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Social value is rising fast through the ESG agenda – but how can it be measured?

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As our industry progresses in its ESG journey, so will our understanding of just how to implement each of the environmental, social and governance pillars and the benefits to the whole spectrum of property users.


The E has been the primary focus for some time, bringing with it a raft of important changes in the way we report and implement sustainable solutions. It has also increased the awareness of environmental issues across the board including, tenants, owners, c-suite and particularly us in property management.

Recently, it feels like attention and questions have started to shift more comprehensively towards the “social” element of ESG, and for many of us, we’re on another exciting learning curve. Whereas it is usually common to be working out the economic costs and returns of the likes of solar panels, improved insulation or LED lights, the same can’t be said for quantifying the results of the social pillar.

Social value can be more qualitative and difficult to measure in a way that can be compared across assets and portfolios. So how do we turn the qualitative into quantitative data? And just how can real estate engage in the social side of ESG in a meaningful way?

Social is sometimes focused on the wellbeing of the people who interact with the property daily such as employees, facilities staff and visitors; but it is much more than that and also includes the impact the building has on the local community.

For many assets in the built environment there is more to be done to engage with the local area and make a difference. In property management we create opportunities for our clients to foster relationships between a property and the community. Initiatives we have include promoting local cafes and restaurants, inviting micro businesses to set up a stand in receptions and community outreach programmes, including charity partnerships. For tenants, this can look like employing people from the local area, creating a diverse workforce or initiatives to improve the health of its people.

Social Value Calculator

At the moment, this is generally accepted as a great thing to have, but there is little known about the economic impact it has on staff or the community. Here at Colliers we have developed a tool that enables our clients to measure the social and local economic value of a property and to use this information to create meaningful strategies to improve them. Our new calculator looks at putting a value on these initiatives using the Government’s National TOMs (Themes, Outcomes and Measures) framework.

The social pillar is all encompassing when it comes to jobs, growth and supporting people. From helping to reduce crime to supporting disadvantaged or vulnerable people into work and investing time or money into outreach projects that benefit the wider community. By putting a financial figure next to these measures, we are creating a tangible and comparable set of metrics that can be used to bring the social aspect of ESG to decision makers. It ensures that its importance can’t be overlooked and is worth significant attention, in the same way the environmental considerations are.

This accompanies a host of already known benefits of working in a building that has given social and wellbeing impact serious thought. These include the attraction of new talent and the retention of staff once they join. Particularly in this post-pandemic world, people want to work somewhere that is more than just as basic office. They want the space to provide something they can’t get when working from home. For owners and investors, improving the social value of your property can reduce voids and help attract new tenants, particularly in multi-let buildings where a sense of community amongst tenants is often sought.

Gone are the days when a building can only work for the owner, it must now have a purpose and understanding the social impact of your asset can help provide a valuable starting point and offer solutions that may previously not have been thought of. At Colliers we are using our new social value tool to help our clients be one step ahead, not only in implementation but in education around the often forgotten part of ESG.

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About the author
Andy Mercer is Head of ESG (UK & EMEA) for Colliers Property Management team. He has more than 20 years’ experience in commercial real estate sector and works with investors and landlords to protect the long-term value of their assets as they transition to zero carbon strategies.

To contact Andy, email Andy.Mercer@colliers.com


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Andy Mercer

Head of ESG

Sustainability

London - West End

Andy is the Head of ESG (UK & EMEA) within Colliers Investment Property Management group. He has over 20 years experience in the non-domestic property sector and has specialised in asset optimisation throughout his career. His experience includes healthcare, pharma, retail, commercial and industrial & logistics. Prior to joining Colliers, Andy was Head of Energy at JLL, and before that Director of Energy Services at CBRE.

In his role at Colliers, Andy is responsible for technical and commercial leadership across a broad range of ESG services that are designed to protect and enhance the long term value of real estate assets on behalf of investors and landlords. Including; transition to net zero carbon, environmental reporting and compliance.

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