Businesses which are yet to put in place an ESG strategy were urged to “start your journey before it is too late” at an event held last week to discuss how real estate can improve its response to environmental, social and governance needs.
There was also a clear message from firms including Stanhope and Grosvenor that embedding continuous improvement across ESG brings business benefits. But what frameworks are effective for the sector?
Given the specific pressures on real estate to respond to the climate emergency and societal issues, does the B Corp global certification go far enough or is a self-defined approach best?
The discussion, held at private bank Coutts, itself a B Corp, brought together sustainability leads from Grosvenor, Stanhope, engineering design firm Hydrock, which was bought by Stantec in May, and consultancy TFT.
Nils Rage, head of ESG at Stanhope, developed the firm’s bespoke ESG framework when he joined three years ago. It encompasses the key topics you would expect, including embodied carbon; the climate resilience of the buildings Stanhope manages for investors; and creating jobs and opportunities in the construction supply chain.
The right thing, not the easy thing
However, Rage said he also saw benefits for Stanhope in achieving B Corp, certification in 2023.
“We didn’t need a north star to guide us on ESG – we had that in our own framework. But B Corp was a way to crystallise our culture of doing the right thing, not the easy thing, and to encapsulate that in a way that is easily comprehensible for various audiences.”
As a corporate governance tool, B Corp was particularly valuable, he said, given the generational transition taking place within Stanhope, which has been committed to sustainable development for more than 25 years.
Both Rage and TFT’s chief knowledge and ESG officer Mat Lown said B Corp’s emphasis on continuous improvement – with firms required to update their impact assessment and verify their updated score every three years – was crucial. Rage said it was a useful tool for him in discussions with the company’s leadership and stressed that securing B Corp status does not mean you are “perfect”.
TFT also became a B Corp in 2023, in a process which Lown said gave the business food for thought on how it could be a more inclusive and progressive employer and helped steer its course from partnership to employee ownership trust.
At Grosvenor’s UK property arm, sustainability manager Eve Bellers, who joined the landed estate in 2021, also saw the appeal of B Corp to communicate the environmental strategy it is pushing forwards with at pace to its value chain. She carried out a benchmarking exercise, which she found extremely useful – particularly on social impact.
However, despite feeling that Grosvenor’s UK property arm was pushing even faster than B Corp required in key areas, Bellers said the business decided against going for certification.
Ultimately, it proved impractical because there was not a clear means to “bespoke it” to a subsidiary within the larger Grosvenor group, which includes diverse businesses such as rural estates and investment arms.
Evolving standards
Without the instantly recognisable B Corp stamp of approval, Grosvenor still felt the need to invest in communicating its commitment to carbon reduction, waste minimisation, biodiversity and social impact. This led to its own branding of Planet Positive and People Positive. However, Bellers acknowledged that not all businesses would have the capability to do this.
Sadaf Askari, who heads up sustainable business and ESG advisory at Hydrock (now Stantec), said B Corp was very good as a governance tool but questioned whether it was the first thing companies should turn to if they are in the early stages of their ESG journey.
“You would first do materiality assessments on environmental, social and governance to understand what the requirements are for your organisation or sector. What are you doing well in-house? What are the things you are not doing well and how can you improve? Then you would look at frameworks and bespoke strategies,” she said.
B Corp has been consulting on a revised framework which will be rolled out from 2026.
Asked what changes he would like to see, Lown said he hoped that B Corp’s focus on US standards would evolve to allow it to be more specific to other jurisdictions including the UK. He also expects to see it become harder to attain B Corp status, which in turn would help to address any accusations of green washing.
Rage also said he expected the assessment to get tougher. The current focus on overall score meant companies could “smash it” in one area but just pass others. The next iteration of B Corp is expected to require a minimum score across a larger number of areas.
The discussion was attended by investors, developers, architects, lawyers, surveyor and operator businesses. Some 40% of the 84-strong audience work in B Corps, 30% had filled out B Corp assessments and 10% were using other, bespoke frameworks (including some alongside B Corp). A further 30% did not yet have a framework in place.
Photo © TFT
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