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New group sets out proposals for standard approach to ESG reporting in social housing
Consultants and housing associations have outlined proposals on how to boost environmental, social and governance (ESG) reporting and investment in UK social housing.
A white paper published today by Peabody, consultancy Centrus and social advisory firm The Good Economy identified 10 themes and 45 metrics which can help housing associations and private finance align to achieve social value.
The paper notes that investment from debt capital markets in social housing has increased significantly in the past six years, rising from £16bn in 2013 to £39bn in 2019, with a further wave in funding required for fire safety and decarbonisation measures.
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The estimated size of the UK sustainable investment market is £2tn, according to the working group, which also includes Optivo, Clarion and Sovereign.
The 10 core themes are:
- Affordability
- Building safety
- Resident voice
- Resident support
- Placemaking
- Staff well-being
- Climate change
- Ecology
- Board and trustees
- Systems and risk management
The 10 themes and 45 metrics were developed through questionnaires and workshops with investors and lenders. The group is now consulting on the metrics and is looking for sector input.
ESG was a key feature in a recent revolving credit facility taken out by 43,000-home Bromford and in Clarion’s £350m bond that was issued earlier this year.
Optivo and Peabody have also recently signed sustainability linked loans, with the latter incentivising outcomes relating to job opportunities and affordable childcare places.
Sarah Forster, chief executive of The Good Economy, said: “To boost ESG investment to fund building it’s vital that housing associations demonstrate their impact and ESG performance in a way that is of most use to those making investment decisions.
“These themes and criteria have been developed with the help of the investor community, financial institutions and experts, and we’re looking forward to more discussions on these with all interested parties over the summer.”
Gordon More, chief investment officer at Homes England, said: “ESG factors play an increasingly significant part of many investors’ strategies with many explicitly seeking to invest with impact alongside financial returns.
“Affordable housing is uniquely placed to meet these investor objectives, particularly given its clear impact on social outcomes and rigorous governance by the Regulator of Social Housing.”
