Back
News

Adding an H to ESG: Real estate’s role in delivering health equity

In 2020, just before the Covid-19 pandemic hit, the Institute of Health Equity published a follow-up report to Sir Michael Marmot’s 2010 landmark review into health inequalities in England. It explored just how closely health and life expectancy are tied to socioeconomic position and the conditions in which people live and work.

Some of the findings were bleak, underlining that health inequalities had worsened over the preceding decade. Last year, Legal & General partnered with Marmot to launch a charitable fund to address the issue. And group social impact and investment director Pete Gladwell believes real estate is finally starting to understand its role in helping solve the problem.

He told EG’s recent ESG Breakfast Briefing: “If you take Newcastle, where we do a lot of work, the average woman in 2010 had a healthy life expectancy of only 60 years. That has now come down to 56 years in the past 10 years. Healthy life expectancy in this country is going backwards.”

Gladwell and guests discussed the role real estate can play in turning the situation around, and asked whether the H of health can be brought in line with the industry’s existing ESG agenda. For Gladwell, there are three scopes – how businesses treat their employees, the products and services produced and provided, and how business influences communities and supply chains.

“I have been in real estate for 15 years now but I just don’t think we as an industry have engaged with it at all,” Gladwell said. “We know the implications of real estate on carbon. We don’t really know the implications of real estate on health equity.”

Cara Imbrailo, a partner at law firm Charles Russell Speechlys who acts for landlords and developers, added: “Real estate players have a responsibility to be looking at these issues, because it’s a good thing to do and also because they need to, to stay competitive. In the same way that green premiums and brown discounts are being hotly debated at the moment, health and the output that your building has is going to determine how attractive it is. Landlords and developers need to look at it from a future-proofing perspective.”

Small change, big difference

EG’s guests saw a clear link between the topic of health inequality and the broader ESG agenda, including the climate crisis. As Federico Montella, head of ESG and sustainability at Lambert Smith Hampton, put it: “The climate crisis is also a health crisis.”

“The health of the human population responds very directly to extreme climate events and is unfortunately affected negatively by it. This is a known fact,” he added. “If we are looking at the global map, then you start to realise inequalities are happening more in more vulnerable countries. We have to take that into consideration. We are also learning that there is a direct link between climate change and the spread of some diseases in geographical areas that were not affected before – probably not in the UK but we have to look at the global scale.” 

Solutions don’t need to be dramatic to have a sizeable impact, the panellists agreed.

“This may sound like a really nebulous topic but it’s even questions like: If you own a building, are you paying your cleaners and security guards sick leave?” Gladwell said. “If you aren’t, then they are probably going to be getting Covid and other diseases and still coming into the office, so you are perpetuating a situation where lots of people are getting ill because of the structural employment practices that you have put in place. There are social equivalents of just making sure you turn the lights off, small things that we as an industry can do that will genuinely affect people’s lives and address this health inequality balance.”

That sentiment was echoed by Jane Mudd, leader of Newport City Council. The council is a member of the Key Cities network, a group of 25 cities across England and Wales sharing best practice on the challenges of urban living, including health and wellbeing.

There are “incremental changes that actually make a big difference to people’s lives”, Mudd said, including greening public realms and encouraging “active travel opportunities”. But big or small, getting the wheel in motion calls for collaboration, she added.

“This is about the public sector, the private sector and third-sector partners coming together, because we can’t achieve any of this in isolation,” Mudd said. “What we know is that in dense urban environments, isolation increases, depression increases. And so we have to look at what we can do to try and address some of this.” 

Opportunities for connection

The pandemic has put that issue of mental health higher on the agenda, said Rob Charlton, chief executive of Space Group.

“I think there is a whole issue around mental health that we haven’t faced yet,” Charlton said. “A lot of people are working from home. I know everyone thinks it’s great and we are still in that period of really enjoying it. But I am sure we are building up an issue around mental health. We like to interact as people. And I think that is something further down the line that is going to be an issue. When someone is in the office, you can see how they are feeling and you can help them.”

The very design of workplaces can help here, said Divya Hariramani Herrero, associate director for sustainable design and wellbeing at Longevity. Herrero said she found herself “in awe” at initiatives such as the Lendlease-backed Loneliness Lab, which aims to “design out loneliness” from cities and the modern office.

“We need to create opportunities for connection because that is what we are really missing,” Herrero said. “What was so apparent during Covid is that we missed those interactions with the people we are working with, creating those spaces with an area where you can idle a bit. Then there is that opportunity when somebody comes up to you and says ‘Hey, can you help me with this?’ or ‘Do you want to grab a coffee?’ Creating those opportunities has been and is still slightly challenging. We are still sometimes missing the fundamentals of why we are coming into the office – to connect, not just to be working.”

And while building standards are an “incredible backbone”, Herrero added, they should not be relied on in isolation. “Just because you have a WELL building, doesn’t mean your building is an incredible place for health and wellbeing – there’s a lot of mix and matches that you can do inside these certifications,” she said. “We like to use them as a baseline, then understand the context of the building that we are working in, trying to have more stakeholder engagement, listening to the people.”

The residential sector also offers a huge opportunity to improve lives. “It’s literally a question of how do we invest, for us, the nation’s pensions and savings into improving the amounts and the quality of affordable housing,” said Gladwell. “Even the provision of genuinely affordable housing benefits health equity but so do things like retrofitting – if people can’t afford the fuel bills and they don’t heat the homes properly, that will dramatically reduce life expectancy. There is a lot of genuine injustice or inequality in this that we as businesses can address.”

The panel agreed that in all markets, it comes back to the notion of co-operation – across businesses and sectors. 

“For real estate to really be driving forward health and wellbeing, we need to be collaborating,” Imbrailo said. “We need to be sharing information, we need to be sharing case studies and feeding that back so that everyone gets on the same page. It’s promoting those examples of where we are seeing the impacts. That’s going to make change.”

 

To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews

Image © Edward Bruce-Radcliffe

Up next…