[ORIGINALLY PUBLISHED IN SOCIAL HOUSING]
To some, sustainability reporting can seem daunting and arduous, but this must be balanced against the dual benefit to tenants and investors, argues Robert Hall, board member of Sustainability for Housing.
In the impact investing sphere, my main role is to work with institutional investment managers to incorporate measurable positive change into investment strategies. To me, social housing seems like the perfect sector for this.
Housing is an issue which foregrounds inequalities, but the importance of one’s home is an intersectional phenomenon which cuts across protected characteristics. This winter, many will be unified by what may feel like a lack of effective protection from dramatic increases in energy bills.
I applied to join the board of Sustainability for Housing in large part because of the unusually explicit and clearly defined role which social and affordable housing providers of all kinds play in the communities they serve.
I see the Sustainability Reporting Standard as a mechanism for making visible the positive outcomes these housing providers have, and to do so at a national scale, whether related to affordability and security, building safety and quality, residents’ voice, local ecology or the global climate.
All of these measures are synergistic: good-quality housing has a more predictable energy-consumption pattern, seeks to reduce that consumption, including through energy-efficiency measures, and thus has a lower carbon footprint. Good-quality housing has also been shown to increase the occupier’s sense of pride, place and control.
This function of the sustainability reporting frameworks, such as the Sustainability Reporting Standard for Social Housing (SRS), serves not only as a means of celebrating the good work of social and affordable housing providers, its standardisation enables the scaling up and aggregation of reporting across the sector.
This, in turn, enables those that finance the sector to get a more sophisticated understanding of the energy performance, quality and net affordability of social and affordable housing. Collectively, these factors can provide a measure of risk to potential investors, with the legally binding ‘carbon liability’ produced by net-zero targets functioning as an important driver.
The SRS and its quantitative detail may seem like a burdensome exercise for busy providers. However, the SRS provides a means through which providers can tangibly reduce their credit or investment risk profile. This means they can potentially access sources of capital which would otherwise not have considered investing in social and affordable housing, or access existing sources of capital at lower rates.
Ultimately, though, the greatest benefit is the knock-on impact this will have on tenants. It is no secret that housing associations are struggling to come to terms with the mounting costs brought by net-zero targets, building safety and continued development.
Therefore, any framework or method – like the SRS – which can facilitate access to finance to help with these financial strains must be a considered and positive development.
It would be naive to view sustainability through the lens of simply ‘for investors’ or ‘for tenants’.
There should be recognition that the beneficiaries of sustainability reporting are not mutually exclusive and that there is a direct link between greater investment in the sector and the benefit to tenants.
Indeed, I believe reporting does not simply provide an increase in the attractiveness of financing social and affordable housing through a recognition of its profound social and environmental value.
It can increase the supply of good-quality, well-insulated, low-emission social and affordable housing, and create communities within which people can feel fully supported and thrive.