Real estate joins the B Corp club

Are you part of the B Corp club? A small but growing number of UK real estate businesses can say yes – and more are expected to follow this year. “It is definitely a growing trend,” says Mark Robinson, property director and co-founder of investment manager Ellandi, one of the latest additions to this global movement of 6,200 companies and counting that are receiving accreditation for their social and environmental performance, transparency and accountability. B Lab – the non-profit network which operates the B Corp accreditation process – aims to harness the power of business to positively impact workers, communities, customers and the planet. Certification requires would-be B Corps to meet rigorous social and environmental standards, assessed by B Lab, which has a UK arm that is registered as a charity. It’s an exacting, evidence-based, multi-stage process with a stringent scoring system, and one that can take 18 months or even longer. [caption id="attachment_1167657" align="alignright" width="200"] Helen Hay[/caption] Just ask any of its newest members from the UK real estate sector. Along with Ellandi, they include London-based investor and developer W.RE, real estate and construction consultancy TFT and planning and design consultancy Marrons, part of legal and professional services group Ampa. No, really – do ask them. Because being part of B Corp is also about getting the word out to others. “It’s not a competition, it’s a community,” says Helen Hay, group head of culture and sustainability at Ampa, which began the process back in 2019. Mat Lown, TFT’s head of ESG, agrees: “We benefited before we were even certified – other B Corps in our sector and others were helpful in advising us on the process, and that’s something we’re already doing for others embarking on the journey.” An early adopter was Igloo Regeneration, becoming a B Corp back in 2016, while Portman became the first landed estate to gain accreditation last September. Blue-ribbon status Some 1,149 UK-headquartered businesses have achieved B Corp status, but EG could find fewer than 40 from the real estate sector. Larger propcos from the quoted sector and institutional investors are notably absent – perhaps an indication that it is less suited to businesses with more complex shareholder and stakeholder responsibilities. The top agents are also absent. So why do businesses in the club place so much value on it? “It is globally recognised, it has that blue-ribbon status,” says Robinson of the movement, which was founded in the US in 2006 by Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy, three friends with backgrounds in business, banking and private equity. Moreover, its ethos feeds into everything Ellandi does, Robinson says – from improving its paternity leave to making sure that every new investor it works with is aligned with its values, from investing in an internship programme that pays the minimum wage to creating town centres that work for their communities as well as for investors. “We had to prove to the outside world that we do what we think we do,” Robinson adds. Importantly, it is also a repeated accreditation: certified B Corps must update their impact assessment and verify their updated score every three years, or after a change of control. Once a B Corp does not mean always a B Corp – just take the example of BrewDog. Less than two years after its accreditation, the beer brand parted company with B Corp in December following a BBC documentary about its workplace culture. There is an expectation that B Corps will not only live up to B Corp standards but continually improve. For example, Hay says that Ampa has made good progress on its use of green energy, “but there’s more that we can do to get to net zero”. “We have used carbon offsetting, but for us that is not solving a problem. So we are looking at how we truly get to net zero,” she says. [caption id="attachment_1167665" align="alignright" width="200"] Brian Mullin[/caption] For Brian Mullin, partner and head of Marrons Planning, the benefits of B Corp status are manifold. One of the most important is the emphasis it places on looking after your workforce – particularly in the context of Ampa’s rapidly growing “house of brands” model, which Marrons joined in 2021 (when Ampa’s B Corp accreditation was pending). “In terms of attracting and retaining people, B Corp status is a no-brainer,” he says. “Creating an environment that encourages people to stay with you is really important, and our retention rates have been excellent. It’s a powerful tool for us.” In fact, Ampa achieved its highest score for how it treats its people, including its approach to pay and reward, its wellbeing initiatives and benefits, and embedding professional development support and opportunities across the group of brands. “We go after the best talent. These days, when you’re interviewing people, it’s you who is being interviewed as a business. You have to promote your business to the market, and [B Corp] gives us a real advantage,” Mullin says. It’s also a powerful tool when it comes to pitching for work, underlining Ampa’s ethos of being both “purposeful and profitable”. Real estate’s role There is also a more heavyweight answer to why firms in the real estate sector are joining the B Corp movement – and why more are expected to follow – and that is the unique role of the built environment in tackling the climate change emergency, “It’s the real estate industry that is going to deliver carbon net zero,” says Mullin. “We have seen the government’s policy targets change from 2030 to 2050, which is pretty depressing stuff. It means that we as an industry need to make the move.” Lown agrees: “Our industry is made up of so many moving parts – a wider understanding of sustainability is essential for us to work together better and have a better chance of positive change as an industry,” he says. With so much riding on businesses doing good and so much responsibility weighing on real estate to mitigate climate change, becoming a B Corp looks bang on trend. Hay says that B Lab has been recruiting in the UK to give it greater capacity to work through the process with pending B Corps, so the process is likely to speed up. “If everyone becomes B Corps, we can stop talking about ESG because it’s just the way we do things,” says Robinson. Let’s hope that buzz continues. Q&A with Mat Lown, TFT’s head of ESG  What is the attraction of B Corp? We in real estate know lots about badges and certifications for buildings, and we also know that badges can be misleading. For us, the great appeal of B Corp is that it isn’t just a badge. After a rigorous assessment process, you sign up to a framework for continuous improvement. And what’s more, you are entering a community of like-minded businesses to share ideas and ambition to improve, which adds extra accountability to your work. We also really appreciate the holistic approach it takes. We undertake so many different initiatives and certifications which could fit under an ESG banner – B Corp ties them together at a high level and provides the trajectory for doing more and thinking more broadly in terms of positive business impact. Is B Corp particularly important for the real estate sector given its role in shaping the built environment and its impact on carbon emissions? Undoubtedly. It is compatible with a great range of organisations, and its scope is broad and considers more than just environmental impacts, so you end up also considering how you benefit employees, communities and clients as well as doing the right thing for environmental sustainability. Our industry is made up of so many moving parts – a wider understanding of sustainability is essential for us to work together better and have a better chance of positive change as an industry. Would you like to see the big developers and investors going for B Corp status? I would like to see more big developers and investors becoming B Corps and am advocating it to interested clients for all the reasons I have mentioned. The likes of Coutts, the Portman Estate and FORE Partnership show that very different types of business in our industry can make B Corp work. What does B Corp status mean for TFT’s future plans? It is a verification of all the work we have done through the years, but also a long-term framework for the future. We are now looking at how we can work with other B Corps to amplify our impacts further. We have already had such great engagement from clients, industry peers and our staff, supporting us to take on the continuous improvement challenge and volunteering support along the way. Whatever comes next, it will be a team effort. Sascha Lewin, chief executive, W.RE Why is it so important for firms such as yours to reach for B Corp status? Like many companies, W.RE struggled to define and measure its wider ESG strategy. Working through the B Corp certification process was helpful in providing a clear framework and a set of guiding principles that our business can follow. B Corp certification covers a very wide spectrum and, as such, is not exhaustive or specific to our industry.  For that reason, W.RE is currently undergoing a separate, tailored ESG strategy analysis based specifically on our business and stakeholders. Are the values and behaviours it requires important to your investors? B Corp was not considered as a tool or badge to help attract investors. The values and behaviours inherent in B Corp mattered to our team – we started the process of certification following an all-team off-site. However, the feedback we received on gaining certification suggests that a wide range of our stakeholders, including many of our investors, do feel that having a B Corp certification is a positive attribute. What made you choose to go for B Corp over other accreditations covering ESG? B Corp seemed to address a wide range of ESG aspects, whereas most other accreditations we considered were more narrowly defined. B Corp also felt reassuringly hard work to obtain certification, and, consequently, is highly regarded. Why aren’t the big quoted propcos and institutional investors represented among B Corps yet? I imagine that large organisations have the resources to analyse their ESG behaviour themselves, as well as devise and monitor action plans specific to their business. To send feedback, e-mail julia.cahill@eg.co.uk or tweet @EGJuliaC or @EGPropertyNews Photos: Lead image © Anne Nygård/Unsplash Helen Hay and Brian Mullin © Shakespeare Martineau Mat Lown courtesy of Redwood Consulting