Recently we have seen a momentous shift in attitude when it comes to social value. Organisations and investors have increasingly high expectations for the businesses they work with and their respective ability to demonstrate their contributions to society and local communities.

Despite growing awareness, this isn’t necessarily new. Seven years ago the Government passed the Public Services (Social Value) Act 2012, which called for public sector bodies to consider  economic, social and environmental wellbeing when it comes to public services contracts and all they relate to.

Consequently many local authorities have since stipulated that major developments in their catchment area must add social value. This is often implemented by creating a social value strategy, which must be approved prior to planning permission being granted. Through this process a metric for measuring social value has become increasingly standardised and, as a result, a national social value measurement framework has now been adopted.  

This has been great at ensuring that large new developments are having a positive impact on their local communities, both within the construction phase and during their operational lifetime. Yet, according to the Chartered Institute of Building Services Engineers, new builds account for just 1 per cent of stock each year, so how can we ensure that existing buildings have social value too?

Firstly, you need to define what social value actually means. It can refer to the number of local employees, apprenticeships in the supply chain, local spend created, space provided to the community and even the number of volunteering hours undertaken by staff. All these things are then taken into account and given a monetary value by proxy. This proxy comes from predetermined national ‘themes, outcomes and measures’ (TOMs,) which subsequently draw on a wide range of databases such as the Office for National Statistics. Each economic value is then added up to provide a total social value for a property or portfolio.

In the last few years private companies have started to catch on to this public sector initiative, using the same TOMs to assess their existing asset’s social impact.

For example, in February 2018 Legal and General’s real estate and infrastructure arm took the successful social value practice it had already applied to its new build housing projects and committed to undertaking the practice for at least 20 per cent of its commercial properties over a four-year period. Since then, a number of other property firms have followed suit.

The beauty of this process is that once you have undertaken this calculation it is easy to see how it can be improved. Ultimately, even the smallest of assets can increase its contribution to society in some way.

Adding value has always been a priority when it comes to the property industry and as people become increasingly socially aware, this emerging trend is a good opportunity to find the hidden value many properties already provide.

Further information

Contact Savills Sustainability