FM newsroom – ESG. We have already heard a lot about ESG and for sure we will for quite a while. Most of the time we focus on the Environmental and Governance elements, but what about the Social aspect? What does the S stand for in relation to properties?
ESG is the abbreviation of the English words Environmental, Social and Governance, a framework that is followed in a simplified way by companies in order to help combat climate change and sustainability with their daily operations while positively affecting their employees as well. While the environmental factor is often talked about in relation to sustainability, and the governance issues also seem to be more clear, the social aspect is only rarely talked about in depth. Realista.ingatlan.com now looked a bit closer at the subtle topic of the S.
What falls under the S?
Compared to sustainable solutions the social dimension of ESG took a back seat even though this has long been a fundamental aspect of the office market. It is enough just to think about companies’ labour practices, health and wellness initiatives, diversity and inclusion, and community engagement, or simply put: a massage chair, a running track on the roof of the office building, medical packages, joint barbecues, team buildings, accessibility and more.
Large global companies also have a diverse workforce worldwide, which strengthens inclusion. But here we can also talk about ergonomic furniture, the spread of the WELL system, and the social work of companies, for example painting a kindergarten fence or planting trees where there is none yet.
Looking at the big picture, we can also talk about complex relationships in connection with the S-aspect like the effect the built environment has on the quality of our life. It is also a social benefit when an abundant office park built next to a residential area can be used not only by office workers but also by visitors to the green areas for relaxation and entertainment. In large cities, many office parks or workplace campuses are therefore accessible to local residents.
In terms of welfare services
It is not only the employer but also the office building itself that has to deal with welfare services. A corporate centre of several thousand square meters can still be designed with a fitness room or a gym, but in the case of smaller rental properties, the help of the office building comes in handy to create these types of rooms in the common areas. The already mentioned rooftop running circuit is also connected here – Realista.ingatlan.com points out.
Developments with a social purpose also include factors such as the quality of indoor air, and the accessibility of the outside space, i.e. is there a cool green terrace or even a roof garden where we can breathe fresh air. And then we haven’t even talked about the indoor botanical gardens or the care of special office plants.
Owners must present valuable data
In order to comply with the social criteria of ESG, owners must present more and more authentic data to satisfy the needs of both tenants and investors. We can now think that this does just that: the property owner numerically describes the fitness equipment, the square meters of the public park, the proportion of paleo food available in the restaurant and the weekly working hours of the masseuse. Not really.
Complex systems have already been developed to demonstrate how a building can function in order to preserve the quality of life of the residents and the community. Here comes climate change again, as weather-related events often quickly have a negative effect on our sense of comfort.
In other words, the social dimension of ESG also includes community-oriented elements such as mitigating flood or fire risks and managing rainwater. For example, property owners can increase the canopy of trees to reduce air temperature or incorporate porous surfaces that trap moisture and thus reduce the risk of flooding.
All in all, the letter S represents an extremely complex set of conditions in practice, where we can list everything from a multicultural workforce to swivel chairs to settlement development solutions.