[ORIGINALLY PUBLISHED IN SOCIAL HOUSING]
Over the past three years, ESG reporting has become more established among housing associations. Landlords must now be ready to respond to an evolving set of challenges, writes Brendan Sarsfield.
With the onset of a new year comes lots of enthusiasm and good intentions. Housing association (HA) boards are not immune from this and they will be planning how to make progress on a familiar set of challenges: building new homes, helping customers with the cost of living and, of course, reaching net zero.
Amid these competing demands, it is important that HAs look out for some key environmental, social and governance (ESG) challenges in the coming year.
The ESG reports we have received over the past few years have highlighted the genuine desire and energy being put into decarbonisation.
But now, there is a need to move to delivery mode and begin putting those plans into action at scale – and fast.
Many will have put applications into government for a piece of the £80m pot for Wave 2.2 of the Social Housing Decarbonisation Fund (SHDF), submissions for which are due before the end of the month.
However, it is no secret that, while useful, £80m is only going to scratch the surface of what is required to effectively address the scale of the retrofit challenge. As well as being crucial to reaching net zero, the role of retrofit in preventing issues of damp and mould should not be overlooked.
It would be remiss to look to the year ahead and not highlight the forthcoming general election, and it will be interesting to see what promises are made by the main parties regarding funding for retrofit.
As we enter the period where big spending commitments are made, it is vital that the sector begins to make the case for more funding for retrofit.
To do so, the sector needs to tell a collective story and this needs a common reporting system, which the Sustainability Reporting Standard for Social Housing (SRS) can help with.
Sustainability for Housing (SfH) is looking forward to working with our partners to help establish a strong voice on this matter, as we are aware that work that is not done today will become harder tomorrow.
Refining scope emissions data
From an ESG reporting standpoint, SfH has seen strong improvements in the general standard of reports HAs are producing.
However, there are a number of areas where more accurate reporting is required, with one such area being Scope 3 emissions data, which covers all indirect emissions in an organisation’s value chain.
Calculating indirect emissions is an undeniably difficult process and getting it right will take time.
As noted in our second annual review, unsurprisingly, the range of emissions reported by HAs varied significantly, as there has been a divergence on methodology.
Going forward, we need to work together to collect and influence Scope 3 emissions because they represent a significant proportion of total emissions.
As highlighted in our annual review, Scope 3 emissions accounted for 69 per cent of total emissions. Scope 1 emissions – those emissions that come directly from an organisation’s assets – made up 24 per cent of the sector’s total emissions.
Finally, Scope 2 emissions – indirect emissions that an organisation is responsible for through the likes of electricity and energy – make up nine per cent of total emissions.
Given the scale of Scope 3 emissions, more work must be done to improve reporting in this area, something which SfH is keen to support.
Getting emissions data right, now, is important as there are a number of regulatory changes due in 2024.
For example, updates are expected on the Sustainability Disclosure Requirements and the Green Taxonomy, and while these changes will not directly impact HAs, they will impact funders to the sector who are likely to pass on these requirements to borrowers.