Why ESG is no longer an 'optional extra'
Tabitha Perry, Member of the LH Group ESG Committee , 13 November 2020
The global coronavirus pandemic and climate change emergency have undoubtedly accelerated the Environmental, Social and Corporate Governance (ESG) movement, bringing into sharp relief the importance of the societal impact of businesses. This includes greater scrutiny of what steps businesses are taking to prioritise sustainability to combat climate change, and more recently, the contribution they can make in the face of hardships brought about by Covid-19.
Even before covid-19, the real estate industry, which produces circa 30% of carbon dioxide emissions worldwide, was embarking on a period of seismic change. The transforming environmental, political, and social landscape, as well rapid advances in technology – coupled with the extraordinary shifts in our lifestyles as a result of coronavirus - are altering the way we build and our relationship with where we live, work, and spend our leisure time.
This in turn has implications for how we approach ESG. At Long Harbour, we recognise the importance of ESG, and it has been a core guiding principal in our day-to-day work for a significant period of time. We are continuously exploring ways to stay ahead of the curve by developing our ESG strategy and giving it greater prominence within the business. In 2019, we set revised short, medium, and long-term objectives across the group. These include:
- Publicly displaying our ESG performance
- Developing sustainability due diligence checklists for new acquisitions and refurbishments
- Targeting net zero carbon across our Build to Rent (BTR) portfolio (we first initiated this process in 2019). Fawley Waterside, our development near Southampton, which we obtained planning consent for in 2020, will be a net zero carbon smart city.
- Delivering WELL certifications across the BTR portfolio, piloting with one of the assets.
WELL certifications help to improve the health and well-being in buildings for people. We plan to roll out across just one of the assets in the first instance, as an educational process and to ensure we maximise lessons learnt for future certifications and buildings.
Progress is tracked against these objectives by our official ESG committee, which oversees compulsory ESG staff training to make sure all Long Harbour employees are aware of our commitments in this space. The Long Harbour Group ESG committee is an internal group of employees from across all of the group’s companies and is chaired by Long Harbour Chief Operating Officer, James Aumonier.
We also carried out a materiality review which included engaging with key stakeholders to develop a two-year strategy to ensure we exceed our targets and meet stakeholder expectations.
We are proud of the progress we have made and some of our highlights include:
- Being accepted as a signatory of the United Nations Principles for Responsible Investment (UN PRI)
- Developing a community engagement strategy with Way of Life, Long Harbour’s bespoke in-house BTR management platform
- Carrying out feasibility studies on the BTR portfolio to explore ways in which we can achieve net zero carbon
Alongside our commitments to driving greater sustainability across our business, the Long Harbour ESG strategy also places a huge emphasis on the importance of community engagement – something which rapidly came to the forefront when the pandemic hit in March.
In response to the Covid-19 outbreak, we took immediate steps to identify those who may be vulnerable and living in one of our properties to ensure they had extra support available to them around the clock. As our buildings are located in populous areas, often near hospitals, our resident management company, Way of Life, offered free accommodation to NHS workers, either as existing residents of the building or as local individuals looking for a temporary space to self-isolate whilst working on the frontline. Eight of the participants in the scheme have now signed up to stay in the apartments as permanent residents.
Long Harbour also has a long running charitable programme, which is run by our Charity Committee. It is a priority for us to ensure that the charities are being supported at this time and to ensure staff are still able to engage with the charities, albeit in a slightly different way – given public fundraising and volunteering has been paused. We have held full company calls with both of our current charities (Principal Charity, Spires and Staff Selected Charity, CALM) to ensure we can continue to roll out a virtual programme that suits Long Harbour’s staff, the charities and the people and communities they support.
As we look ahead to 2021, we will continue to develop our ESG strategies based on lessons learnt and our increased depth of knowledge. Early in 2021, we will report to the UN PRI for the first time and continue to develop specific ESG policies for each of our individual investment programmes.
These are just a few examples of how we are putting ESG at the heart of our business. As one of the leaders in the residential real estate sector, we have ambitions not only to fulfil our ESG commitments, but to lead the way in delivering innovative initiatives that protect the environment, improve the communities in which we operate, and generate economic and social value for their investors and tenants.
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