The letter S in the ESG acronym is getting more and more attention as the importance of social impact investing is being recognised, experts agreed at Real Asset Media’s Impact Investing & ESG briefing at Expo Real last week.
“Until recently about 90% of the discussion around ESG was about the E and environmental factors,” said Andy Hay, managing director EMEA property management, Colliers. “I suspect a lot of people thought the S stood for Sustainability, but now all that is changing and the social aspect is coming to the fore.”
CMS has created an ESG Task Force in response to clients’ increasing interest in these issues.
“Social value is becoming more and more important,” said Michael Nauta, senior associate, CMS. “But the measurement of social value depends on the perspective of the stakeholder and it’s always a subjective measurement.”
CBRE has just launched its first ever residential impact fund, with an initial capital of €500 million, that focuses on affordability.
“We’ve already established our green credentials but it was time to go beyond sustainability and we expect the social aspect to increase in importance over time,” said Paul Oremus, fund manager, Dutch & European residential funds, CBRE. “So we decided to build a portfolio that really serves the needs of people who need affordable housing in Europe, turning the threat of rapidly rising resi prices into an opportunity.”
Social and environmental aspects go hand in hand
It is not a question of either/or: the social aspect usually goes hand in hand with the environmental aspect.
“We always try to keep our emissions as low as possible but we also try to contribute as much as we can to the local community,” said Arkadiusz Rudzki, executive vice-president leasing and sales, office development CEE, Skanska.
In practice it means consulting with local residents about their needs, doing training and mentoring sessions for local teenagers, offering jobs to local people to give them a chance of a better future.
When it comes to the project it means thinking about place-making, adapting the choice of services to put on the ground floor of buildings so they benefit the community and not just the tenants, and adding public spaces and green areas.
“In many ways, the social aspect is easier,” he said. “For us the most challenging aspect is the embedded carbon of every project we do and its indirect impact on the environment.”