The terms social value and social impact can be interpreted in different ways by different people.
These differences exist even within companies themselves. This can also be true within the UK real estate sector where investors, developers, occupiers and managers are striving to understand and improve the impact their business activities have on communities.
The British Property Federation (BPF) and law firm Osborne Clarke have brought together a number of key UK real estate players to discuss social value and impact, how these terms might be defined, and which activities achieve the most positive results within communities.
Hosted by Ion Fletcher from the BPF and Osborne Clarke associate director Julia Jolley, the round table discussion was held under the Chatham House rule.
Participants included 13 representatives from a mixture of investors and developers which have major real estate assets and projects in the UK.
The institute for Social Value (formerly Social Value UK) and Social Value Portal were also participants, both of which have agreed to be quoted from the discussion.
In attempting to define the terms social impact and social value, there was a fair degree of commonality around how people use the terms on a day to day basis.
Social impact was agreed to mean the real world effects (positive or negative) of business activities on communities and the lived experiences of individuals. For instance, how setting up a training academy on a development site and having a policy of employing and training local people can improve the lives of those people, by offering more life opportunities and better future job prospects.
While social value is often used interchangeably to mean the same thing, there is more of a suggestion of an attempt to measure the impact. This could be through the monetisation of social effect or the number of jobs generated by a new development.
"The measurement of social value can sometimes use seemingly arbitrary numbers. But if a robust and credible framework such as the TOM System is used, then these metrics will serve as a meaningful reflection of the benefits a project has created or could create in the future."
Anna McChesney-Gordon leads Social Value Portal's consultancy team and commented: "The measurement of social value can sometimes use seemingly arbitrary numbers. But if a robust and credible framework such as the TOM System is used, then these metrics will serve as a meaningful reflection of the benefits a project has created or could create in the future. Using numbers helps to set targets at an early stage of a project but also allows for benchmarking and year on year comparisons. It’s important, however, that local needs and priorities are considered and there’s a balance of both quantitative and qualitative measurement and reporting to tell a more complete story about impact."
Quantification of social impact was noted as having pros and cons. On the one hand, it is easy for people within a business to understand the value, encouraging them to engage with social impact strategies at the early stages. It’s also now common for investors and local authorities to ask for a numerical value of social impact. Having such a value can be helpful for use in tenders and discussions with supply chain partners.
Conversely, there was a strong feeling that social impact is ultimately about people and quantification can obscure the 'human story'. Quantification calculation methodologies can also throw up results that are not truly reflective of (and potentially overstate) a property business's social impact. For example, it could include benefits the business would be delivering anyway.
There was, however, broad agreement that property businesses ultimately need both numbers and stories to convey to a diverse range of stakeholders the extent in which they positively impact upon the communities they are invested in.
Discussion was also focused around reporting standards which continue to evolve in this area. The Taskforce on Inequality and Social-related Financial Disclosures (TISFD) will soon begin work on recommendations enabling businesses and investors to identify, assess, and report on their inequality and social-related risks, opportunities, and impacts.
Developers often spend considerable time relationship-building with communities prior to and during the development stage of a project. But much of the benefit can be lost when that development is completed and sold on to a new owner which then takes on the project for the long term.
The Institute for Social Value challenges developers to look beyond what short-term impact they can have to win a bid, but rather engage with the community for an extended period, including at the pre-tender stage, to co-create place-based social value within the community.
Isabelle Parasram OBE is chief executive of The Institute for Social Value (formerly Social Value UK), the professional body for social value and impact management in the UK. She commented: "The Institute for Social Value challenges developers to look beyond what short-term impact they can have to win a bid, but rather engage with the community for an extended period, including at the pre-tender stage, to co-create place-based social value within the community. An example was a developer which built an amazing performance centre as part of its social value contribution. But after it handed over the development and withdrew, the community could not afford to sustain the centre, decreasing the net social impact significantly."
Toward the conclusion of the discussion, it was agreed that while social impact and value are climbing up the boardroom agenda, the lack of consensus on how to measure these probably reflects the fact that a 'one size fits all' approach may not be achievable or desirable.
Putting the communities' need before a target to ensure the impact would be real seemed to be a sensible way forward. But continued discussion and collaboration seems to be the way towards developing a common language, and reaching definitions, to allow fair inter-firm comparison.
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