Engagement Week: Businesses need a renewed focus on social value with localisation at its core
Businesses are more focused than ever on becoming a vested citizen of the communities they operate in. And there is widespread agreement that companies need to help fix pressing problems, from social inequality to the climate crisis.
But questions remain around how to really create social value and how to measure impact. Too much time is spent on approaches and metrics that don’t ultimately matter. This must rapidly change to help businesses embed social value in their everyday decision making – and show the measurable positive impact they are making on people and planet as well as profits.
Social value is a desire to generate long-term positive impacts for local communities, the environment, and other stakeholders – while generating profits and financial success for a company. For businesses to meet the scale of the social and environmental challenges we face, and thrive amidst changing demands from consumers, employees, investors and policymakers, we need a focus on social value that puts people at its heart.
Social value, ESG strategies and brand trust are closely connected, and one of the best ways of powering all three is by supporting local community causes that have the potential to deliver quickly on the social value model, from the ground up. Thriving communities mean thriving businesses and a thriving economy. So finding ways to implement, measure and sustain a localisation strategy is essential for the future of any business. To deliver big goals, you need to think local.
Businesses who are active, authentic and meaningful partners with their local community will build long term trust and relevance with their employees and customers. More than ever, people want to buy from, invest in and work for businesses they believe in and trust. For example, our research shows that 82% of consumers say they are more likely to trust a company that contributes to where they live or work.
This is not about businesses ‘doing things for people’. It’s about helping people to do things for themselves – working within and for the community, not on the community. We must give agency to the people and places who are most affected by global challenges. All businesses must respect and respond to the ingenuity and expertise of local community organisations who have a deep understanding of the issues people are contending with every day.
As companies place greater emphasis on strategies with an equal focus on benefiting all stakeholders, it is critical to demonstrate the relationship between social, economic and environmental factors, and organisational performance. This is where social impact comes in – assessing the direct outcome that happens when businesses make more conscious, socially valuable decisions.
Tracking and measuring what matters is key to all of this. Neighbourly’s platform uses transparent, real time measurement to show how and where businesses are making a difference. Hard metrics are combined with lived experience from local charities working in the communities, to create unique insights about what’s working, and what isn’t.
For example, M&S partnered with us to become the first major retailer to provide real-time updates on the number of tonnes of surplus food redistributed – showing how they are addressing urgent need, while contributing to the fight against climate change. Since 2015, M&S has donated the equivalent of 23 million meals to people in need and good causes across the UK, saving nearly 17,000 tonnes of CO2.
Societal change is afoot, and social value will only continue to grow in prominence. The government has committed to ‘levelling up’ society, and recently unveiled the world’s most ambitious climate target. There is also growing momentum around the recent launch of the Better Business Act – with more than 450 companies calling on Government to change the Companies Act, so that all businesses are legally obligated to operate in a way that benefits communities, workers and the environment, while still delivering profit to shareholders.
As we state in our new publication, ‘The power of local in delivering social value’, the pandemic has put the concept of social value to the test like never before. Now we must build on all we have learnt and reinforce the positive role of business in society. There has never been a more vital time to galvanise greater action from businesses. By changing how we account for and measure value, we can contribute to a fairer society and a more sustainable planet.
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