Podcast summary

The episode begins with an introduction to the topic of social value, emphasising its importance for organisations. Victoria Hartley, a sustainability professional with extensive experience, is welcomed back to discuss the concept of social value and its evolution from historical practices to modern frameworks.

 

Transcript

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Announcer (00:00):
On this episode of the Cambridge Marketing Podcast, understanding the importance of social value,

Victoria Hartley (00:06):
It is such a positive thing for an organisation to do to be able to talk about the impact. People may be proud of the amount of money that goes in, but actually they will feel much more connected to the story or the narrative or the case study around the programme.

Announcer (00:22):
This is the Cambridge Marketing Podcast with Kiran Kapur.

Kiran Kapur, host (00:27):
Hello and welcome. This week we are looking at social values and I'm delighted to welcome back Victoria Hartley, who is a college tutor and a sustainability professional with 20 years experience of working in a wide range of sectors and organisations on all aspects of the responsible business agenda. Victoria, welcome back. Let's just start with a really gentle introduction about what is social value.

Victoria Hartley (00:53):
So social value is I think a recognition of the responsibility that organisations have to society. So historically that's been around the local community, around a head office or a factory, and the responsibility that society felt that organisation had to its employees and the local community that has developed over the decades as corporate responsibility and sustainability has done. And social value now is very much a holding businesses to account in terms of a much more sort of rigorous process around how you understand the positivity and actually being able to measure that positivity and contribution towards society.

Kiran Kapur, host (01:44):
Thank you. So is this very much how some of the earlier industrial companies started where they would build housing for their employees and perhaps schools and provide health? So that's where the social value starts?

Victoria Hartley (01:57):
Yeah, absolutely. Its roots do go way back and there's actually a really interesting connection to often sort of Quaker based organisations, but if you look at the Cadburys and sort of big brands that were around hundreds of years ago, there was a recognition that they had a responsibility to educate, provide healthcare, and I think that was often felt to be very philanthropic that they chose to do it and it was a nice to do, but actually there was a really strong business case even back then around ensuring that you had a skilled and healthy workforce to draw from. So yes, education, health, making sure there was food, all the basics. And that journey has evolved to now consider not just maybe the communities that are around perhaps a head office, but as we've, through sustainability has become a much more sophisticated notion where we now consider what's known as the value chain. So recognising a responsibility to where you are supplying where you are buying your goods from. So organisations like Innocent, Starbucks, et cetera, where they are buying coffee beans or there's a whole footprint of responsibility now that is much broader than it was.

Kiran Kapur, host (03:15):
It's one of those concepts I think that can come across as a little bit on the fluffy side. And I think when you look back at some of the, as you say the Quaker industries where they were providing decent housing, decent healthcare, decent education because the State didn't. So you basically got it from your employer or nowhere else. It's a very paternalistic, it was very much the founder of the company decided what was sensible to offer the workforce. But I think there's an understanding there was a logic there, but is there still an equal understanding now of why social value is important or is it seen as a bit fluffy?

Victoria Hartley (03:50):
Yeah, no, that's a really interesting question. I almost think it's gone full circle. So I think it was necessary as you said. So you were absolutely plugging an essential gap. I think then as things like the healthcare system education system became more formalised and there was access to that, then perhaps we did move into a more philanthropic or philanthropy driven era for corporate responsibility. And it was very much around community donations and often there was a phrase that was around chairman's wife or chairman's whim. So as you said, it was maybe an issue or a cause that somebody had a particular affiliation or interest or passion about. So you drove charitable. It was a very charitable process for a while. We've now moved into, and the term social value and community investment, I think very much infer that it has moved away from being charitable donations where you didn't necessarily hear the impact that your money had or in terms of how companies reported on it.

(05:01):
They were just reporting on the money that they spent and that was the narrative social value and the framework which will come onto, but the framework that comes with that and community investment, this has really brought a kind of rigour to the process. So there was a really strong business case as to why companies did support society, did support communities. So from the local piece that we talked about to as more aligned business aligned that you are supporting society to address issues that are relevant to your business, relevant to your employees, relevant to your local community, all of these pieces were very key to what became known as a licence to operate. So they were really important to your employees. So they impacted recruitment and they impacted retention. They were very important to brands in terms of the reputation. So that whole piece around your licence to operate the community side of that, the social side of that was very important.

(06:09):
So that's brought a kind of rigour. And as we've seen frameworks like ESG, which is an investor led movement around environmental, social and governance aspects of a business and how businesses are responding to those impacts, the social piece has then been elevated to be considered alongside environmental impact and governance issues. So yes, there is now a real rigour and it's no longer a fluffy nice to do. It's part of core business strategy. It is approached in a certain way. There are measurements, KPIs, frameworks, and a real move towards not just talking about the amount of money that you're putting in, but understanding the difference that your financial contribution, but also your employee's time if they're volunteering or gifts in kind. So all of the contributions, what value do those have and how do you measure that value and report on that value? So absolutely has moved from a point of fluffiness and over here to very much central part of business and certainly sustainability strategy.

Kiran Kapur, host (07:24):
So you mentioned frameworks, so frameworks or framework, I'm not quite certain if there's one or many. So can you sort of talk me through how that works?

Victoria Hartley (07:32):
Yeah, so there has been over the last couple of decades a sort of move, as I said, to organise your societal contribution, your community investment into something a bit more organised. So as I said, not just talking about the pounds that are going in and maybe the number of hours that your employees are spending volunteering, but to understand the outcome. So how many volunteering sessions in school you are delivering, but also the impact. So really kind of understanding the longer term change that you are facilitating through that. So there are frameworks around that, what it was the London Benchmarking Group but has moved on. So measurement frameworks around how you quantify that investment. But social value itself is now a government led measurement framework. So the government produced a framework and now requires any organisation that is bidding, tendering for work from any part of local government through to core central departments in government to as part of its bid, responded to a social value framework that they have developed.

(08:48):
So the framework sets out a number of core themes and a policy outcome that they want to address through the contribution of the company. And then that is then broken down. So there are a number of criteria and if you are bidding tendering into government, you will be asked to respond to a number of those criteria specifically in your tender in your bid response. And there's a waiting associated to that. So it may be that 10% of your total bid value is social value in terms of the scoring, or it may be up to 30 or I think 40% as well. And you have to respond to those criteria and sort of outline a response, which includes metrics that you will be then held accountable to over the course of the contract should you win it. So that is the sort of social value framework that sits behind social value as we've started to talk about it. So you will often hear industries that are more often tendering for work. So construction for example, has been tendering for local authority projects for a number of years. So they are familiarised and now talk a lot more about social value. There is a social value team potentially and other industries or sectors that tend to have that sort of bid process, use frameworks, and there's whole teams, there's whole measurement structures behind that in terms of how you collate the information to then report back on your social value strategy.

Kiran Kapur, host (10:24):
So you said there are companies that are now talking more about it. Can you give me an example of how a company would talk about that?

Victoria Hartley (10:31):
In the bid itself, that tends to be what sort of drives it. So if you take a big kind of construction companies for example as a sector, they will have created a social value response. So there is the bid aspect to that. So alongside the main bid process, there is a social value aspect to that. That is then I think reflected in broader strategy. So you may have a social value report and a lot of the measurement frameworks, there's now sort of online databases where you collect the information to be able to report on it and they produce a report and that is something that they will potentially share. You'll often see a social value report that's been shared with not just the client, but also more broadly with stakeholders. So they may put that onto their website. Others will incorporate the social value because it is quite specific and it's about added value. And there are areas of societal impact that a company may have that doesn't fall under the government framework. Quite often they will wrap the social value into a broader narrative around community engagement or social impact as opposed to just the measurement, which tends to be the value part of it. So you will have annual reports, it's included within sustainability reports, there's often a section on a company's websites and then they will share it through maybe thought leadership if there's areas that they feel they want to highlight particularly.

Kiran Kapur, host (12:12):
So is there an example of a company that you can think of that does this? Because I think it's easy to understand the sustainability side. Companies often talk about their plans towards net zero, so you can see an obvious measurement. Is there something, can you think of a company that gives examples of their social value?

Victoria Hartley (12:29):
So I know Lendlease is one within the construction company and a lot of the big construction companies will do the same, where they will have a social value section within the report, the broader sustainability report, or it will sit alongside sometimes. So sustainability becomes more around environment, although environment interestingly is also included within social value because there is a recognition of crossover between the two. So yes, someone like Lendlease for example, or any of the big construction companies on the websites, you will generally find a social value report or as I said, it may be that it's termed slightly broader than that. So societal impact for example, where they will set out a vision or a goal for the impact that they want to have and the contribution they want to make to communities and society. And then they will follow often a sort of similar process to a sustainability report where they have understood through dialogue and stakeholder engagement what issues matter to the communities that they've identified as being relevant and important to them.

(13:42):
And then they will set out themes and programmes and initiatives that are responding to need within those themes. And then it will drill all the way down to, but how are you going to understand whether you have made a positive contribution? So KPIs and how they're going to measure against those, both in terms of the more tangible outcomes, but often you will see it's sort of supported by maybe a theory of change or a longer term understanding of impact. Shell is an interesting one to look at because they have been in this space for a long time and we're quite sort of scrutinised in the space of community investment many years ago. But I think that prompted a very sort of strategic approach early on, whereas other companies were maybe, as you said earlier, that it was just it sort of nice to do and there wasn't the strategy behind it.

(14:39):
And they have been very much at the forefront of thinking around how you ensure impact, but also how you understand and communicate your value to what you are doing. So if you look at their reports, and particularly through the Shell Foundation, really good examples of qualitative and quantitative understanding of the difference they make. And then more recently, I think I mentioned supply chain right at the beginning, innocent through their foundation again, Starbucks have a really clear strategy around how they focus, organise, deliver their community engagement, thinking about the community in the broadest sense. So that whole piece around supply chain to communities that fall within that.

Kiran Kapur, host (15:32):
When I was prepping for this podcast, I asked various colleagues and various other people what they thought social values for organisations was. And what I tended to get back was, oh, that's when they make the website rainbow coloured for Pride Week or something like that. Now is that part of social value, is that a good thing to do or is that just something that companies do and it's almost seen like greenwashing or just woke washing?

Victoria Hartley (16:01):
No, I think it absolutely is. And values, values themselves have become incredibly important to a business. So being clear about what your values are, we no longer just have a sort of transactional exchange. We expect a company to have a point of view and to have a brand that is based on values and ethos and all these characteristics, and that's important to employees in terms of working for an organisation that they feel has values and purpose, there is absolutely a piece around acknowledging what is important to society and what is important particularly to your employees. So that then crosses over into not quite hr, but you are thinking about your employees through that lens. So yes, absolutely. I think recognising the importance of what's going on in the outside world and therefore highlighting particular days or awareness weeks has become very much part of the social value calendar.

(17:12):
So you've got your projects and everything that you run, but you also want to recognise the causes, the days, the points in time that are important to the community, important to your employees as well. So that would tend, I would hope to go alongside a programme of activity. But yeah, absolutely. I think having a point of view and raising awareness around some of the issues and challenges that we have become very pertinent in today's society. So we've had International Women's Day, we recently so many, many companies will have acknowledged that internally and potentially externally as well in terms of what they're doing and what does that mean to them as a business and what does that mean to the communities that they're part of.

Kiran Kapur, host (18:02):
And I know you see social value as part of a sort of social journey. So can you describe what a social journey is?

Victoria Hartley (18:10):
Yeah, I think the journey is very much as we've said from ad hoc charitable donations that have been made potentially without a huge amount of thought or due diligence. And I think businesses are very much on a journey to strategize their thinking in order to ensure impacts. And that's important to them as a business because there is more and more pushback that you can explain the difference that you've made as opposed to just the contribution that you've made. And I think that's the journey, that's the journey that we are on, and businesses are very much at different points of that and they arrive at different points. So you have someone like Ben and Jerry's, if you go back pre maybe I think they have held onto that, but certainly they were established with a real social awareness. So they did a lot around campaigning, a lot around raising issues that were important to the founders, but also that were relevant at the time. So they've almost arrived quite a far point in that journey, whereas you have others that just did write the checks and maybe didn't think about it. So that sort of continuum and the journey I think is about understanding your place as an organisation, understanding the expectations on you from your stakeholders, and then working through a journey of how you become more, not necessarily just strategic, but that you think through what it is that you are doing to ensure that you meet expectation and that you address the things that are important.

Kiran Kapur, host (19:58):
So I think we've been very clear on what the benefits are, and a lot of it is towards both what your customer's expectations and your employee's expectations. What are the key challenges?

Victoria Hartley (20:07):
That's an interesting one. I think the key challenges are linked to the fact that it's been done in a certain way for many years. A company has potentially just written checks and there will be certain members within the organisation for whom that worked out very well and that was what they felt passionate about. So moving on to something that is more strategic and requires a consideration of criteria and due diligence and all the things that come with the way that we now look at sustainability as a whole can be challenging for those that are maybe used to it sort of operating in certain ways, it requires more thought and actually the process of understanding impact is one that takes resource and thought to put in place. I think once it's in place, it's not necessarily that sort of resource heavy, but that process of understanding in a different way of doing things certainly is finding the right partners as well can be a challenge.

(21:14):
And the challenge can also be for your partners. So again, I think we have notions of going off and doing good and sending 250 employees out to do a volunteering day, which is fantastic, but actually causes quite big challenges for most certainly if you are looking at local charity partners, there are all sorts of considerations that come with that for them. So the challenges and perhaps on their side as opposed to the business side. But yes, I think sort of formalising things tends to be the sort of sticking point, but it's also a hugely coming back I guess as I do to the positive that hugely rewarding and I think there is a definite sense that doing it the right way. The business case, as I said, is really strong now and therefore the challenges are ones that certainly most organisations can find a way of overcoming.

(22:10):
But yeah, from financial, if there's budget required to do something, the time it takes, certainly the social value process that I talked about in terms of within a bid is hugely, it is a process and it's quite a rigorous process and it certainly requires you to look at what you are doing and that there are potentially gaps in that where you are at the moment. And a lot of resource needs to go into finding opportunities, building opportunities and partnerships that will deliver on the expectations set out and the bid. So yeah, the bid side of social value is quite resource intensive for sure.

Kiran Kapur, host (22:55):
But I suppose for overcoming challenges internally, it's much easier to say, we've got to do this in order to do a bidding process than we've got to do this in order to be a nice organisation.

Victoria Hartley (23:05):
Yes, yes. I think a lot of businesses, most businesses realise that's community investment or social impact, whatever you want to call that. The broader piece around it is hugely important to people. It makes them proud of the organisation. They feel good to go out and be involved in some volunteering or to be able to nominate a charity that they feel really passionate about for match funding,

(23:37):
For example, if you run a match funding programme. So that sort of support and not wanting to take it back to the kind of nice to do, there is a really positive human element to societal impact and community engagement. So it is such a positive thing for an organisation to do if it does it well and to be able to talk about the impact. For example, people are maybe proud of the amount of money that goes in, but actually they will feel much more connected to the story or the narrative or the case study around what difference the programme that the money went into has made to whatever audience it was that it was targeting.

Kiran Kapur, host (24:20):
Victoria Hartley. That's a lovely positive place to finish on social values. Thank you very much for your time and your expertise, explaining what can be quite a complex area. So thank you very much indeed.

(24:32):
You're welcome. Thank you, Kiran.