How property and placemaking businesses can embrace ESG and be a force for good
Written by Andrew Taylor, PR and content director, Freshfield.
From developers and local authorities to architects and investors, more organisations working in property and placemaking are building their businesses around the positive impact they can have on people and communities through having strong ESG credentials.
As a business that is driven by impact, being part of placemaking and community improvement projects is something close to our hearts. We can see the tangible, positive impact such investment has on people, lives, and communities.
While the idea of ESG (environmental, social and governance) is not new, the term has come to the fore in recent years. This is partly due to the rise of ethical or socially responsible investing, where investors support businesses that provide positive social change in addition to financial returns.
For many, ESG has replaced CSR (corporate social responsibility) as the buzz term for businesses that do good, but what is the difference between the two?
Differences between ESG and CSR
It’s often said ESG is CSR grown up. In the nineties and noughties, CSR used to be about upping recycling rates, reducing vehicle emissions, or raising money for charity. In other words, it was an add-on to a company’s main operational activity. It was often more about reducing harm, than making radical improvements.
ESG is about embedding a purpose-led cause or mission within the actual business strategy. It considers a wide range of stakeholders, while criteria for achieving ESG goals are set, measured, and reported on.
How do you embed ESG in your business?
Here are some tips that businesses of all shapes and sizes can apply to help them become more purposeful.
Focus on the ‘why’
If your organisation was established with a specific environmental or social purpose in mind, such as providing green roofs to support energy efficiency in buildings and encourage biodiversity, asking ‘why’ is a straightforward question. For companies looking to move towards social impact, the question to find the answer to is ‘why does my business exist outside of the aim of being financially successful?’.
This often happens within maturing businesses where owners have been successful and are now looking to give something back. You must understand what issues and causes are most important to you and what role your business can play in making the situation better.
This is easier when the cause is aligned with your business model, for example a property developer that commits to helping local agencies eliminate poverty and homelessness.
Lead from the front
Like anything in business, if something has buy-in from the very top – owners, shareholders and executive management – it’s going to get done. Therefore, a commitment to ESG must come from on high. It’s not something you can delegate.
For the more hard-headed business owners, it’s worth remembering that creating a purposeful business with ESG goals at the core not only has a positive impact on the world, it has many business benefits, including better employee engagement, increased customer loyalty and more appetite from investors. Evidence of ESG is something many large organisations are increasingly looking for as part of their tendering processes.
Think big, even if you’re small
ESG is not just for large companies listed on the stock market. Even the smallest firms can embed ESG principles in their business. The property and development sector arguably has the biggest role to play, dealing as it does with land management and the built environment.
Can you create an ambitious vision for how you want your business to achieve real change over the next five years? How can you go above and beyond merely what’s required under building regulations or planning law? Create the vision and work backwards to establish ‘how’ and ‘what’ your business needs to do to achieve this.
Measure and report
To be meaningful, ESG needs to be measured and reported on. This will involve having SMART goals. For example, rather than a property developer committing to make buildings greener, it might say “All our new buildings will be net carbon zero by 2025”, or “From 2023, all our office developments will achieve biodiversity net gains”. Having a robust measurement and reporting framework for your ESG activity makes success far more likely.
Review and evolve
Your ESG activity will change and evolve over time. It’s important to constantly review what you are achieving, what’s important to you and your business, and how the scope of activity can be widened to other areas once success has been achieved in one area.
Freshfield has a team of property, placemaking and regeneration communications specialists that work with developers, local authorities, investors, architects, surveyors and planners.
Please contact Andrew if you need to discuss a specific project.