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 ever-changing landscape of ESG, so often the focus is put on environmental change and the shifting guidance around governance. With EU regulations on the likes of the Sustainable Finance Disclosure Regulation (SFDR) changing for light green and dark green funds, and the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards developed by International Sustainability Standards Board (ISSB) growing in strength, governance is no longer a goal or a target, performance is essential.
But in the context of social value and environmental responsibility, are we really paying the right price for resident engagement? Or does there need to be more investment in the ‘S’ of ESG?
Social value: Where the value really lies.
“Social value is the benefit to the economy, communities, and the environment from commercial investment. It has huge potential to shape how people experience places, so the built environment sector has an important role to play.” (Future of London)
The industry is busy discussing resident engagement and social value. Specifically, the impact real estate can have on surrounding communities and the quality of life for those living in our assets. So, in the context of sustainability and creating a better, healthier world, how do you harness social value and really make a difference?
According to the Social Market Foundation, maximizing social value in real estate can lead to a five percent uplift in the market value of an asset. That alone proves there is true value in prioritizing the ‘S’ in your ESG strategy. But beyond the bottom line, social value needs to sit with the communities your assets will affect – the people.
This could be initiatives on site that help improve resident retention or opportunities to enhance employability locally for residents; it could be events on site that help improve the mental wellbeing of residents; it could be volunteering for local charities in the area; or it could be offering incentives. Ultimately, it is about engaging with residents and local communities, understanding what they want and need, and then ensuring assets being built or retrofitted are solving problems residents might have; in other words, giving back. And if done right, The Social Value Portal and National Social Value Taskforce estimate that “there is a potential to generate an additional £30 billion in social value in the built environment.” (UK GBC)
Resident Engagement: Stimulating community and change.
“Only eighteen percent of student residents thought they could make a significant impact on the planet…” (Utopi Market Validation Report, 2024)
When it comes to engaging residents on sustainability, you have to first understand the needs and wants of your residents. In the case of purpose-built student accommodation (PBSA), so many of these residents have left home for the first time, and this first living experience outside of their family home is filled with anxieties and unfamiliar experiences. For some, those unfamiliar experiences could be heating a room versus cooling a room, as so many students study and live abroad for university. Regardless of those stresses, if social value and engagement are built into multi-tenant real estate, sustainable communities can be curated with ease. Because it is not an added burden but a familiar exercise in their everyday life, social benefits can be seen from day one. For maximum impact, engagement needs to come in three key phases:
- Inform: Build trust, become a name they know is active both in their real estate and in their new lives. Boots on the ground, face-to-face conversation is the best way to do this.
- Engage: When familiar, then it is about engaging this audience. It is not about brand awareness now, but about hooking them in to take action from now on. This could be gaining a follow on socials or signing up with an email, but it is creating a call to action for the audience based off that trust. Appeal to them and their habits and needs, and make sure you customize communications to that societal group.
- Educate: Finally, it is about offering value to residents. Facts and knowledge are key to helping them grow, and ensuring you offer them the tools to make a difference. They want to be educated and to be empowered to make a difference, so gamify actions and reward good behavior. It should be fun, after all!
It’s all about building trust, being familiar and understood, and then stimulating community so that change will come. Ultimately, unless you invite residents to be part of the conversation, it will be hard to gain long-term engagement. The old saying “people buy from people” comes to mind: residents are the same – bring them into the conversation, allow them to be in control of their interaction, and then empower them to take action.
In the case of environmental responsibility, there is so much noise around global warming and climate change – you have a short window to really hook their attention. Make it about gamification and empowerment, and you build yourself a community of movers and shakers, as well as a team of ambassadors.
How, then, are some in the PBSA industry using this engagement for environmental good?
The Price of Connection: A case study
“Social impact also ranks highly as a key millennial priority. Deloitte found that a majority would take a financial sacrifice for the opportunity to make a difference, and 62% of millennials said they would take a pay cut to work for a company that has a net-positive social impact.” (UK GBC)
Learn how a top student operator used resident engagement and social value to reduce their energy consumption and improve education around environmental responsibility.
When it comes to reducing your energy consumption and reducing carbon emissions in the PBSA sector, there are a lot of things to consider: data and insights, education, and to really make a difference on your environmental impact, it is all about engaging your residents.
Our client is a leader in PBSA, a leader in quality accommodation, and also a leader in their approach to engaging their resident communities. So, when Utopi and ASK4 partnered with them to help reduce their environmental impact, it was no surprise their teams actively took on the challenge. Their site teams, running an asset in the south of England, took on the task to engage residents with higher-than-average energy consumption, and used relationships and incentive to foster an improvement in behaviors:
“It’s about having nice conversations, it’s about educating our residents, and there has never been any animosity between us, which is great. We also now talk every day, which is so nice! We’ve built a community approach to this and that’s been great to see.” (Site manager)
Breaking down the context of one resident’s consumption journey:
Situation: Student’s room averaged 17.2kWh per day electricity consumption in November (2023) with an average temperature of 27.8°C.
Task: The site team were sent a monthly report from Utopi of high consumption and temperature spaces and identified this space as a top outlier.
Action: The site team knocked on the student’s door, discussed the energy consumption with them, and helped educate them on what changes could help the planet. Student echoed they’re keen to work with the site team, to regularly check in on progress, and was super keen to bring their consumption down.
Result: Student’s consumption reduced to an average of 10.3kWh per day in January, a reduction of 6.9kWh per day on average. Their average temperature also reduced to by 3.4°C to 24.4°C in January.
Ultimately, the student’s daily reduction of 6.9kWh over a 30-day month would be enough energy to drive from Southampton to Amsterdam in a petrol vehicle. And without a proper understanding for their needs, their wants, and their lifestyle, this wouldn’t be possible.
A positive example of the ‘S’ in operation, working alongside the ‘E’ in ESG.
In essence, by embracing the social dimension of ESG, organizations can drive meaningful change that extends far beyond financial returns. By creating vibrant, sustainable communities where social responsibility is ingrained in everyday practices, we can pave the way for a brighter, more inclusive future for generations to come.
This article was written by Ben Roberts, CGO and Co-Founder at Utopi.
References
Scott Corfe and Linus Pardoe, “Social Value Roadmap for Real Estate.” Social Market Foundation. Accessed May 31, 2024.
“Unlocking Social Value: How to unlock social value in housing and regeneration.” Future of London. Accessed May 31, 2024.
“Utopi Market validation report 2024.” Utopi. Accessed May 31, 2024.