​ Legal & General Capital’s John Alker on moving on from monetisation when measuring social impact

The built environment has a huge influence, both positive and negative, on many of these issues in terms of day-to-day lived experiences, whether it’s the link between the cost of living and availability of housing; the impact of housing on physical and mental health; the potential for development either to damage or regenerate nature; or the ability of our infrastructure to cope with a warming climate.

Although real estate can’t solve the nation’s problems on its own, it has an important role to play. Our sector, and the people who work in it, have an opportunity and a responsibility to create positive societal impact. If we’re not making things better, we’re part of the problem.

Many in the sector have embraced ’social value’ as a response to these challenges. It has become a prominent tool for local planners and a lot has been achieved through public-sector leadership. But businesses tend to use it to rebrand what used to be called ‘corporate social responsibility’ – perfectly good charitable work and corporate responsibility activities which, these days, should simply be a hygiene factor and not positioned as anything that goes above and beyond.

Let’s shine a spotlight on process and people, not theoretical pounds, and open-source our respective approaches to encourage transparency, learning and better outcomes for everyone.

Another issue is a tendency to rush to monetise social value, attaching a pounds figure to non-financial outcomes. There is a danger that, in chasing ever-higher numbers of social-value pounds, the focus is on what various methodologies are ‘worth’ – not what delivers the best outcomes for people. At a basic level, it is confusing – and could even create distrust among communities when the intention is to do the precise opposite.

Heretical though the idea may be to my fellow sustainability professionals, who are used to (reasonably) solid environmental metrics, it is time to move on from monetisation with a new approach to measurement. The focus must be on measurement of real-world outcomes to check we have delivered what we said we would; to make sure we have not accidentally caused negative impacts; and to test a theory of change.

Process is key. Thanks to work by various groups, we know what a good process looks like to deliver positive social outcomes for people and communities. There should be analysis of place-based needs, high-quality community engagement and a strategy to meet social, economic and environmental needs. We are very deliberately moving from social value to social impact, we define it as the intentional, additional, and attributable economic, social, and environmental benefits to communities as a result of our investment in real estate.

As a sector, we are at an inflection point. Do we obfuscate with case studies of community projects — which we know are the exception, not the norm — or glossy infographics showing millions of pounds of social value added when we know it’s little more than business as usual? Or do we challenge ourselves to integrate best-practice delivery and measure what matters?

Let’s shine a spotlight on process and people, not theoretical pounds, and open-source our respective approaches to encourage transparency, learning and better outcomes for everyone.

John Alker is head of sustainability at Legal & General Capital