Jeremy Galpin, Social Value Consultancy Lead at Costain calls on the sector to use the Value Toolkit from the earliest stages of project-planning to improve the social, economic and environmental value across the lifecycle of assets.
We have a once in a generation opportunity to significantly shift the basis on which we invest in infrastructure, so that our decisions are sustainable by the widest definition, and contribute to the global wellbeing of humanity, as well as delivering a just transition to a low carbon world.
The Value Toolkit supports this by offering a multi-capitals approach and by taking a systems view to decision-making. This approach allows for more transparent and inclusive stakeholder engagement. As a society, we have to grapple with complex questions to meet the challenges of a changing climate. For example, is nuclear green or not? The answer is as complex as the question. We must find the words to present it simply, and engage with the widest possible range of stakeholders.
The Value Toolkit offers a framework for doing this.
What is intrinsic and extrinsic value, and why must it be considered from the beginning?
I have put forward a definition for social value for the sector, ‘social value for infrastructure assets is both the intrinsic, and extrinsic impact of the asset, on the wellbeing of society, throughout the asset’s lifecycle.’
Intrinsic value is the social value ‘belonging naturally and essential’ to an asset. An example of this is the Thames Tideway project where the intrinsic value of the super sewer is in cleaning up the river Thames. The intrinsic value is an important part of ‘why’ the asset is being built.
Extrinsic value is the wider value over and above the intrinsic value of the asset and is not essential to the functioning of the asset. On Thames Tideway, this was social value that is not essential to the delivery of the project.
Clearly defining the extrinsic social value wanted from the Thames Tideway project from the beginning has shaped the project delivery from procurement, through to community and staff engagement. The community volunteering, the work with people who were not in employment, education or training, skills and development programmes, and the biodiversity planning were not essential to the delivery of the asset itself, but they have all amplified the positive impact of this multibillion-pound capital investment programme. Choices like this help us all achieve our vision for a built environment that delivers better outcomes for people and the planet.
By having a clear, and agreed, understanding of the outcomes being sought from a project at the beginning, all parties can start on the same page and ensure that any decisions they make are guided by these outcomes. It’s critical that intended intrinsic and extrinsic value should be agreed at the optioneering stage of the business case development.
Jeremy Galpin, Social Value Consultancy Lead at Costain
The Value Toolkit – a multi-capitals approach to unlock social value from infrastructure
Significant investments can benefit from using the multi-capitals approach to capture the social, economic and environment drivers right at the outset of the business case development.
The Value Toolkit is one mechanism for stakeholders to come together to agree on the outcome and benefits wanted from the project across the four capitals of production, natural, human and social. This can be used to create a value profile to guide decision-making, and to define what data needs to be collected to communicate with stakeholders whether these benefits have been realised. This allows intrinsic and extrinsic values to be embedded into the technical specification of the asset.
This value is often being realised across the built environment – but it is not always being captured and measured. The Value Toolkit gives us the framework to put in place metrics across all of the capitals, and to measure them through the whole life cycle of a project or portfolio so we can understand if our interventions are having the impact all stakeholders want.
The time to change is now
Infrastructure professionals are recognising that this is our moment to shift that paradigm towards value-based decision-making. Our customers are looking to reshape their decision-making process for capital investment in infrastructure assets, to balance global outcomes across social, environmental, and economic criteria.
Costain uses tools including the Value Toolkit to help clients align business case development with a multi-capital approach. The toolkit enables stakeholders and experts in systems thinking, sustainability, change management, risk management and business case development to speak and be heard in a shared language.
We are helping clients use the Value Toolkit right from the earliest stages of project planning to unlock intrinsic and extrinsic social value. It can help you too.”