Getting the UK property industry to deliver and measure true social impact, as a cogent part of their wider stakeholder strategies, is proving much more difficult than Property Week and Newcore had envisaged when we launched the Pro Bono Challenge at RESI last September.
This is despite the unbelievable changes in approach to ESG over the past six months (thank you, amazing Greta) and the fact that all businesses are now having to get to grips rapidly with genuine environmental and social impact, putting good governance around it.
Delivering the ‘E’ in ESG is a clearer, more measurable task for the industry, with obvious penalties for non-compliance. Energy usage, waste and carbon capture/output can all be measured and this information will soon be required by all institutional investors.
Campaigns such as Property Week and UKGBC’s Climate Crisis Challenge should be preaching to the converted. The government will no doubt bring a further spur to action through regulation. So it would be commercial suicide for building owners and developers not to prepare themselves to comply with this new way of doing business.
Solving social issues
It is the ‘S’ that is so difficult: how to engage the money-focused commercial property world to deliver social impact and standardise its measures and reporting. We set up The Pro Bono Challenge to flush out good examples of social impact, mainly targeting property companies, funds and developers. We have been searching for examples where businesses have contributed material money, time and skills to solve a social issue in a community.
The response has been disappointing to date. We have written to: all the listed REITs’ chief executives, but have only had positive input from U+I and Derwent; all the main landed London estates – the only response coming from Howard de Walden; and the CEOs of the top 10 UK property fund managers, with no response at all.
On a more positive note, we have had interesting input and examples from architects (Assael), heritage consultants (Turley) and property managers (Touchstone), which are providing pro bono time and skills to community projects; and there is a lot more good work being done out there. True leadership in this social responsibility space is being shown by the likes of Matthew Weiner at U+I, who, frankly, gets it.
But the ‘holy grail’ – a sizeable property company or fund manager sponsoring, pro bono, a regeneration project of scale compared with its own profitability – doesn’t seem to be much in evidence, other than the above and perhaps what Cubex and its consultants are doing at East Street Mews, Bristol, and we and our team are doing in east Oxford.
I hope that in the near to medium term, we evolve a market standard whereby ESG-conscious investors only invest with or in property funds and companies that can robustly demonstrate they are doing this.
It is also clear that the industry’s big players are not sufficiently engaged with Newcore and Property Week’s crusade and that we need broader back-up. We need one clear, industry-recognised, not-for-profit body to give guidance, training and valuation metrics to this social impact initiative. We are having positive discussions on that front and hope to announce these soon.
Meanwhile, if just one more major fund, developer or property company comes out of the woodwork as a result of this article, all this irritating copy will not be going to waste.
Hugo Llewelyn is managing director of Newcore Capital
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