Environmental has dominated ESG conversations for years. Carbon emissions, net zero commitments, climate risk disclosures—these have captured attention, investment, and regulatory focus. The "E" in ESG has been working overtime while the "S" waited its turn.

That's changing. Social value is stepping into the spotlight, driven by regulatory requirements, changing expectations, and growing recognition that environmental sustainability without social responsibility is incomplete.

What Social Value Actually Means

Social value is frustratingly broad as a concept. It encompasses everything from labour practices to community impact to health and safety to diversity and inclusion. Unlike carbon, there's no single metric that captures it.

At its core, social value asks: what positive impact does your supply chain have on people and communities? Are workers treated fairly? Are local economies supported? Are opportunities distributed equitably? Are vulnerable people protected?

The scope extends beyond your direct employees to your entire supply chain. How your suppliers treat their workers matters. The communities where your products are made matter. The opportunities created—or destroyed—by your purchasing decisions matter.

This expanded scope is challenging. Most organisations have reasonable visibility of their own employment practices. Far fewer have genuine insight into conditions three tiers deep in their supply chains.

The Regulatory Push

UK public sector procurement has led the way on social value requirements. The Social Value Act 2012 required commissioners to consider social value when procuring services. The 2020 Procurement Policy Note 06/20 went further, making social value a minimum 10% weighting in central government procurement.

This isn't optional or aspirational. If you want to win government contracts, you need to demonstrate social value. Not just promise it—demonstrate it with evidence and commitments that can be monitored.

Private sector buyers are following the public sector's lead. Major corporations are building social value requirements into their supplier assessment processes. What was once public sector peculiarity is becoming market expectation.

The Modern Slavery Act 2015 created specific reporting requirements around forced labour and human trafficking. Companies above the threshold must publish annual statements describing their efforts to identify and prevent modern slavery in supply chains. This is social value compliance with real legal teeth.

Beyond Charity Days

Social value in procurement is often misunderstood as charitable activity—donation days, community projects, volunteering programmes. These things aren't bad, but they're not the core of what social value means.

Real social value is embedded in how you operate, not bolted on as corporate social responsibility. It's about paying the real Living Wage, not making one-off donations. It's about creating apprenticeships as core workforce strategy, not hosting occasional school visits. It's about supporting diverse suppliers as business practice, not ticking boxes on supplier diversity reports.

The shift from bolt-on to embedded is what separates organisations that genuinely deliver social value from those that just claim to.

The Living Wage Example

Consider the real Living Wage—the voluntary rate calculated based on living costs, higher than the legal minimum. Requiring your suppliers to pay the Living Wage is a social value intervention that has direct, measurable impact on real people.

Some argue this increases costs, and it does—marginally. But the evidence suggests Living Wage employers see benefits: lower turnover, higher productivity, better recruitment. The cost increase is often offset by these gains.

More importantly, if your organisation pays the Living Wage internally but doesn't require it from suppliers, your supply chain includes people who can't afford to live where they work. That's a social value failure regardless of your internal practices.

Extending Living Wage requirements to suppliers is concrete, verifiable, and impactful. It's what social value looks like in practice rather than presentation.

Diverse Supply Chains

Supplier diversity—actively seeking suppliers owned by underrepresented groups—is another form of social value. Minority-owned businesses, women-owned businesses, disability-owned businesses, social enterprises.

The logic is straightforward. Procurement spend is a powerful tool. Directing some of that spend toward diverse suppliers creates opportunities that might not otherwise exist. It circulates money through communities that have historically been excluded from economic participation.

This isn't about preferential treatment regardless of capability. It's about ensuring diverse suppliers have the opportunity to compete, addressing barriers that might exclude them from consideration, and recognising that a diverse supply base brings innovation and resilience alongside social impact.

UK organisations are increasingly setting supplier diversity targets, tracking spend with diverse suppliers, and actively developing the capacity of smaller diverse businesses to meet requirements. This is social value as strategic practice.

Skills and Employment

Procurement can directly create employment and skills development opportunities. Contracts can require apprenticeship creation, local hiring commitments, training provision, and career progression pathways.

Public sector contracts commonly include these requirements. A construction contract might mandate specific numbers of apprenticeships. A service contract might require training commitments for local unemployed residents. These aren't optional extras—they're scored and monitored.

For private sector buyers, similar approaches are possible. Major contracts can include social value commitments as part of the arrangement. Supplier selection can weight capability in delivering these outcomes. Ongoing performance monitoring can track delivery.

The key is making commitments specific and measurable. "We support skills development" is vague and unverifiable. "We will create 12 apprenticeships in electrical engineering over the contract term" is concrete and auditable.

Measuring Social Value

Measurement is the persistent challenge. Carbon can be measured in tonnes. Social value resists easy quantification.

Various frameworks exist. The TOMs framework (Themes, Outcomes, Measures) provides a structured approach used widely in public sector procurement. Social Return on Investment (SROI) attempts to monetise social outcomes for comparison with financial returns. Impact reporting frameworks from the social enterprise sector offer different perspectives.

None are perfect. All require judgment about what counts, how to value it, and how to verify claims. But imperfect measurement is better than no measurement, and the discipline of attempting quantification forces clarity about intentions and outcomes.

For procurement professionals, the practical approach is to define specific, measurable commitments; collect evidence of delivery; and report honestly on outcomes. This may not satisfy academic requirements for impact measurement, but it creates accountability and demonstrates genuine effort.

The Strategic Shift

The rise of social value represents a genuine strategic shift in how procurement creates value. Cost, quality, and delivery remain important—but they're no longer sufficient. The social impact of supply chains is increasingly part of how organisations are judged.

Procurement professionals who understand this shift—who can evaluate social value claims, structure requirements, and monitor delivery—will be increasingly valuable. Those who see social value as irrelevant or as someone else's problem will find their approach outdated.

Environmental considerations transformed procurement over the past decade. Social value is doing the same now. The organisations that embrace this shift will be better positioned—for regulatory compliance, for stakeholder expectations, and for genuinely responsible business practice.