Unlocking real estate’s power to forge change

Almost every human being is touched by real estate in some way. We live in it, work in it, shop in it, play in it, wander around it. All that means the built environment has a huge role to play in creating equitable places and spaces, in delivering communities and providing social value.

And there is a growing contingent within the sector that takes social value seriously. But unlike the E in ESG, the S is a little more complicated. It can be measured but no measurement is the same, and much of what we would describe as social value is intangible. So what can real estate do to ensure it is delivering places for all?

EG gathered a trio of experts to find out.

“Real estate has immense power to forge change,” said head of real estate social impact at The Good Economy, Vivienne King. “And that is really where this industry has the opportunity to step in and make that change happen.

“Yes, because we shouldn’t be a country that can tolerate 12.5% of the UK population living in poverty, but also because, actually, it’s better for our industry if we are able to do this. Because we are better able to protect our value and we are better able to distribute the benefits that our assets create to a broader spectrum of those who can benefit from them. So why wouldn’t we do that?”

And that “better for our industry” may well just be the key to getting the real estate sector to do more.

Why communication is key

Helen Goulden, chief executive of charity Young Foundation, said she didn’t really care what a business’s motivation to invest in equitable places was, as long as the outcome was positive.

“It doesn’t matter at all whether you have a material motivation or a moral motivation, as long as you get to the right place,” said Goulden. “What we’ve learnt from working with a range of different people from across the sector, big and large institutions, is that through the process of doing something, you come to care, you open yourself up to thinking in a slightly different way and feeling in a slightly different way.”

And for Goulden, the real key to caring and to delivering social value is about communicating with the communities in which you operate.

“Three-quarters of the FTSE 100 talk about communities as being a key stakeholder alongside their workforce, alongside their shareholders, often alongside their supply chain,” she said.

“But they give absolutely no real data on what they are trying to achieve, how they are doing it, whether the community actually wants and respects the priority that has been determined by the business and how they work together to drive and measure social impact.

“But I definitely think there is huge value in understanding what the needs and priorities of the community are. And when it comes to measurement, to be honest, the only really valuable measurement tool is whether the community believes themselves to be in a place that is trusted, where they have a sense of pride and belonging. Where they feel safe, they have shared spaces to live, work, play and so on.”

Reaching the pinnacle

“The role of community as a stakeholder has to be a fundamental part of any credible social measurement,” added Goulden. “So if your job is in the built environment, it is also building a thriving place where people feel a sense of influence and agency and involvement and they trust their neighbours and so on. That’s got to be the pinnacle of what a great built environment looks like.”

But to build that, real estate needs something it can show off, said Colliers director Holly Brown. And a badge goes a long way in forcing action in the sector.

“The real estate industry loves a really shiny badge,” said Brown. “It’s effectively just a marketing tool, but at the end of the day it’s about the balance to get stakeholder buy-in from very senior groups. And whether it is developers or investors, sometimes you do need that carrot.”

And that carrot just has to force the first bit of action. For Brown, that idea of a badge has to be a good thing if it pushes businesses to at least start looking at what they are doing and where they want to get to.

“I think what everybody could probably start doing is get a baseline,” said Brown. “Get your own badge. Get your personal badge for your building or your portfolio, wherever that may be, and start to measure what you are currently doing.

“Create a baseline so you know where you are today. And in a year’s time or six months’ time, you can go back and ask, ‘What have I done to get to the KPIs you have set out and how have I got there?’ And if it’s your own badge for your own building, I think that’s enough.

“I think everybody individually, regardless of where their commercial asset is, can probably do that now.”

For the Young Foundation’s Goulden that will be key to this sector actually delivering on social value.

“The S of ESG is this huge, open, pioneering field where, actually, we are all learning as we are going,” she said. “And the more that we can have a conversation about what is real measurement of outcomes, not just outputs of social activities, that’s where I get excited.”