How companies are baking social value into their real estate
Organizations are beginning to use buildings to do good
As strategies to make real estate more sustainable mature, companies are starting to integrate social value initiatives alongside their environmental goals.
Social value, the short- and long-term value that the built environment creates and delivers for the communities around, is far from a new concept but it’s one that many companies struggle to address fully.
Only 10% of those surveyed in JLL’s recent Responsible Real Estate: Social Value survey are focusing on all seven key areas of social value through health and wellbeing, community engagement, diversity, equity & inclusion, employment and skills, responsible procurement, nature & biodiversity and net zero carbon goals.
While companies are aiming to deliver on ESG targets, social value activities can feel further away from an organization’s core business, and therefore less of a priority, says Dr Marie Puybaraud, JLL’s Global Head of Research for Future of Work.
“It’s clear that decision-makers would like to do more, but the perception that it takes wide scale investment and major strategic commitment is creating a gap between ambition and action,” she explains.
Furthermore, many companies are focusing on environmental aspects amid rising pressure to show tangible progress in line with evolving expectations from shareholders, employees, customers and society at large.
While the net zero transition remains critical, successful strategies must consider it in tandem with broader social development goals, says Tim Wedemeyer, JLL’s Head of Sustainability Best Practice in APAC.
“It’s vital to take a joined-up approach as environmental and social elements are all interlinked. If you fail in one area, your overall governance and matrix score go down too,” he adds.
Social value in action
Adding green spaces is one way to deliver strong benefits to both local communities and the environment. By 2025, 40% of corporates plan to complete biodiversity projects with 33% intending to create green spaces for public use.
Wedemeyer points to CapitaLand, whose 280 meter skyscraper CapitaSpring in Singapore’s central business district, is designed to bring an array of biophilic health benefits to its community of residential tenants and office workers, including an edible sky garden and rooftop urban farm.
Some actions can be as simple as forming partnerships with local businesses or restaurants to offer discounts to employees. “It costs little, connects an organization to the community, delivers economic benefits and elevates social value,” says Puybaraud.
Sharing private space for public purpose – something 43% of those surveyed are doing - is another low-cost example of using the built environment for social good.
In Dubai, a global bank lets farmers hold a weekly market in the company’s lobby, and while this supports local growers and their families, it simultaneously contributes to employee wellbeing by providing access to healthy food with a low carbon footprint.
Elsewhere, stakeholders across real estate are joining forces to add value to the wider community.
In Washington D.C., for example, a public/private partnership called Washington Housing Initiative (WHI) is aiming to deliver affordable city housing and family neighborhoods for key workers in the ‘missing middle’ – those who face rocketing rents but don’t qualify for housing assistance.
“Investors, developers, occupiers and city authorities are starting to work together to deliver greater social impact, not just in their buildings, but across communities via placemaking,” says Wedemeyer.
In the UK Aviva and property developer Stories recently agreed £100m venture, partnering with landowners to optimize existing property assets for social good, while Schroders Capital has announced an impact investment strategy for affordable homes, workplaces and mixed-use town centre re-purposing projects, to address social deprivation and inequality.
What gets measured, gets done
Despite emerging consensus about what social value priorities are, corporate decision-makers are less confident about how to measure them.
Globally, almost a quarter of organizations reported a lack of standardized reporting and consistent data, plus difficulty measuring success, as their biggest barriers. It makes justifying company resources challenging, as more qualitative social benefits often go beyond organizations’ four walls.
“Success can prove harder to track - but it’s not impossible,” says Puybaraud. “A quarter of our survey’s respondents are already collecting real time data and using advanced analytics for their future social value strategies.”
Construction company Lendlease developed a robust quantitative and qualitative methodology using inputs, outputs and impacts, to measure the sustainable return on investment from its £2.5bn (USD $3.1bn) regeneration project, Elephant Park.
Over five years, it calculated that every £1 invested equated to £6 of social and economic impact, generating £36m (USD $44.3m) of total benefit. Activities included providing affordable rents and mentoring support to local small businesses, while creating jobs for more than 1,600 local London residents - over 900 of whom were previously unemployed.
As social value-driven initiatives become more numerous and their results more visible, companies will come under growing pressure to show how they’re working with, and making a difference to, communities around them.
“Social value isn’t about quick wins or gimmicks,” says Wedemeyer. “When planned holistically alongside environmental goals, it’s about delivering lasting positive change for communities, cities and companies while building resilience for tomorrow.”