The introduction of the Public Services Act in 2012 was a turning point for how the benefits of infrastructure developments and projects should be measured. For years, the primary success factor was cost but today, increasingly, professionals working in the highways and infrastructure sector must look at a project’s impact on the environment, local communities and wider society. Indeed the UN Sustainable Development Goals now provide us with a framework to develop social value, with the paradigm of infrastructure development moving from MEAT (Most Economically Advantageous Tenders) to MAT (Most Advantageous Tenders).

Speaking at a recent CIHT webinar designed to illuminate these issues, Sue Kershaw, managing director, transportation at Costain, said this was a time of “huge and exciting opportunities to shift the basis on which we invest in infrastructure and to produce a low-carbon world. It’s a doubly-difficult issue, but there are many tools that can help us with social value, including digitisation.”

In a similar vein, Ines da Faden Silva, group treasurer, Tideway London, highlights the role of social value in finance. “We can’t achieve the UN goals without fundamentally changing the way money flows and I think financial institutions understand that,” she explained during our webinar. “Social concerns continue to rise up the agenda for investors, boosted by the pandemic. This, she said, is reflected in the growth of the social bond market, which is now worth more than US$160bn globally. 

Ines talked about “a significant shift in investment preferences”, particularly as the millennium generation begins to express very different investment objectives. These, she said, will include “non-financial objectives where they want their money to do more good, which means additional pressure on the financial sector.”

Emily Dawson, head of benefits at Lower Thames Crossing, focused on community impact. She believes there can be many advantages to a local area when an infrastructure project is undertaken.

The Lower Thames Crossing is currently the largest project in development at National Highways, she said. Therefore we spent a lot of time talking to people along the route and understanding the communities. It’s not just about the economic benefit of shorter journey times, it’s what it means to people – an extra bit of time every week gained by not commuting.

Here are some key trends in social value that we believe will become increasingly important to CIHT members and the wider highways and infrastructure community.

1) Data and technology is key in the implementation of social value 

The pandemic has shown the value that technology can bring, especially in challenging circumstances. It has provided us with sophisticated tools and technology (digital twins, artificial intelligence, virtual reality) that have allowed us to harness our potential, ultimately proving a catalyst for change. In the context of social value, digital technology can be an essential tool in helping organisations to get things right.

2) The policy landscape around social value is moving quickly 

There has been a rapid change in the policy landscape over the past three years and the pandemic has been the enabler for even greater change. Social value has reaped the benefits of this, with policy initiatives such as the Green Book and the Construction Playbook – ultimately leading the way for change.

3) A way of capturing work around social value must be found

The industry is getting better at promoting the positive efforts in this area, however much of the social value work undertaken by SMEs often goes unnoticed. There needs to be an adequate method of storing and referencing the work that is done around social value.

4) Investors are now looking for organisations to be implementing social value

Investors are shifting their focus to how social value plays a role in the wider ESG agenda. As such, they are raising financing through social bonds which have grown in size from $18bn in 2019 to more than $160bn in 2021/22. This is reinforced by large infrastructure projects, such as Tideway London, having issued £1.7bn worth of sustainable finance.

5) Social value doesn’t just come from big projects

Often the projects that get the most airtime around their social value initiatives are the large-scale projects, such as HS2, Tideway and the Lower Thames Crossing. While these projects can make a positive social impact on communities, we shouldn’t overlook the many smaller projects taking place. For these, demonstrating positive social value is often much easier to evidence.

CIHT held a recent Masterclass webinar focused on social value, with insights from Emily Dawson, head of benefits at Lower Thames Crossing; Ines da Faden Silva, group treasurer, Tideway London; and Sue Kershaw, , managing director, transportation at Costain. You can watch the webinar in full here.

To discuss what social value means to you, head to CIHT Connect.

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