A NEW scheme, backed by more than 60 banks and housing associations, will help tackle the UK’s housing crisis.
Sovereign Housing Association, which works across the Thames Valley, says that the new sustainability reporting standard, focusing on ESG (Environmental, Social and Governance) has the power to unlock institutional investment, by addressing the lack of transparency, consistency and comparability that currently exists.
It is understood that social housing is the first UK sector to come together with lenders and investors to create a common standard, which will offer a blueprint for other sectors.
The ESG Social Housing Working Group compiled the report after being set up last year. The aim of the Standard is to provide a voluntary reporting framework for housing providers to report on their ESG performance in a transparent, consistent and comparable way.
This will make it easier for lenders and investors to assess the ESG performance of housing providers, identify ESG risks and opportunities to create positive social and environmental outcomes.
In all, 34 housing associations and 27 lenders and investors have come together to adopt the standards, and Sovereign, among others, will update their reports on an annual basis.
Lenders and investors, including Lloyds Banking Group, Legal & General Investment Management, M&G and NatWest, have agreed to use the standard in their investment and credit policies, processes and/or product design.
It includes 48 criteria such as affordability, fire safety and net zero carbon emissions.
The standard will be overseen by a new Social and Affordable Housing Sustainability Reporting Standards Board, which will be established early next year.
Tracey Barnes, chief financial officer at housing association Sovereign, said: “The Sustainability Reporting Standard will play a pivotal role at Sovereign in our approach to performance reporting, enabling further transparency for our customers, investors, and other stakeholders.
“As early adopters of ESG, this will clearly drive environmental improvements and assure Sovereign’s clarity as an organisation of social purpose.”