Yana Georgieva, Senior Sustainability Consultant
Elevating the ‘S’ on the ESG agenda.
Fundamentally, Social Value in the built environment should be about improving the quality of life of people. Given the variety of projects and diversity of communities that the development process affects, a one-size-fits all definition of Social Value is neither feasible nor appropriate.
The idiosyncratic nature of Social Value gives built environment practitioners an opportunity to move away from box ticking to developing project-specific environmental, economic and social outcomes and interventions. This tailored approach seeks to inform strategies that respond to local needs and priorities and, in doing so, enhance wellbeing and improve the quality of life of affected communities.
Reactive to proactive position on “S”
As we entered 2020, the question around re-thinking the role of Social in decision-making took on a new meaning.
The Covid-19 crisis seems to have become a watershed moment for the ‘S’ pillar, having put a spotlight on the weak points of our societies when it comes to health and wider social inequality.
Some of the pain points that have come to the forefront are: evolving societal expectations associated with the growing inequality between wealth and poverty; access to affordable housing; connection to nature; gender and diversity gap; and increase in mental illness.
As a consequence, the expectation is that there will be an increased focus on businesses’ social responsibility towards their employees, supply chains, and communities in which they operate.
Ultimately, the three pillars of ESG are profoundly interconnected and require an integrated approach to maximise overall benefits and explore synergies. Social and environmental issues are effectively two sides of the same coin, and governance is the frame that ties them together. We can’t hope to deliver on the Paris Agreement commitments in a sustainable way without developing a proper understanding of key social factors and performing a balanced assessment of environmental and social implications.
Decarbonisation pledges currently being made by both the public and private sectors must be managed holistically to ensure that the transition to net zero does not deepen existing social inequalities but rather is used as a force for good that improves livelihoods and “levels up” communities.
We still have a lot to learn when it comes to maximising social benefits throughout the lifecycle of a built asset. Capturing this information in a way that is specific and tangible enough to inform meaningful decision-making at portfolio / corporate level is even more challenging.
Nevertheless, the perfect should not be the enemy of the good. The greater complexity around the ‘S’ pillar should not be used as an excuse for inaction or piecemeal interventions. This trend is particularly acute in the built environment sector where the awareness of the link between built assets and quality of life of occupants is growing markedly.
By elevating the ‘S’ on the ESG agenda, we might just get close to squaring the circle through the adoption of a more holistic understanding of “value”.
Embracing a longer-term time horizon and broadening the scope of metrics used to measure success would alleviate concerns associated with pressures organisations face for short-term returns.
The real challenge will be to find the right balance between harmonising social reporting requirements (to enhance transparency and increase uptake) alongside the flexibility needed to effectively address local needs.