Should Organizations Be Looking Beyond Social Value to Invest in Social Capital?
There is a Powerful Need to Focus on Lasting Impact for Communities
I’m working on something that I think is significant. I’m going to share some of my thinking and findings as I go. I’d love to read your comments and feedback which will help me refine concepts and models.
I’ve felt of sometime that the “S” for “social” in ESG is underserved. And I’m working through concepts and processes that I think can change this significantly.
In an era where corporate social responsibility is increasingly scrutinized, organizations face a pivotal question: should they expand their focus beyond traditional social value investments to prioritize social capital?
Social value, often embedded in procurement and corporate strategies, delivers tangible benefits to communities but can sometimes prioritize immediate gains over enduring change.
In contrast, investments in social capital, emphasizing networks, trust, and relationships, along with human capital initiatives like education and skills development, promise more sustainable community impacts.
I plan to develop the argument that a shift toward social capital could yield longer-term societal benefits.
Defining Social Value and Its Drivers
Social value refers to the broader positive impacts an organization generates on society, extending beyond financial profits to encompass economic, social, and environmental benefits.
In the context of public procurement, it ensures that public spending creates additional advantages for communities, such as improved wellbeing, job creation, and sustainability.
For businesses, social value represents the positive societal contributions that align with ethical practices and long-term viability.
Several drivers compel organizations to invest in social value. Regulatory frameworks play a central role, particularly in public procurement. The UK’s Public Services (Social Value) Act 2012 mandates that public authorities consider how procurements can enhance economic, social, and environmental wellbeing in relevant areas.
This legislation applies to services contracts above certain thresholds, encouraging commissioners to evaluate bids not just on cost and quality but on broader impacts.
Beyond the UK, similar policies globally, such as those aligned with the UN Sustainable Development Goals, push for integrated social considerations in procurement.
Market pressures also drive adoption. Consumer demand for sustainable brands influences 80% of corporate commitments to environmental and social value creation.
Investors and regulators add momentum, with 55% of initiatives responding to investor expectations and 67% to oversight mandates.
Enhanced brand reputation, customer loyalty, and talent attraction further motivate organizations, as socially responsible practices differentiate them in competitive markets.
The Potential Short-Termism of Social Value Investments
While social value investments yield immediate benefits, they can suffer from short-termism, where organizations prioritize quick wins over sustainable outcomes. Short-termism in finance emphasizes quarterly results, often at the expense of long-term investments like research, human development, or environmental stewardship.
In social value contexts, this manifests as one-off projects, such as community events or short-term job placements, to meet procurement criteria or regulatory requirements, without ensuring ongoing impact.
For instance, managerial short-termism negatively affects corporate social responsibility engagement, as executives focus on immediate financial returns, potentially undermining broader societal goals.
In procurement, bids emphasizing social value might deliver temporary benefits like local hiring during a contract period, but fail to build lasting infrastructure or skills, leading to dependency rather than empowerment.
On a bad day it can feel a bit tic-boxy if we are honest.
Ultimately, these investments risk being performative, lacking the depth needed for transformative community change.
Investments in Social Capital’s Lasting Impact
To counter short-termism, organizations should invest in social capital, defined as the value derived from positive connections, networks, and relationships among people.
Social capital fosters trust, cooperation, and resource sharing, enabling communities to access opportunities and build resilience.
Closely related are human capital initiatives, which focus on enhancing individuals’ education, skills, and health to boost productivity and wellbeing.
These investments have a more lasting impact on communities than traditional social value efforts. Human capital development breaks cycles of poverty by equipping people with tools for self-sufficiency, such as through education programs that lead to higher earnings and lower unemployment.
For example, initiatives like workforce training in disadvantaged areas improve individual outcomes while strengthening community vitality, as skilled workers drive innovation and economic stability.
Unlike short-term social value projects, human capital builds enduring capabilities, contributing to intergenerational progress and aligning with goals like reducing inequality.
Comparatively, while social value might provide immediate aid (e.g., infrastructure projects), social and human capital investments create networks and skills that sustain growth.
Social capital acts as a mediator for value creation, enhancing collaboration and innovation, whereas social value often remains transactional.
Conclusion
These are my opening thoughts and initial conclusions.
I have come to the view that organizations should indeed look beyond social value to invest in social capital, integrating human capital initiatives for deeper, more sustainable community impacts.
My observations from practice, reading, and discussions with colleagues have been that while social value addresses immediate needs driven by policies like the 2012 Act, its short-term focus limits longevity.
For me, by prioritizing networks, skills, and relationships, organizations can foster resilient communities, aligning ethical imperatives with long-term business success.
Over time I will be developing that social capital investment framework
References
Action Sustainability. (n.d.). What is social value? Retrieved February 14, 2026, from https://www.actionsustainability.com/resources/what-is-social-value
Crown Commercial Service. (2026, February 13). What is social value? | Social value in public procurement. Retrieved from https://www.crowncommercial.gov.uk/social-value/what-is-social-value
European Securities and Markets Authority. (n.d.). Short-termism pressures from financial markets. Retrieved February 14, 2026, from https://www.esma.europa.eu/sites/default/files/trv_2020_1-short_termism_pressures_from_financial_markets.pdf
EY. (2023, April). What is market short-termism’s perceived impact on ESG investments? Retrieved from https://www.ey.com/en_gl/media/podcasts/better-finance/2023/04/season-5-episode-6-what-is-market-short-termisms-perceived-impact-on-esg-investments
Flora, C. B., & Flora, J. L. (2008). Community capitals framework. Purdue Center for Regional Development. Retrieved from https://pcrd.purdue.edu/wp-content/uploads/2020/09/Community-Capitals-Framework-Writeup-Oct-2014.pdf
Harvard Business School Institute for Business in Global Society. (2025, July 22). Research: pressure for short-term profits jeopardizes climate investment. Retrieved from https://www.hbs.edu/bigs/pressure-for-short-term-profits-jeopardizes-climate-investment
Legislation.gov.uk. (2012). Public Services (Social Value) Act 2012. Retrieved from https://www.legislation.gov.uk/ukpga/2012/3
National Academies of Sciences, Engineering, and Medicine. (2014). Chapter: 4 Developing Human Capital in Communities. In Civic engagement and social cohesion: Measuring dimensions of social capital to inform policy. https://doi.org/10.17226/18811
Nielsen, R. (2019). Does managerial short-termism affect corporate social responsibility? Finance Research Letters. https://doi.org/10.1016/j.frl.2024.106610
Simply Sustainable. (n.d.). The growing importance of social value for businesses. Retrieved February 14, 2026, from https://simplysustainable.com/insights/the-growing-importance-of-social-value-for-businesses
Social Capital Research. (2014, December 7). Why is social capital so important? Retrieved from https://www.socialcapitalresearch.com/why-is-social-capital-so-important
Social Value Portal. (2024, October 2). What is Social Value? Definitions and examples for businesses. Retrieved from https://www.socialvalueportal.com/news-and-insights/what-is-social-value-definitions-examples-and-how-to-create-it
Southern New Hampshire University. (2025, June 16). What is Social Capital and Why is It So Important? Retrieved from https://www.snhu.edu/about-us/newsroom/career/what-is-social-capital
Tussell. (2024, May 22). What is social value? (A supplier’s guide: Procurement Act 2023). Retrieved from https://www.tussell.com/insights/what-is-social-value
UN Global Compact. (n.d.). Short-Termism in Financial Markets. Retrieved February 14, 2026, from https://unglobalcompact.org/take-action/action/long-term
University of Maryland Robert H. Smith School of Business. (2022, December 22). Six Things Companies Can Do To Improve Environmental, Social Impact. Retrieved from https://www.rhsmith.umd.edu/research/six-things-companies-can-do-improve-environmental-social-impact
Wikipedia contributors. (2026, February 12). Public Services (Social Value) Act 2012. In Wikipedia, The Free Encyclopedia. Retrieved from https://en.wikipedia.org/wiki/Public_Services_(Social_Value)_Act_2012
World Bank Blogs. (2024, June 24). Investing in people for a resilient future: a year of impact of the Human Capital Umbrella Program. Retrieved from https://blogs.worldbank.org/en/investinpeople/Investing-in-people-for-a-resilient-future
Footnotes
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I had a period of being responsible for social value initiatives on a large-scale construction program. I loved the job but started to query its impact. I've been working towards developing a new model.
While social value investments yield immediate benefits, they can suffer from short-termism, where organizations prioritize quick wins over sustainable outcomes.
Short-termism in finance emphasizes quarterly results, often at the expense of long-term investments like research, human development, or environmental stewardship.
I'm trying to work through alternative approaches with more lasting benefits through one or two thought pieces, if that's not too pompous a phrase. I'd love your thoughts.