Spring 2021 Issue - 25

of contributing to tackling social or
environmental challenges, or both,
while generating a financial return.
However, there is no shared understanding of what constitutes social
value in the real estate industry.
Nor is there a common approach
to describing and measuring it: an
increasing number of frameworks,
tools, and methods exist to support
social value and the reporting and
measurement of investment impact,
but they can be difficult to navigate.
The report identifies six key barriers to creating greater social values:
l political, economic, and business
culture;
l fragmentation and a lack of alignment in decision-making across
different stakeholders;
l a focus on financial return expectations;
l a lack of consensus and
transparency;
l a focus on outputs, not outcomes; and
l a lack of knowledge and skills.
The report asks the real estate
industry to acknowledge its social
responsibility and its role in leaving
a lasting legacy in the creation of
social value, stating that for this to
be achieved across the industry,
creation of social value must span
the value chain and the life cycle of
assets. Good intentions must not
be lost in the transfer of projects
between organizations, teams, or
stages, and metrics might need to
be switched to maintain continuity
as projects move from planning to
construction and then to management, the report says.
The report provides the foundation for a road map for investment in social value by describing
actions needed to underpin strong
and enduring change in the real
estate industry and earn public
trust. The road map highlights six
categories of action:
l government-led place-based
vision and strategy;
l corporate leadership;

l transparency, accountability, and
data;
l innovation;
l education and training; and
l collaboration.
Because creation of social value
for real estate is by definition
place-based, the starting point is
for government to provide a vision
and establish sustainable development objectives and priorities, the
report says. Local, place-based
expectations and needs are best
articulated at the local government
level and created in collaboration
with residents, community groups,
and businesses.
" Leadership within my organization " was identified as the most
significant driver of social value
creation by survey respondents.
Prioritizing the creation of social
value requires a cultural shift
within the industry, the report says.
While impact investment has an
important role to play, ultimately
change will be driven by the mainstreaming of social value creation
so that social and environmental
factors become an integral part of
all development and investment
decisions. Leaders in social value
creation act in the belief that any
costs incurred in enhancing social
benefits will help reduce risk and
lead to higher long-term riskadjusted returns and sustainable
value creation.
A clear need exists for a better
and shared understanding of
social-value impact measurement,
management, and reporting among
industry stakeholders. Many methods of measuring social value exist,
as demonstrated in the report,
which provides a practical assessment of more than 100 tools, in
addition to bespoke tools and
approaches used by many organizations to fit their specific objectives. To encourage the creation of
social value, the industry needs to
use these tools more effectively,
engage in more transparent measurement, and employ more con-

sistent reporting frameworks with
external audits.
" As providers and stewards of
the built environment, the real
estate industry clearly has a clear
role to play in creating social
value, " says Lisette van Doorn,
chief executive officer of ULI
Europe. " However, the financialization of real estate-where property
is solely looked at through the lens
of being a financial asset which can
generate revenue and profit-has
led to a disconnect between financial value creation and social value
creation.
" COVID-19 is a wakeup call, and
while the pandemic has brought
major risks and challenges for the
industry, it also opens up opportunities to rethink how to repurpose
and connect real estate development and investment to local,
place-based needs. We need to
prioritize and consider the role of
the real estate industry in helping
tackle social and spatial inequalities. The key to enhancing social
value creation is redefining value
not just in financial terms, but also
to account for social, economic,
and environmental well-being outcomes over the long term. "
" It is vital that all sectors across
the economy ask how they create
societal benefit, " says Sarah
Forster, chief executive officer of
The Good Economy and report
coauthor. " The built environment
affects people and places in so
many profound ways, which is why
it is so important to explore the
potential role of real estate in delivering positive returns for people
and planet. We hope our research
enables the real estate industry,
through the Urban Land Institute,
to begin to consider how it creates
value beyond property values and
yields. We hope this is the start of
a journey that will enable companies to account for the contribution
they already make to wider society
and, more importantly, consider

how this can be enhanced in the
future. "
" Real estate is a business of
people and places, " says Eime
Tobari, director of COCREATIF Limited and coauthor of the report.
" Whether through investment or
development, decisions made by
real estate professionals shape
places and people's lives. I hope
our report helps organizations in
public and private sectors recognize
their roles in social value creation
and find opportunities to make a
greater contribution through collaboration and innovation. "
ULI's report highlights that
innovation, education, collaboration, and knowledge sharing are
all critical for driving change. Areas
identified in the report to focus on
include the design of new business and financial models that
embed the creation of long-term
social value, the development of
new investment products, and
the use of technology for spatial
analysis and data collection, as
well as innovation in governance
and policy.
Professional organizations will
have an important role to play in
knowledge sharing and in influencing the development of education and training programs, the
report says. Integration of social
value into real estate education
and training courses at all levels
will require a review of the fundamentals of investment theory
and of the dominant methods of
evaluating and pricing investment
opportunities.
Zooming in on the " S " in ESG
was funded and supported by
a select group of ULI members
participating in a steering group,
including CBRE Global Investors, Credit Suisse, Estabona
Management, Fore Partnership,
IvanhoƩ Cambridge, Jacobs, and
PLP Architecture. The full report
is available at europe.uli.org/
social-value. UL

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http://europe.uli.org/social-value/

Spring 2021 Issue

Table of Contents for the Digital Edition of Spring 2021 Issue

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Spring 2021 Issue - Cover3
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