Social value represents the social and economic benefits brought about by responsible property development. It has many tangible outcomes: a vibrant community, jobs and economic growth, access to health and social care, supporting children in educational settings and where they live and play, wellbeing fostered by intentional design, stewardship and protecting local heritage, biodiversity and natural capital.
Social value is achieved during the lifecycle of a building, from planning and construction, throughout its occupation and in its management and maintenance. With the increasing focus on ESG credentials, and the need to articulate a purpose beyond profit, the challenge is how to achieve and measure social value.
Much work is needed to arrive at broadly accepted rating and measurement criteria. The National TOMs framework provides a recognised system for evaluating social value according to the principles of the Public Services (Social Value) Act 2012. However, by its nature, social value records non-financial and financial data. The difficulty is how to translate perceived “good” into measurable data.
Progress in this area is likely to be rewarded by the increasing capital allocations to impact investing, which is rising steadily with an acceptance that investing in social value can correlate with higher investment returns. Home Reit, which invests in housing for the homeless, achieved £241m in its capital raising, the largest investment trust IPO of 2020. Issues-led funds are likely to increase, such as the Women in Safe Homes (WISH) fund launched by Patron Capital, Resonance and Big Society Capital (BSC) at the end of 2020. The fund’s target of £100m will be invested in housing for women experiencing homelessness having survived domestic abuse or with other complex needs, an issue highlighted by the pandemic.
The real estate sector has much to contribute to creating social value, and thereby ensuring that real estate is meeting the demands of our times.
Find out more about ESG, sustainability and our Building Resilience thought leadership piece.