TGE guides real estate sector's quest to unlock social value

Henry Palmer Mon, March 15th, 2021

A "roadmap" co-written by TGE for the Urban Land Institute (ULI) has been launched to guide the global real estate industry to understand, capture and enhance its social value.

The report Zooming in on the “S” in ESG: a road map for social value in real estate, was produced for the ULI's 45,000 members in partnership with social value strategist Eime Tobari from COCREATIF. It explores the steps for the industry to incorporate social value into corporate strategy, business practice and investment theory.

Through global surveys and in-depth interviews, the report confirmed a growing interest across the sector in the social dimensions of sustainable development and the key concept of "social value". Meanwhile, the report noted, the rapid rise of impact investing – investing with the intention to deliver positive change while generating a financial return – meant investors were geared to back schemes with explicit goals to create social value.

The research revealed there was no shared understanding of "social value" in the real estate industry, nor a common approach to describe or measure it. The plethora of frameworks, tools and methods designed to support social value or impact measurement and reporting, was difficult to navigate, the authors said.

Lisette van Doorn, CEO of ULI Europe, said: “As providers and stewards of the built environment, the real estate industry clearly has a clear role to play in creating social value. However, the financialisaton of real estate – where property is solely looked at through the lens of being a financial asset which can generate revenue and profit – has led to a disconnect between financial value creation and social value creation.

“Covid-19 is a wake-up call, and while the pandemic has brought major risks and challenges for the industry, it also opens up opportunities to rethink how to repurpose and connect real estate development and investment to local, place-based needs."

Photo by Matthew Henry
The financialisaton of real estate – where property is solely looked at through the lens of revenue and profit – has led to a disconnect between financial value creation and social value creation.
Lisette van Doorn, CEO, ULI Europe
Common interests

ULI highlights business leaders and investors across all industries increasingly acknowledge their role in tackling environmental and social problems. However, so far, most attention has been focused on environmental issues and the risks and opportunities associated with mitigating climate change, rather than focusing on social factors.

Dr Eime Tobari, director of COCREATIF and report co-author, said: “Real estate is a business of people and places. Whether through investment or development, decisions made by real estate professionals shape places and people’s lives. I hope our report helps organisations in public and private sectors to recognise their roles in social value creation and find opportunities to make a greater contribution though collaboration and innovation.”

Sarah Forster, TGE's CEO and co-author of the report, said: “It is vital all sectors across the economy ask how they create societal benefit. The built environment affects people and places in so many profound ways, which is why it is so important to explore the role of real estate in place-making, tackling housing affordability and creating more inclusive communities.

"We hope our research enables the real estate industry, through the Urban Land Institute, to begin to consider how it creates value beyond property values and yields. We hope this is the start of a journey that will enable companies to account for the contribution they already make to wider society and, more importantly, consider how this can be enhanced in the future.”

Further reading:
  • Zooming in on the “S” in ESG: a road map for social value in real estate, published by ULI (15 March 2021), is available on ULI's website here [paywall]
  • TGE is currently leading a project with the Impact Investing Institute and Pensions for Purpose, exploring the feasibility of "Place-Based Investing" as a vehicle to unlock private capital to tackle regional inequalities. More here
  • The roadmap was developed by TGE in partnership with COCREATIF, which provides strategic advice on social value in real estate and urban planning. The company was founded in 2019 as a vehicle to drive positive change for the sustainability of cities and places with a particular focus on social aspects, such as well-being, equity, social cohesion and cultural identity. More here.
Article
A roadmap for up-lifting social value in real estate? ULI analysis 15/03/21 A roadmap for up-lifting social value in real estate? Sarah Forster says the Urban Land Institute's road map report for the global real estate industry represents an important shift in perceptions of "value" across the economy and society
Photo by sergio souza
Article
TGE appointed by RM Funds as impact advisor to new fund News 24/02/21 TGE appointed by RM Funds as impact advisor to new fund TGE to report on impact performance to investors and provide IMM framework assurance in fund focused on UK businesses delivering social and environmental outcomes
Photo by CDC
Article
TGE starts work on project to mobilise institutional capital for place-based impact News 10/12/20 TGE starts work on project to mobilise institutional capital for place-based impact
Photo by Okwaeze Otusi
Article
ESG reporting standard launched to unlock new wave of investment for social housing NEWS 10/11/20 ESG reporting standard launched to unlock new wave of investment for social housing ESG reporting standard launched with 70 banks, investors and housing providers committed to boost transparency and consistency
Header image 2