The real estate sector is getting better at sustainability, thanks to a growing emphasis on energy efficiency and environmental concerns. But the “S” in ESG – the social value of an asset or project – is lagging behind.
Yet social value is becoming increasingly important in the real estate market. Buyers are more likely to award contracts to companies with a strong social value offer. Investors are looking to back projects offering social value as standard. And the general public are keen to spend their money with, and work for, companies that consider purpose as well as profit.
Real estate businesses have a unique opportunity to deliver social value. They can enhance the lives of the communities they work within and the people who use their spaces. And the real estate sector can have a significant impact on the happiness of the UK’s workforce too – commercial real estate alone employs 1.2 million people!
But switching from ad hoc company initiatives to a strategic approach to social value can require a big shift.
And now, organisations wanting to win public contracts need to demonstrate their ability to deliver social value. Since 2021, contracting bodies and central government departments and their agencies have been using the Social Value Model to create the scope of possibilities or areas of focus. While this can give some guidance on what an authority is looking for, it doesn’t help you work out how to deliver it – and how to fund it.
So here we show you five ways to improve your social value game
1. Don’t assume you need to swap profit for purpose
In today’s real estate market, social value should be seen as an investment, not a cost. This can be a challenging reframe for a sector that has traditionally relied on financial returns and market performance as sole measures of success.
Research by the RICS in 2016 found that good placemaking led to an increase in house prices of 5-56% in the UK. The report infers that pursuing social value is increasingly seen as consistent with pursuing profit, especially among investors and developers holding onto real estate with a long- term view.
It’s becoming more widely acknowledged that properties with strong sustainability and social value credentials attract more investment and higher rents. Tenants are also more likely to stay for longer – so property managers develop brand loyalty and experience lower voids.
If you work with local authorities and government bodies, your approach to social value can be the difference between winning and losing work – so it makes business sense to do it well. Using a quality social value measurement framework like the Impact Evaluation Standard – already used by several central government and local government bodies and directly aligned to the Social Value Models – can be a great way to connect with procurers in a language they understand, and show the full scope of your impact.
2. Get better at monitoring and measuring your social value
Many real estate businesses will be regularly working in and giving back to the local communities they work in. But if you can’t track and report on that value, you’re missing a trick.
Consistently capturing the social value delivery taking place across the business can help you understand the impact you’re having, and make it easier to set targets and achieve even more. It also makes it quicker and more straightforward to communicate your good work with your customers, staff and stakeholders.
Thrive customer Laing O’Rourke has made huge strides in social value measurement and capture since they adopted the Impact Evaluation Standard. Improving credibility with clients, changing internal behaviour and benchmarking social value on projects to in turn deliver more, are just some of the benefits they have documented.
The best social value reporting will measure and monitor a broad range of outcomes – both qualitative and quantitative. Capturing the bigger picture reflects the complexities inherent in social value.
Thrive’s platform allows you to do just this, building a rich social value narrative by gathering information at every stage of the project and in multiple formats. This brings to life the relevant parts of the story for stakeholders inside and outside of your organisation, whether it’s keeping updated with what’s going on this week or a beautiful end-of-project report that shows just how much has been achieved – and how the legacy will live on.
3. Consider the people using your spaces – what do they really need?
As a developer, how can you integrate usability and well-being into your building designs? As a space manager, how can you enhance facilities in a way that meets community needs? If you look after buildings with tenants, can you improve their quality of life beyond merely providing a roof over their heads?
Flexibility and the ability to adapt in approach to the results of community consultation is a key point of the Social Value Model Award Criteria in both the 2021 and 2025 versions of the Social Value Model. Engaging effectively with the people in and around your spaces and adapting your plans to better suit their needs is enabling social value, and will result in spaces that are truly fit for purpose.
Thrive customer Adra, a housing association in North Wales, strategically prioritise the health and wellbeing of their tenants. Through workshops, community groups and bringing in outside experts to support their tenants, they are tackling issues like mental health, loneliness, unemployment and poverty.
By constantly thinking of new ways to bring people together, and providing the resources they need to thrive, Adra is improving their tenants’ quality of life.
4. Hire your suppliers wisely to increase your social impact
Practising socially responsible procurement is an opportunity to do even more good in the world. Making smart choices about who you work with, or guiding your existing suppliers on their social value journey, can increase your impact further, and strengthen your relationships too.
You could:
- Work with construction firms that use reclaimed or recycled building materials
- Partner with a charity to ensure your community spaces are well-utilised
- Choose energy suppliers with strong green credentials
- Work with architects who are great at community engagement
- Collaborate with an existing supplier on a joint social value initiative
Thrive customer Mitie, a leading facilities management company with a strong DEI commitment, works with MInority Supplier Development UK (MSDUK) to connect with minority-owned businesses. They also work with Social Enterprise UK (SEUK) to ensure they’re working with charitable organisations and social enterprises. By bringing in a rich variety of suppliers, they are fulfilling PPN06/20 MAC 3.1 (diversification of supply chains) or PPN 002 MAC 3a (Create a diverse supply chain to deliver the contract including new businesses and entrepreneurs, start-ups, SMEs, VCSEs and mutuals), contributing to a more diverse, equitable industry.
At Thrive, we believe in bringing your supply chain along on your social value journey, so our supply chain reporting is free. If you’ve got trusted suppliers, could you help them improve their impact by sharing what you’ve learned?
5. Work to make the real estate sector a better place
The real estate sector lacks diversity in terms of gender, ethnicity, and social background – particularly in positions of leadership. Building a more inclusive industry is essential if we are to have spaces that work for everyone, as well as a more equitable workplace.
PPN 06/20 MAC 2.2 (Employment) and PPN 002 MAC 6a (Create employment and training opportunities particularly for those who face barriers to employment) talk about engaging with groups who are under-represented in the workforce. By providing guidance and training to people who may find it harder to enter the industry we can start to level the field – and address skills gaps too.
Thrive customer British Land is a commercial property company with a strong social value and sustainability focus. One of their many initiatives is Broadgate Connect, an employment and training partnership with the charity East London Business Alliance (ELBA). By connecting businesses with a diverse pool of local talent, it has so far connected over 400 residents in Hackney and Tower Hamlets with employment opportunities.
These and many more real estate businesses continue to set a powerful example to the industry, showing what can be achieved with a focused social value strategy in place.
Dealing with people and places means the real estate sector is in a uniquely strong position to make a difference. If you’d like to understand how much more impact could you have by prioritising your social value offer, contact us for a chat, we’d love to help.
Mary-Louise Fellowes
Marketing and Analytics More articles by Mary-Lou >
