While sustainability has been high on the agenda for real estate for some time, the focus has traditionally been on environmental considerations, like carbon emissions and air quality. Impact on communities and individuals has been a lower priority.
Fast forward to 2024, and things look very different. The world of real estate is waking up to the immense promise of Social Value – not just in the UK, but globally.
We recently explored this in our ‘Social Value in Real Estate’ webinar, with a panel of experts:
- Guy Battle, CEO, Social Value Portal
- Eoin Leonard, CEO and Founder, Catalyst
- Gabriela Palm Ho, Global Social Impact Lead, Longevity Partners
- Kanon Tsuda, Senior Strategy Consultant, Longevity Partners
They covered key Social Value trends, where value is being created for communities, and how new tools like the Real Estate Social Value Index (RESVI™) are making measurement of positive impact more accessible than ever. Read on for the highlights.
How buildings create Social Value
Guy Battle kicked off with a key observation: “Buildings are not spaceships”.
On the contrary, buildings are a part of our society and communities – in fact, they create our communities. A pivotal consideration has to be: how does a building, the team that manages it, and its occupiers contribute to society as a whole?
Guy explained where Social Value is typically created across the development lifecycle:
- Construction: 20% of Social Value creation is accounted for by the construction process, including jobs created, local spend, and how the tier one contractors and supply chain engage with the local community.
- Management: A further 20% comes from how the building is occupied and managed, from security to external upkeep. Are local charities used? Is local labour being sourced?
- Occupiers: The remaining 60% is unlocked by the occupiers’ initiatives in partnership with the community.
Insights on a shifting landscape
Eoin Leonard, CEO and Founder of technical advisory and ESG consultancy Catalyst, specialises in supporting clients navigate regulatory shifts, as well as the shifting attitudes of investors and asset managers.
He noted that the market has recently moved toward impact investment, driven by regulatory changes, especially those in the EU. Here are some of the major trends affecting the real estate investment space right now:
Social Value is being considered earlier
Developers are increasingly embedding community engagement initiatives and impact assessment at the earlier stages, with frameworks like the Social Value TOM System™ enabling a more targeted approach.
Diversity and inclusion is influencing the development process
Both the planning process and asset management space are becoming more accommodating to diversity and inclusion, with building designs being tailored to meet the needs of diverse groups and diverse use cases.
Place-making is becoming more prominent
Developers are increasingly prioritising the experience of the individuals interacting with the buildings, as well as biodiversity and other externalities.
Measuring impact with the Real Estate Social Value Index™
An important step in creating a more equitable and responsible real estate sector will be effective measurement of the Social Value created by already-existing (or in-use) assets.
Catalyst is a user of the Real Estate Social Value Index (RESVI), a detailed, standardised tool for measuring, reporting, and amplifying the Social Value generated by in-use real estate and infrastructure assets.
RESVI gives us a tool to align with our impact goals, whether those are the SDGs, or very specific goals that we’ve identified. It provides a risk management tool, giving us the ability to understand and manage social risks within the context of our buildings and the buildings that we manage.
Eoin Leonard, CEO and Founder, Catalyst
Catalyst recently worked with a major retail town centre of over 1.2 million square meters, where numerous Social Value activities were already in action. Using RESVI, Catalyst was able achieve an exceptional Social Value score – the town centre is now using RESVI to engage with partners, as well as improve their GRESB score.
Longevity: Social Value in the global real estate market
Longevity Partners is a London-headquartered real estate consultancy, covering a variety of areas in sustainability. Its global footprint gives the team deep insight into the evolution of sustainability, ESG, and Social Value around the world.
In the full on-demand webinar, you can see Gabriela Palm Ho’s overview of different regions’ different levels of Social Value maturity, from the UK and EU to APAC, the US and Africa.
She also revealed some of the major trends she and her team have observed across these regions:
Education: One hurdle is lack of awareness around just what Social Value is and how to make progress in the real estate sector.
Influence: Many organisations struggle to influence other relevant stakeholders to support Social Value goals – highlighting the importance of truly embedding Social Value in real estate decision-making.
Alignment: There is a desire to align Social Value strategies to existing sustainability strategies and reporting frameworks, such as GRESB.
Quantifying Social Value: The importance of adaptability
Quantification of ‘social’ considerations with numerical figures has been key to the rise of the Social Value movement – with the TOM System leading the way.
However, quantification may mean different things in different regions. Gabriela commented:
We see that the more progress in regions making more progress quantifying the ‘S’, the approach to quantification is more creative. It doesn’t stop at monetisation. Where Social Value is well diffused, there tends to be more harmony between the qualitative and quantitative aspects. The quantitative output also has more variations, incorporating percent demographic, independent suppliers engaged, and so on.
Gabriela Palm Ho, Global Social Impact Lead, Longevity Partners
Priorities also naturally vary in line with geographical needs and cultural priorities. For instance, Diversity, Equality, and Inclusion monitoring tends to be more stringent in the US, while in the UK the cost-of-living crisis has pushed affordable housing further into the spotlight.
This underscores the importance of responding to local needs and putting in place measures which compliment those needs. Social Value is ultimately about meeting real needs in an effective way – and real estate offers an unparalleled opportunity to do just that.
Want to learn more?
To gain deeper insight into the evolving landscape of Social Value in real estate, be sure to watch the on-demand webinar.
Or, find out how our clients are driving Social Value through their developments with our Success Stories in Real Estate report.
