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Community engagement in real estate is where landlords, property/building managers and occupiers seek to better engage with the local municipality, landlords, occupiers and general public. Community engagement can span a variety of topics from investments in public realm improvements to engaging with schools, prioritising local employment and suppliers, recruiting apprentices, charitable donations, and environment, social and governance (ESG) education programmes.
Since the adoption of the Social Value Act in 2012, ‘social value’ has also emerged as a well-used term within the industry. Based on principles that aim to improve health, wellbeing, quality of life and communities [1], social value is the expression of a positive social change in terms of money – pounds and pence. Assessing outcomes through a financial proxy is useful as it further legitimises initiatives in our capitalistic society and provides a relatable and comparable metric for business and policy makers.
So, how does community engagement dovetail with social value? In its simplest form, community engagement is a programme/activity aimed at generating positive social outcomes. Social value is the process for measuring its impact on society, where possible expressed in market prices.
Why bother with any of this?
From a landlord’s perspective, community engagement is a valuable exercise to undertake as it can increase the value of assets and make areas more safe, attractive and vibrant for communities and occupiers, as well as improve the visibility and understanding of ESG issues. This in turn helps to make communities and occupiers healthier, happier and more productive.
It is important to note that not all community engagement activities can be quantified in terms of market prices. For example, the £ payback of building knowledge of sustainability within communities cannot be as easily quantified as creating local jobs, or apprenticeships, or giving charitable donations, which can feed substantial sums of money back into the local economy. Efforts to quantify social value in terms of market prices should focus on those initiatives where it is feasible and where it can be done robustly.
However, community engagement is a small part of the wider social value agenda. An array of other topics should be considered including, but not limited to, energy and water efficiency, tenant engagement, placemaking, accessibility and occupier health and wellbeing. In respect of energy and water efficiency measures for instance, if you are implementing energy performance and water saving initiatives at an asset level you are effectively driving affordability for your tenants.
Social value and community engagement also tie into impact investing, which is “investing with the intention to generate positive, measurable social and environmental impact alongside a financial return” [2]. Where it generates social and environment impact, community engagement can be a key tool in impact investing. Social value can provide a useful means of measuring and evidencing ‘impact’, particularly where it is used to quantify the socioeconomic benefit of your investment activities.
EVORA is supporting our clients to develop and deliver community engagement, social value and impact investing programmes and training workshops both in the UK and Europe. If you are interested in finding out more, please contact our ESG consulting team today at [email protected].
[1] Baldwin, C. and King, R. 2018. Social Sustainability, Climate Resilience and Community-Based Urban Development. 1st ed. London: Routledge.
[2] https://www.impactinvest.org.uk/
