ESG reporting standard launched to unlock new wave of investment for social housing
A total of 70 banks, investors and housing associations were named as early adopters of an industry-led sustainability reporting standard designed to unlock institutional investment to help tackle the UK’s deepening housing crisis.
The Sustainability Reporting Standard for Social Housing was unveiled today by the ESG Social Housing Working Group, a unique collaboration of 18 banks and investors, housing associations, service providers and impact investing organisations. TGE led the process of developing the Standard and published the working group's final report.
The working group was set up in 2019 in response to concerns ESG investment was being inhibited by the absence of a common reporting standard. As with many other sectors across the economy, there has been a plethora of ESG reporting frameworks, resulting in reporting that lacked transparency, was prone to inconsistency and was incomparable.
The aim of the Standard is to provide a voluntary reporting framework for housing providers to report on their ESG performance in a transparent, consistent and comparable way. This will make it easier for lenders and investors to assess the ESG performance of housing providers, identify ESG risks and opportunities to create positive social and environmental outcomes.
Sarah Forster, CEO of TGE, said: “By working together, the social housing sector and financial sector have demonstrated how the lack of consistency, transparency and comparability in ESG reporting can be overcome. We’re delighted so many significant lenders, investors and housing associations have already committed to using the Standard and believe it will improve access to finance for the social housing sector – helping deliver quality, affordable housing for all those who cannot afford to buy or rent in the private market.”
In case you missed the launch...
The Sustainability Reporting Standard was launched during a panel discussion hosted by Centrus on 10 November 2020. The panel included Lord Bob Kerslake (chair, Peabody), Clare Miller (CEO Clarion Housing), Sir Harvey McGrath (chair of the Advisory Council chair, Impact Investing Institute), Natalie Elphicke MP, Simon Century (director of affordable homes, Legal & General), Sarah Forster (CEO, The Good Economy) and Phil Jenkins (managing director, Centrus). It was moderated by Merryn Somerset Webb, Editor in Chief of MoneyWeek.
So far, 70 organisations (39 housing associations and 31 lenders and investors) have committed to become early adopters of the Standard. Participating housing associations – including Sovereign, Optivo, Clarion and Peabody – will report against the standard on an annual basis. Meanwhile lenders and investors, including Lloyds Banking Group, LGIM Real Assets, M&G and NatWest, have agreed to use the standard in their investment and credit policies, processes and/or product design.
The Standard was launched at a webinar hosted by fellow working group
member Centrus. The event included a panel discussion with speakers
including Lord Bob Kerslake, chair of Peabody. He said: "The £2 trillion
UK sustainable investment market is growingly rapidly, with an
increasing focus on the positive impact of housing associations. As well
as providing new homes, we help alleviate poverty, create jobs and
economic prosperity, increase health and wellbeing, and support young
"We also have a shared commitment to getting to net-zero carbon as soon as we can, and helping to make cities, towns and communities more sustainable in the future. This sector-wide reporting standard makes a significant contribution to the aim of increasing private capital flows into social housing, and will help a better and fairer economy and society to emerge after Covid-19.”
The Standard covers 48 criteria across ESG considerations such as affordability, fire safety and net zero carbon emissions, which are unveiled in a final report of the working group today. The report follows an earlier draft of the criteria, published in May as part of a sector-wide consultation. The consultation received feedback from more than 400 individuals, including representatives from housing associations, investors, trade bodies, financial experts and tenants’ groups.
The Standard will be overseen by a new Social and Affordable Housing: Sustainability Reporting Standards Board, which will be established in early 2021. A Governance Steering Committee has been set-up to oversee the establishment of this board, chaired by Susan Hickey, a former Chief Financial Officer at Peabody Trust, with secretariat support from the Impact Investing Institute.
For a full list of early adopters visit esgsocialhousing.co.uk.