Think tank calls for developer ESG accountability

Cross-party think tank Social Market Foundation is calling for developers to be held to account on social value pledges, as part of a drive “to give the S in ESG the attention it deserves”. SMF’s new Social Value Roadmap for Real Estate follows a series of interviews with investors, asset managers, and ESG specialists to identify the challenges and concerns around boosting social value in real estate. The work has been sponsored by law firm Trowers & Hamlins. SMF’s nine recommendations aim to hold parties responsible over the entire lifetime of a project. They include new policies and instruments which could operate up and down the real estate value chain, based on an incentivise-first approach to encourage all parties to lead across social value and integrate good practice into decision-making. The report’s nine key recommendations are: Central government and industry partner to develop a social value kitemark for the real estate sector Develop a “social taxonomy” alongside new Sustainability Disclosure Requirements Use existing provisions in the planning system to maximise and contractualise social value Use the planned new Infrastructure Levy to hold developers to account on social value pledges and address the chronic under-funding of local planning teams Maximise the social co-benefits of carbon offsetting activity Develop guidance for local government carbon offset funds Boost capacity in local planning teams Embed the delivery of post-occupancy evaluations (POEs), with a focus on social value outcomes, into the development process Create social value handbooks as standard for all large-scale developments and pass down to new site owners. Scott Corfe, research director at the SMF, said: “It is crucial that the real estate sector focuses on the S in ESG. Embedding social value into the built environment is essential if we are to improve public health outcomes, reduce crime, increase wellbeing and create vibrant local economies. Too many developments still fall short on social impact, failing to create sustainable living and working environments with a strong sense of place. “Our recommendations aim to give the S in ESG the attention it deserves, including through the creation of a new social value kitemark allowing everyone from investors to homebuyers to understand which developers are adopting best practice.” Sara Bailey, senior partner at Trowers & Hamlins, said: “The conversation around ESG is typically focused on the environment, as it can be easier to measure and assess environmental benefits. However, a growing appreciation for the importance of social value in real estate has exposed the difficulties felt across the sector in measuring and delivering effective impact for communities. The Social Value Roadmap for Real Estate identifies clear pathways to ensure the regeneration and renewal of our towns and cities are focused on positive outcomes for people.” The next stage of the campaign will look at regeneration and the future of levelling up, exploring how ESG and social value delivery is a core element of effective regeneration projects. To send feedback, e-mail julia.cahill@eg.co.uk or tweet @EGJuliaC or @EGPropertyNews