Social goals are often viewed as the poor relation of environmental ones in real estate investing. The lack of focus is clear in industry benchmarks such as the GRESB Survey, where just 18% of marks in 2023 represented social goals, compared to the 62% assigned to environmental performance. Yet in today’s world where digital services allow working from home, shopping, and socialising online, presence in a particular place is becoming optional. Places need to serve people, as people can often find the same services online. In this context, focus on making buildings work for their users is more important than ever.
Given the limited consensus around measuring social impact, at DWS we have tested a methodology that combines top-down themes with bottom-up application to deliver social value for an asset’s stakeholders. The UN Sustainable Development Goals provided a good starting point for the top-down themes in highlighting the main societal challenges we need to meet by 2030. Matching these goals with our existing pool of projects and partners, we narrowed the list of 17 targets to 10 relevant themes. These themes were both achievable in a real estate portfolio comprising both residential and commercial sectors and were likely to make a real difference.
Our approach has resulted in a number of case studies which show the benefits of a more holistic approach to property management than simply focusing on the financial metric of success. Yet the experience has also highlighted the need to get the basics right in terms of good building design and effective management.
A plastic approach to social value: Diagonal Del Mar Shopping Centre, Barcelona
Diagonal Mar is a shopping centre in the portfolio in a prominent location close to the Mediterranean waterfront. Having visited the centre over the years, it is clear that access to the beach front is a key defining element of the centre’s attractiveness. Yet the declining health of the beach and marine ecosystems due to human activity is a growing problem. The density of plastic waste in the Mediterranean is four times higher than in the so-called “plastic island” in the Pacific Ocean. This plastic pollution is not only an unsightly feature of the beach in Barcelona but kills millions of animals and fish each year.
To help solve this issue, the local asset management team undertook several initiatives. Five volunteer beach clean-ups have taken place, involving over 100 individuals collecting 510kg of waste from the beach and seabed. The shopping centre has also sponsored a water quality measuring station as part of the SILMAR Project, a network of water quality measuring stations along the Catalan and Balearic coastlines with the aim of understanding the health of the area’s marine ecosystems. In addition, around 1,500 children each month have the opportunity to learn about and engage with the sea as part of the “un Mar de Jocs” children’s area in the centre.
Diagonal Mar has shown just how much property managers can do with a thorough understanding of local issues and the creativity to execute ambitious initiatives to address them.
There’s something in the air: KupkA, La Défense, Paris
Offices can be a challenging sector in which to deliver social value. The main obstacle is that landlord-controlled areas in the building are relatively small. However, as this case study demonstrates, social value can be created through quality building design that improves stakeholders’ everyday experience of the space.
In an office environment, air quality is not only affected by the pollution outside, but by volatile organic compounds (VOCs) given off by carpets, furnishings, and paint. The design of KupkA seeks to address these issues through using low-emitting materials that minimise VOC pollution inside. High ventilation rates and efficient filters help to circulate indoor air and ensure that pollutants are removed from air coming from outside. The result is a working environment that minimises long-term health risks for occupiers and visitors.
What next?
Our experience so far has shown the need to embrace heterogeneity in carrying out a social impact initiative. Top-down themes can give guidance but are futile without consulting with experts in an asset’s area who understand local problems and possible solutions. This may be the reason why industry-wide consensus on the appropriate frameworks for delivering social value is limited.
Our case studies have also illustrated the need to consider social value not just as a series of projects delivered by the asset manager, but as ensuring a building meets the basic needs of its users. Whether or not the heating works in a resident’s flat is likely to have a far greater effect on their wellbeing than an annual charity fun run. In this respect, social value is simply good property management.
