Few businesses pay more than lip service to their responsibility to the community, say experts
Timon Karamanos
Two years after Corporate Social Responsibility (CSR) began buzzing in the property industry’s ear, there is little evidence that investors are doing anything substantial about making their businesses more socially accountable.
“Property is several years behind most other industry sectors in terms of CSR,” says Professor Sarah Sayce, head of the School of Surveying at Kingston University.
It’s a view Andrew Rosenfeld, chief executive of central London developer Minerva, echoes: “The property industry has for too long made major investment decisions that have enormous impact on our environment and infrastructure that are based on little or no practical research. No other industry makes decisions on this basis.”
Earlier this year, Minerva announced it was funding a five-year London School of Economics research programme focusing on social issues.
Major players, including Prudential and Drivers Jonas, are also underwriting research that they believe will lead to buildings’ values being determined by sustainability criteria.
However, CSR-aware property players are the exceptions. “In a survey on CSR-related issues conducted in late 1999, we found that 78% of surveyors admitted their knowledge of CSR was limited or non-existent. That’s pretty staggering. And I would seriously question whether there’s been a significant shift since then,” says Sayce.
Indeed, when Estates Gazette asked five leading agents which of their clients were particularly active in CSR they drew a blank.
“This is not really an area we have come across,” was the typical response.
Although quoted companies including Land Securities, British Land, Hammerson and Slough Estates have been producing standalone environmental reports for some time, few have seriously tackled the other aspect of corporate responsibility: social issues.
Workspace is one. And this year, one of the big institutions – Prudential Property Investment Managers (PruPIM) – published one of the first reports to include a social element.
Aside from purely environmental issues such as emissions, energy efficiency and waste, PruPIM’s 36-page report tackles initiatives on citizenship in the community, business conduct and fair deals for tenants.
But even so, PruPIM head of research Paul McNamara, one of the report’s authors, readily acknowledges it is riddled with problems, the most serious of which has to do with performance measurement.
“We need a proliferation of standards and definitions,” he says. “Of course, people will be cynical if you just say you will set yourself objectives and then a year later say you have met them. But the more reports come about, hopefully the more scope we will have for benchmarking.
“We have to work together, as an industry,” he adds.
Whether this will happen remains to be seen. Land Securities’ head of environment Dave Farebrother, responsible for the company’s environmental reports, says: “There is not yet any uniformity in the way the property sector reports on its environmental impacts. Looking at the way other industries approach this, over the coming years we will see property companies publishing full reports that both identify and quantify their impacts.”
It is also difficult to prove the notion that, in the long term, CSR is not altruism but good business sense. Sayce says: “It’s pie in the sky to say that what’s good for the wider community is inevitably also good for shareholders. There will always be a conflict.”
President of the British Property Federation Liz Peace insists that her members “won’t be forced into window dressing and are hugely concerned that if they do something, they do it properly”.
She adds that she would be suspicious of companies claiming to have embraced CSR overnight. “It’s not a quick-fix issue.”
But with the wider investment community becoming ever more ethically aware, Sayce thinks time is running out for the property industry.
“This time, companies will realise that if they don’t climb aboard, they will be left behind,” she says.
