Adapted from a keynote speech delivered by Sean Haley, Regional Chairman, Sodexo UK & Ireland, at the National Social Value Conference 2020
In November last year, the British Academy set out the changes they believe companies need to make to become “purposeful businesses” – changes that they say lie “at the heart of the future of capitalism, the future of humanity and the future of our planet”.
This is not new to Sodexo. We were one of the first few companies in the world to place social value at the core of its mission when it was founded in France in 1966 – and we have always sought to do good business in a good way.
Ten years ago, we published our global corporate responsibility roadmap – Better Tomorrow 2025.
We have plans in place across our business to reduce our impact on climate change, to cut waste, to recruit people from marginalised groups like ex-offenders, to cut plastic from our supply chain, to spend more money with local suppliers and SMEs and promote more women into leadership roles.
This is all well and good but we know that this isn’t enough to meet the challenges we face, because it is not over-dramatic to say that we are living in a time of crisis.
We face a global threat from climate change and there is a growing sense of inequity. A decade of austerity, underinvestment in communities, and the uncertainties around Brexit have all contributed to the recent upheaval in our political map.
And the basic call we hear time and again is that things must change.
Business must change. Government must change.
We know, at Sodexo, that we must change. We know we must get better as a company at ensuring social value is embedded throughout our contracts and our frontline operations.
But we have learned that we cannot to meet this challenge on our own. We need to see changes from the wider business community, government and the third sector.
Companies need to think about more than just profit. Value should not be driven by cost alone. Businesses need to step up and look at how they can add genuine social value where-ever they operate. We need to recognise that our long-term interests lie in creating the social and environmental conditions that will help our people thrive and the communities in which we operate prosper.
And this is a growing popular demand. According to Edelman’s Trust Barometer research, people are increasingly expecting businesses to lead social change and businesses are more trusted than government to achieve improvements.
The time for fence-sitting by large corporates has passed.
As the British Academy said about the future of the corporation last year, we all need to become “purposeful businesses” – as the challenges we face cannot be addressed without big businesses themselves taking direct action.
This is no longer a choice.
But businesses can’t make the changes required on their own. We need the right eco-system in place, where the government and all stakeholders share and embed our vision.
We can only achieve the changes we want to see when our clients in government and the private sector, the suppliers we do business with and, indeed, our competitors believe in it too and share the same desire to make it happen.
And this also means that government must think about more than just reducing costs and thinks instead about long-term social value.
The challenge – for all of us – is to make it work and create a framework we can all support.
Seven years after the Social Value Act was passed, we still find public sector clients who don’t include social value in their contracts; we still find private and public sector clients who don’t think it’s a priority; and we find suppliers who don’t think it’s a priority and can’t meet our standards.
And there is still the debate about how social value should be represented and measured in a contract.
We have seen some good examples coming from local authorities, but it is not yet consistent, and we know they are working towards fair evaluation criteria. This must be simple and consistent across both central and local government.
But whatever the final outcome, it is essential that this does not become a tick box exercise. We must make sure we don’t just choose to go for the things that are the easiest to measure. We must not decide to drop a target or commitment simply because it is hard to achieve or hard to measure.
To take one example, we know that getting ex-offenders into employment is one of the best ways to add social value. It takes people out of a life of crime, stops more people becoming victims of crime, and it adds massively to the well-being of a community – not least by preventing all the associated costs.
We aim to recruit 40 ex-offenders across our business each year, but we have learned that this is really hard to measure. We have “Banned the Box” and our application forms no longer ask people to declare if they have an unspent conviction, so our recruitment procedures don’t track what we want to know.
A further complicating factor is that people moving into work and away from crime don’t usually want to volunteer this information about their past. They want to move away from it, not be known for it or be reminded of it every day.
But just because it is hard to achieve and hard to measure, we are not going to drop our commitment to ex-offenders or retreat on ‘banning the box’. Instead, we are now working harder to get it to work. Our prisons and probation services work are now working with our broader business, so that we can line up candidates as they leave prison and actively move them into suitable vacancies. This allows us to not only support them to be ready for work through coaching, but also support them once in they are in work – helping to make sure they can stay in work.
We also need to remember that the real impact is on that person’s life, with their family and friends, and in the communities where they live – not in us ticking a box and achieving a numerical target.
We are not the beneficiaries of social value. The beneficiaries are among our colleagues, our customers and in the communities where we operate.
Of course, we know that we are already adding social value through our contracts. We are already making a difference to the lives of our people, our customers, to our partners big and small, and the communities where we operate. We know that there are many good examples of social value being implemented by commissioners and suppliers.
But we also know we have the opportunity for social value to grow.
The new government has already indicated that it wants to look at procurement and how it gets value from its spending. The government spends over £280 billion pounds on external suppliers every year – more than 13 per cent of the UK’s entire GDP.
We have a real chance to shape how this spending is judged for the value it provides overall.
As Demos reported last year, the government has the chance to ‘procure for good’ and ‘buy economic change’. If it can deeply embed social value into its procurement, all public sector contracts could buy more than just a service: they could buy genuine social benefits and change.
We have been talking to senior civil servants – people in the Cabinet Office, the Crown Commercial Service and in other departments – to find ways to embed social value into public sector contracts. This needs to be done in a way that is consistent and fair for everyone. We need a level playing field and there needs to be transparency in how contracts are awarded and monitored.
But there is clearly the appetite within government to be challenged and pushed to achieve more progress. The result of their consultation on social value in procurement is due to be published soon.
I hope that this will help strengthen and deepen the way social value is embedded by the government. I hope that it helps promote and measure social value in a transparent and consistent way. And I hope those companies bidding for contracts don’t treat social value as corporate window dressing and that they come to live and breathe their commitments – and demonstrate the kind of purpose that is needed to achieve genuine change.
We have a new government in Downing Street that seems open to radical reform. Change is in the air and I believe that we have the chance to re-shape the procurement eco-system in a way that helps us make the kind of social impact we need to achieve.
We are up for this change. It is no longer a choice. Let us together make it happen.
The time to act is now.