We’ve had a virtual coffee with our Social Invest lead and Director of Social’s London office, Luke Cross, to get to know him a little better and find out more about what ESG is and why it matters.
Everyone’s talking about ESG and sustainability in the finance world.
Put simply, ESG is the consideration of environmental, social and governance factors when making investment decisions.
Some of that is about aligning values between investor and investee, with an ESG framework or standard that helps people measure and compare performance.
And a big part of that is around risk, and understanding how material external factors, such as those concerning climate change or social issues, are being measured and managed.
But many see ESG as having the potential to go further and do more. Businesses are increasingly using ESG to tell a wider range of stakeholders and the world about their values and how they’re measuring up when it comes to people and planet.
If you’re thinking about engaging with funders, new or existing, then you should be thinking about ESG. From a finance perspective, ESG might enable you to attract a wider pool of funders, and you may see some marginal gains on loans and funding transactions. But to a large extent, it’s more about what you’re risking if you don’t have an ESG story to tell, particularly as it goes mainstream.
In our core sectors of placemaking, housing and the built environment, issues like sustainability, wellbeing and social value are central.
And these are the areas that the financial sector are taking a much greater interest in. So ESG reporting really is a natural fit – subject to your data, processes, strategy and communications being in good shape.
Our message is that ESG is more than a reporting tool or a set of metrics.
More businesses are using it to reflect on their own performance, and seeing it as something they should embed in their processes and culture.
In some cases it’s already bringing together strands of their business – or people in their business – who may have been a little siloed in the past.
But it can also be used to help frame their narrative, talk about their values and tell their story in a more cohesive and compelling way than they ever have done before. That in turn may help them engage a wider range of stakeholders including funders, employees, residents and customers, communities, partners, clients and suppliers, along with central government.
If you’re a business leader, the message to people in your organisation is simple: ESG is everyone’s business.
I lead our new business division Social Invest, which supports purpose-driven investment in the UK placemaking and built environments by helping investors and businesses tell their story and define and amplify their positive social and environmental impact.
I’m very proud of my time as editor of Social Housing magazine. I worked with some great people to grow the brand editorially and commercially, while staying true to the magazine’s roots as an authoritative and trusted financial publication. No mean feat in this climate!
My family and I went through something relating to my health in the last six months that’s fundamentally changed our lives. So I’m doing my best to live by a simple mantra: make it count.
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