This article was originally published in Social Housing magazine.

When The Good Economy (TGE) set up the environmental, social and governance (ESG) Social Housing Working Group nearly four years ago, we knew we had an opportunity to transform the way investors view the sector. 

Working with investors, banks and housing associations, we sought to find a way of capitalising on the growing demand for ESG investment by producing a shared framework through which housing associations could report on their ESG performance.

The SRS, for which TGE provides secretariat support, has come a long way in that time, as has the sector, and we are proud to have recently welcomed our 150th adopter.

The popularity of the standard has given us some vindication that we were right to take advantage of this movement in the financial sector.

What we have found so far is that the standard has been of great value to both investors and housing associations.

Our annual review, which is due out soon, finds that more than three-quarters of funders feel that the SRS has led to the provision of better and more useful information in regard to assessing ESG performance in the sector.

Additionally, more than half of housing associations using it said that the SRS had reduced, removed or streamlined ESG reporting requests from funders, either entirely or partially.

This drives at the heart of what we set out to do with the standard: increase the focus on social and environmental performance and connect the sector with funders and give them a uniform dataset to work from.

What we have seen since the inception of the SRS is an increasing number of reporting frameworks, standards and regulations, both nationally and globally.

Our role as the secretariat is to keep track of relevant regulatory and reporting frameworks and ensure that the SRS remains aligned with relevant standards and metrics. 

Of course, the ESG landscape remains changeable and, by extension, so must the SRS.

Generally speaking, the standard of ESG reporting across all sectors has improved in recent years, with investors becoming more demanding. As such, there is a need to keep pace with expectations.

That is why we released version 2.0 of the standard last year, which is aimed at aligning more neatly with the Task Force on Climate Related Financial Disclosure (TCFD).

Following feedback from adopters and endorsers, the updated version has a greater focus on sector priorities. For instance, we are asking adopters to define their plan to tackle damp and mould, and also to set out their net zero strategies.

According to our annual review, the themes that adopters found it most difficult to report against were: theme two – ecology, theme 12 – supply chain, and theme one – climate change.

This shows that housing associations are struggling somewhat when it comes to environmental criteria, which is also considered one of the most important factors according to funders.

Therefore, TGE and Sustainability for Housing (SfH) will continue to work with partners in the sector to guide them on challenging areas such as reporting Scope 3 emissions, a specific aspect we know housing associations have been finding difficult.

Our recent engagement with leading funders in the sector also identified Scope 3 emissions as a key area for improvement, reinforcing the direction of travel towards a greater level of scrutiny of sustainability performance and progress.

This is just one aspect of the SRS that SfH and The Good Economy will look to develop in the coming year. 

Having reached the milestone of 150 adopters, we are more motivated than ever to deliver positive results for the adopter community.