Report

Social value roadmap for real estate

This report from UK think tank the SMF argues that the real estate and investment sectors must put their theorisations about social value into practice.

Social Value Roadmap for Real Estate sets out recommendations for how designers, developers, the financial services industry, and local and central government can work together to maximise social value within the real estate and investment sectors. The ‘Social’ component of the Environmental, Social and Governance (ESG) agenda has started to attract more attention. As such, factors such as the social and environmental impact of an investment and the needs of local communities, end-users and future generations are rising to the fore of decision-making as the pursuit of social value is increasingly seen as consistent with the pursuit of profit. Hence, new policies and instruments can be designed and implemented to incentivise all actors to lead in social value and integrate it into decision-making in order to maximise benefits for all stakeholders.

Recommendations:

• Central government and industry could partner to develop a social value kitemark for the real estate sector to provide a high-level, easy-to-understand seal of assurance on the embedding of social value.
• A “social taxonomy” could be developed alongside new Sustainability Disclosure Requirements, paralleling the Government’s planned “green taxonomy”.
• Use existing provisions in the planning system, such as local plans and S106 agreements, to maximise and contractualise social value
• Use the planned new Infrastructure Levy to hold developers to account on social value pledges and address the chronic under-funding of local planning teams.
• The real estate industry could be encouraged to consider social co-benefits of carbon offsetting activity, developing frameworks for ensuring that social impact is given appropriate consideration in decision-making
• Central government in partnership with the Local Government Association could develop guidance for local government carbon offset funds, focused on evaluation and consideration of social benefits within funds.
• Boost capacity in local planning teams. Research suggests a virtuous cycle of extracting additional developer contributions where planning teams are properly resourced. Helicopter models and secondments could be used to help local authorities develop expertise in social value.
• Post-occupancy evaluations (POEs), with a focus on social value outcomes, could become a standard element of design, development and planning in real estate. POEs need to be conducted more frequently to capture the long-term social value outcomes.
• Site social value handbooks could be created as standard for all large-scale developments and passed down to new site owners, detailing social value commitments and used as a means for councils and residents to hold developers to account on social value pledges.