Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
In the realm of sustainable investing and corporate responsibility, the term ESG has garnered significant attention, becoming a trinity of factors that investors and businesses are increasingly considering to measure the ethical and societal impact of their operations. While Environmental (E) and Governance (G) aspects have often taken the spotlight, the Social (S) dimension is equally crucial, especially in sectors like real estate, architecture, and urban planning, where human interactions and societal welfare are deeply intertwined with the built environment.
The Social dimension of ESG reflects how a company or a project contributes to the well-being of society, including its employees and communities. It emphasizes a commitment to human rights, labor practices, community engagement, diversity, equity, and the overall impact on society. In the context of real estate, the social dimension extends beyond profit generation and includes the positive effects that a development can have on the people and community that inhabit and interact with it.
Real estate development plays a pivotal role in shaping the dynamics of a community as change agents. Forward-thinking developers recognize that their projects have the potential to enhance the quality of life for residents and contribute to the improvement of the broader social fabric in a city. This involves considerations such as affordable housing, accessibility for people with disabilities, and promoting community spaces that foster interaction and a sense of belonging. A socially conscious city involves creating environments that encourage inclusion, safety, and sustainable living. This might entail mixed-income housing developments that not only curb gentrification but also foster diverse and vibrant communities, social cohesion, and mutual understanding. It also includes providing green spaces that promote physical and mental well-being and integrating renewable energy sources to reduce the carbon footprint.
Forging human-centric spaces
Architecture, as the art and science of designing spaces, has a profound impact on how people experience their surroundings. Incorporating the Social dimension into architectural practices means prioritizing functionality, accessibility, and creating spaces that consider the psychological and emotional well-being of users. It is well known that designing buildings with ample natural light not only reduces energy consumption but also improves occupant mood and productivity. Biophilic design has been shown to reduce stress, enhance creativity, and improve overall quality of life.
From green roofs that provide communal spaces to innovative use of materials that improve indoor air quality, architects also have a key role in crafting spaces that are not only visually pleasing but also nurturing for their occupants.
Paving the way for inclusive cities
This leads to urbanism, which should be at the heart of the social dimension. As the world becomes increasingly urbanized, creating people-centric cities becomes imperative. This involves designing urban spaces that prioritize pedestrians and cyclists, encourage public transportation, accessibility, access to safe public spaces, and green infrastructures.
Pedestrian-friendly neighborhoods based on the 15-minute city concept not only reduce traffic congestion but also promote social interaction. Creating affordable housing near workplaces can significantly improve the quality of life for the workforce while minimizing commute times. Additionally, urban planning that safeguards historical landmarks and integrates cultural spaces helps to maintain a city’s unique identity.
Challenges and the road ahead
Despite the growing awareness of the importance of the social aspect within real estate, challenges persist. Balancing the financial viability of projects with social impact can be a major task. In addition, measuring and quantifying the social benefits of a development often involves qualitative and materiality assessments, as well as stakeholder involvement, which makes it more challenging. Places that do not demonstrate strong social values through civic engagement have been shown to experience lower engagement and productivity. In fact, effective community engagement leverages tools that value diversity, equity, and inclusion.
However, the future is promising. Collaborative efforts among stakeholders including developers, architects, policymakers, and local communities can drive positive change. Innovations in technology enable more accurate monitoring and assessment of a project’s social impact in time. Investors are increasingly recognizing that a project’s long-term success is intertwined with its positive contribution to society. Consequently, the GRESB Real Estate benchmark offers transparency to the efforts and commitments that companies are currently undertaking and presents an essential pathway for those companies that wish to embark on this social journey. GRESB values strategies and objectives that integrate ESG principles while helping to identify those material social aspects that can still be integrated into overall day-to-day management practices.
In conclusion, the social dimension of ESG is a critical aspect that shapes the realms of real estate. Building sustainable communities requires a holistic approach that prioritizes not only profit but also the well-being and inclusion of the people who inhabit these spaces. In an era where the built environment significantly impacts well-being and societal dynamics, integrating the social dimension into these sectors is not just a trend but a necessity. By weaving social consciousness into the very fabric of our cities, we pave the way for resilient, equitable, and thriving communities.
This article was written by Lucía Andérica in collaboration with Mariana Pallares, both Sustainability Managers at Mace Group Spain.
References
- 15-minute concept city
- The 2016 Deloitte Millennial Survey: Winning over the next generation of leaders, Deloitte 2016
- The Civic 50: Best Practices in Corporate Community Engagement, The Conference Board 2015
- The 2016 Deloitte Millennial Survey, Germany – Country Report, Deloitte 2016
- The Inclusive Design Canvas. A strategic design template for architectural design professionals, Zallio 2022