Before the COVID-19 pandemic, social value had become an increasing part of the narrative. More inclusive capitalism, particularly in real estate and development, was the new order of the day.
The pandemic itself has also led many businesses to deliver some excellent social responses. From pro bono real estate work to help the NHS to brewers and distillers switching production from beer and gin to hand sanitisers, these creative and fleet of foot actions were certainly not part of the social value plans for these companies at the start of 2020.
Let’s make no mistake, for many businesses the rest of 2020 will be about survival. Few will be in a position to deliver the aspirations – commercial and social – that they might have had at the end of last year.
But when we emerge from the horror of COVID-19 the world will be a different place. Society will need more help from the private and public sectors. People will think even more carefully about which companies they want to work with, work for, invest in and have investing in their neighbourhoods. Social value will be more important and we’re likely to see the creation of a new social contract.
For real estate, infrastructure, construction and development, the changes to HM Treasury’s Green Book promised in the Budget could also be a social value game changer.
At present, when procuring developers and contractors, the public sector is constrained by a valuation system outlined in HM Treasury’s Green Book which dictates ‘best consideration’ for any project.
The Government review of the Green Book could embed social impact within planning, making it part of the legal framework.
The direction of travel is clear: contractors bidding for work or developers looking to become a development partner or seeking a planning approval will need to deliver more social outcomes. They will need do more to capture and measure the social value of programmes to secure their corporate licence to operate and unlock commercial success.
Business will need to use robust Cost Benefit Analysis (CBA) methodologies which align with the Green Book or the OECD’s Cost Benefit Analysis and the Environment. They will also need to undertake a comprehensive assessment of economic, environmental and social impact and value for their key stakeholder groups on every project.
It’s clear that there will be significant economic and social challenges as we learn to live in a post-COVID-19 world. Investment in a sustainable built environment in all its forms will be welcome, but there will be an even greater expectation that it must deliver improved outcomes for society.
Matt Sutton is a director at Camargue