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The membership body representing investors with £10 trillion of assets under management has called on UK housing associations to significantly expand their reporting on ESG and performance metrics, and enhance their investor communications.

The Investment Association (IA) has last week published updated guidance for HAs in the debt capital markets, setting out investor expectations around communications, ESG and performance.

HAs have raised nearly £34bn of debt in capital markets in the last decade and IA members include all the major asset managers in sector.

The Governance and Disclosure Guidelines for Housing Associations Seeking Funding from Capital Markets report says: “Transparency is essential for issuers of securities in capital markets as this has an impact on investor confidence, impacts pricing in secondary markets, and affects the ability of issuers to attract a broader investor base.”

The IA last published guidance to the sector in 2017, when it put a particular focus on communications channels and more regular engagement with the investor community.

The new guidance reiterates those core messages but also calls on far greater disclosure of ESG and performance information. That comes as new regulations require investors to be clearer about the ESG performance of their investments, through frameworks such as TCFD. However, there is a particular focus on the quality of homes and retrofit, which is likely to also stem from the constant flow of stories of disrepair in the social housing sector.

On ESG, the guidance says HAs should report against the Sustainability Reporting Standard for Social Housing as a minimum.

It also requests regular, more granular KPIs including:

Regular Key Performance Indicators (KPIs):
? Void/vacancy rates and re-let times
? Rent arrears levels
? Affordability metrics
? Losses due to repossession.
? A breakdown of rent and sales levels
? Performance of other commercial activities

Details of properties, including construction and remedial works:
? Size and value of undeveloped land
? Number of properties under development
? Inventory of type and age of all properties
? Percentage of homes with an up to date fire risk assessment
? Details on any properties that do not meet the terms of the UK Government’s Decent Homes Standard
? Percentage of units affected by issues requiring remedial works.
? Granular breakdown of reasons for remedial works, and in particular details on cladding issues remaining.
? Scale, cost (paid and outstanding), and expected timelines of work.
? Number of leaseholders impacted

Environmental disclosures
? Emissions data under SCOPE 1, 2 and 3
? Percentage and location of properties with EPC ratings (metrics for new builds, existing builds and overall)
? estimated capital expenditure required to achieve at least an EPC C rating on all properties by 2030 in line with government decarbonisation targets.
? Details on climate reporting and status in accordance with the TCFD Reporting Framework, including plans to achieve Net Zero by 2050.
? uniformity of reporting to allow for benchmarking against prior year(s).

Social disclosures
? percentage of tenants on Universal Credit
? Customer satisfaction.
? Breakdown by age and ethnicity of complainant to identify potential for discriminatory treatment
? Gender and ethnicity breakdown of:
? Employment data
? Pay gap information on directors, management and employees
? qualitative discussion of social impact, and efforts made by Housing Associations to support tenants.

Secure asset disclosures

? Issuers should publish on their website relevant information on secured assets for all types of financial security. Such disclosures should include:
? By pool: Details of encumbered properties, including value
? The last valuation, and the date of the next valuation. Securities should be revalued every year.
? Any changes in properties in the pool.
? Details on the volume and value of unencumbered properties, and their ability to be charged.

While not directly applicable to equity and retail debt, the IA says Has should see the FCA Handbook’s Disclosure and Transparency Rules (DTR) – which set out the standards that issuers of equity and retail debt must adhere to as part of their ongoing disclosure requirements – as standard market practice.

The guidance also reiterates some of the messages from 2017, including concerns that in the past investors have been inadvertently made insiders by housing associations and a renewed call for
“an explicit channel for communication with investors.”

It recommends publishing all relevant information via the HA website, both in relation to investor updates and ESG.

Luke Cross, director at Social Invest, which supports HAs across the sector on their ESG approaches, investor communications and websites, said:

“Most of us know that different investors want different levels of engagement and disclosure.

“This latest guidance calls for a level of transparency that some may see as surplus to requirements, but which every finance and treasury team should be heeding, reflecting and acting on to some level.

“We’ve been saying for some time now that ESG offers a great opportunity for the sector to tell its story and engage with investors and wider stakeholders – and that the Sustainability Reporting Standard is an invaluable part of that journey.

“But it’s also been clear that expectations around disclosures will only heighten as more sustainability-focused regulation and legislation hits the ground.

“It’s up to each individual HA whether they want to get on the front foot now or take a wait and see approach.”

Chris Evans, director at Newbridge Advisors, added: “The housing sector has recognised the opportunity that ESG-linked and sustainable finance offers, and is making strong progress with its ESG and sustainability reporting.

“But it is vital we continue to listen to the investor community and continue to align our disclosure to that of other sectors who rely on the capital markets.”

More from Social:

How is the HA doing on investor comms? See our analysis of HA investor websites here.

Social and Newbridge work with housing associations across the country with:

  • ESG advice, reporting and communications
  • Investor comms and relations strategy
  • Design, development and content for Investor relations websites

If you’d like to discuss this guidance and how your organisation can respond, contact us at

More from the IA:

  • You can see more on the IA here
  • 2022 guidance here
  • 2017 guidance here