How Does Social Value Relate to ESG, CSR and Sustainability?

Social value is a relatively young concept. It overlaps with several other terminologies, including ESG, CSR and sustainability. These terms are largely interchangeable, with a few differences to be aware of. 

Social value

Social value is an evolving concept and area. The government’s Green Book states that ‘social or public value therefore includes all significant costs and benefits that affect the welfare and wellbeing of the population, not just market effects.’ When translated into proxy values, social value is the quantification of the relative importance that people place on the changes they experience in their lives. Those changes can include social, environmental, and economic impacts.

To identify true social value, it is crucial to consider both positive and negative impacts. It is also important to recognise that these impacts and the methods used to capture them will vary depending on the needs and context of different scenarios and individuals. So, it is essential to tailor the measurement process as much as possible based on available research and data. 

Ultimately, social value can be seen as a culmination of factors contributing to wellbeing in both the present and long term.

What is ESG?

ESG (Environmental, Social and Governance) is a set of non-financial standards that can be used to assess investment risks. The key feature here is that ESG is investor-focused. It looks at how environmental and social issues affect an investment, rather than how they affect the wider world. 

The focus of ESG is on reducing risk and boosting returns on an investment, rather than actively driving sustainable development. 

ESG typically reports on activities and outputs rather than outcomes and impacts, and there’s no counterfactual analysis to determine the actual impact. It also doesn’t use proxy valuations or relative importance, which makes comparing outputs difficult. 

What is CSR?

CSR (Corporate Social Responsibility) is an organisation’s commitment to operate ethically and sustainably, and improve its positive impact on society. It often includes things like ethical labour practices, time for employees to do charity work, and efforts to be more sustainable. 

The focus of CSR is primarily internal, aiming to make the company more socially responsible in line with business objectives. Social value is external, addressing broader societal problems and attempting to solve specific community or societal issues. 

What is Sustainability?

Sustainability is largely interchangeable with social value. They cover the same three pillars – social, environmental and economic – despite social value often being misunderstood as only applying to social impacts, and sustainability only to environmental impacts. 

Other terms to be aware of

There are a few other key terms related to social value to be aware of.

1. Social impact / impact measurement – Social value is used interchangeably with social impact as an umbrella term to talk about societal impacts. Sometimes, social value can be seen as the quantification of social impact. 
2. The SDGs – The SDGs (Sustainable Development Goals) are a set of 17 global objectives, adopted by all UN member states in 2015 as part of the 2030 Agenda for Sustainable Development. They’re designed to end poverty, protect the planet and ensure that by 2030 all people enjoy peace and prosperity. They’re aimed at a country and government level rather than at businesses and organisations, but are still an important framework to understand and align with.
3. SROI – SROI (Social Return on Investment) is sometimes used interchangeably with social value. In fact, it’s a specific methodology that can be used to measure and monetise social value. However, the National Social Value Standard (SVS) used by Loop uses a Social Cost Benefit Analysis (CBA) methodology, – in line with HM Treasury Green Book guidance. 
4. B Corp – B Corps are for-profit businesses that meet the highest standards in terms of their social, environmental and economic impacts. They’re independently assessed and audited by B Labs against their measurement framework. Loop is a certified B Corp. 
5. Triple bottom line – A triple bottom line is when a business evaluates its success not just by profit, but by its impact on people and the planet.
6. Social value economy – A way to look at the economy that prioritises creating value for society, not just financial returns. It focuses on outcomes like wellbeing and life satisfaction. 
7. CSRD – CSRD (Corporate Sustainability Reporting Directive) is an EU regulation that requires companies to report on their environmental and social impacts. 
8. ESRS – The ESRS (European Sustainability Reporting Standards) defines how companies must report under CSRD. 

Want to know more?

If you want to know more, our in-depth social value guide has everything you need. You can also find out how Loop can help your organisation track and manage its social value.