, it can be difficult to understand which areas of a business to target that will yield the most effective results. Carbon emissions from the supply chain is being increasingly scrutinised. Therefore, understanding these burdens and your ability to target them effectively is critical.

Using economic models based on annually updated economic data can map supply chains and associated emissions. The data from industrial Supply and Use tables is combined with emissions factors to create a model that maps national emissions linked with the spend of an organisation. This maps the entire organisations economy using matrix algebra to link environmental and economic data. Save yourself time and move away from the bottom up approach that sees us plot only a small proportion of supply chain emissions very inaccurately. There are other ways of doing it, and you can have a greater impact on climate targets by using correct data to being with.

3. Energy Audits and Reporting

Carbon emissions and energy consumption remain some of the biggest risks and contributors to climate change. The move towards nearly zero carbon buildings is accelerating with standards being developed as part of the wedges associated with science based targets.

The first stage should always be to minimise emissions and the energy being consumed through an effective understanding of how and why energy is used the way it is. Regulations are asking for public disclosure allowing for greater scrutiny and the need for verified and accurate information to be disclosed.

Significant quantities of information exist, but translating this into usable data and tangible outcomes from dynamic systems is the challenge – but can yield significant savings in excess of 15% energy reduction.

4. Environmental Risk Management

Whilst often initiated and implemented as part of management systems, the recent driver for climate and biodiversity related risk evaluation has come from the investor community. The premise is simple and equates to understanding the environment’s impact on you. These disclosures are targeted at mainstream investors and are intended to help them assess whether climate risk is appropriately priced in to their valuation of your company, enabling investors to make more informed decisions

Techniques and approaches for the scenario testing are still in development, but this year will see an increase in the understanding of the risks and early stages of validating the implications. Early movers will benefit from the opportunities available.

5. Building a Responsible Business Culture

Finally, this is the piece that joins the dots together. Business culture is changing and the expectations of new employees and our major consumers are dictating different terms – we now have a language of Purpose.

Responding to the societal pressures, the increased level of data, reporting pressures and investor requirements will necessitate a different response from organisations. And that culture needs to extend beyond the four walls of the sustainability team, into business and towards supplier management and sales programmes.

This is a long journey, that connects together forward risks, social benefits and environmental impacts, a develops a long-term strategy. Ultimately it will mainstream your role, but a concept we need to grapple with is, will it make it redundant? In time, perhaps some day-to-day operational parts. But there will always a need for strategic thinking and forward planning.

Acclaro Advisory wishes you a belated Happy New Year, and we hope to see you at many an event to discuss the direction you are taking for a sustainable future.

Good luck with putting  your priorities as a Sustainability Manager into action.

Materiality is prized across Social Value stakeholders, yet nowhere in the market does there exist an agreed upon method of testing this materiality. There are many working groups, I sit on one myself, that are trying to plug this gap but the truth is that it’s a tough nut to crack. Built environment industry leaders, Social Value experts, and all those in between are struggling to pull together a standard interpretation of Social Value, let alone a standard approach.

Partnerships Exist

Collaborations, such as that between VINCI Facilities and Social Value UK, are becoming more commonplace. These should be commended as the industry realises its need to contribute to the development of Social Value and the improvements they can offer the communities in which they work. However, such projects still occur at a relatively high level, requiring time and experience to gain maturity and so are the beginning of a long and complicated process.

Data Exists In Silos

Although some databases of knowledge exist (e.g. Social Value UK, Social Value Portal and Social Enterprise) there is still a fundamental lack of understanding around these datasets. Those directly involved in collecting the data may have some local and specific knowledge, but this is rarely shared outside of the project, let alone into the wider industry. Information silos are a well-known problem in all industries, and it is common knowledge that sharing learning is, more often than not, to the benefit of all. In the case of Social Value this is particularly true, because the enormous range of potential actions to improve Social Value on any given contract leaves more opportunity than usual to build strategies and activities that may already have been implemented elsewhere.

Variation And Innovation

That being said, there is also a significant amount of specificity required. Each contract is different, as is each location, and so every chance to implement Social Value will be different also. This should in no way preclude contractors. Variability on this scale is an opportunity for market leadership and innovation. When each situation is unique there are infinite ways to give back to the communities you work in, through employment, skills, business support, education, and countless other crucial ways. Ensuring engagement occurs effectively is even more crucial so that the activities undertaken are appropriate to the need of the community.

Be In It For The Long-Run

None of this negates the good work being done in the industry. I could showcase many great examples of Social Value implementation that I have seen myself, but they almost always happen in isolation. Constructing meaningful Social Value requires long term and cyclical thinking with frequent review and editing – as contracts and communities both grow and change, requiring different types of Social Value and different stages in their growth.

However, despite the vast amounts of opportunity there is little Social Value coherence in the market. What contracts need is practice – practice listening to stakeholders, practice identifying and understanding their options, practice implementing and evaluating these options, and practice sharing knowledge, experience and best practice.

It is odd, during the keynote speech at a social sustainability event, to hear the phrase “CSR [corporate social responsibility] is dead”, but so began the FM Leader’s Forum on Social Value. It’s a valid point of view – the system has been modified and corrupted and abused to the point that CSR is now an almost meaningless term, aligned more with marketing. The original intention behind CSR was noble, but the outcomes less so. Social Value is now moving into the same sphere, but how will FM interact with this new term, and all the underlying complexities? What is Social Value to FM? And brutally, what do these industry leaders in city towers know about implementing positive social change on the ground?

Social value does not fit so neatly into the classic corporate paradigm of measurement and management, something the conversation seemed stuck on at various points throughout the session. I appreciate the issue, and sympathise, but they sometimes seemed to be missing the point a little – measurement comes during and after the fact, and FM as an industry has a way to go before reaching this point. The focus must now be engagement and building a strong social value foundation on which the future FMs can build.

There was a clear desire among industry leaders to take more than a ‘tick-box’ approach, and the ambition of both providers and clients on the positive social value FM could deliver was refreshing, but there was a distinct lack of knowledge of how to turn this ambition into industry-wide success. Although the motivations of the room were admirable there was a noted lack of motivation across the industry, and some key implementation concerns were unanswered, but this is the start of a process. Our industry is engaged and actively learning about how to do better by the communities they work in – and at every stage of the process that is to be celebrated.

The workshop overall had a challenged optimism – the industry is ready to get moving on Social Value but is under no illusions of the work the lies ahead. Noble ambitions can only take Social Value so far, and from this forum I came away with a cautious optimism. If we can get these good intentions out of the clouds and onto the ground in contracts, the industry is in for some impressive change.