TALKING POINT
WHAT ARE THE SEVEN FACTORS FACING THE SOCIAL HOUSING SECTOR IN 2022? It is no secret that the environmental, social and governance (ESG) agenda will be one of the dominant themes for the built environment. And whilst the social housing sector has led the UK property industry in defining the ESG landscape, there is much registered providers will need to embrace this year. Winckworth Sherwood’s Charlie Proddow points to seven things social housing providers will need to consider in the year ahead.
1. Sustainable finance – affordable housing first Rishi Sunak at COP26 set out his vision for the UK to be the first “net-zero-aligned financial centre”. Financial institutions and investors will need to deploy capital in a way to help the UK meet its net-zero commitments. There are natural synergies between affordable housing and sustainable finance, but upcoming regulations will need careful consideration to avoid discussions about greenwashing. All social housing providers, their funders and asset managers will soon be required by law to make ‘sustainability disclosures’ at some level. They will need to understand changes to legislation in 2022.
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These disclosures will be confirmations about their business and its impact on climate change and other sustainability issues. Any RP seeking funding will ultimately need to show that they are having a positive impact on the UK’s sustainability agenda in a measurable and quantifiable way.
2. ESG – governance in the spotlight The ‘G’ in ESG will be a new focus for senior executives throughout 2022. A series of consultations on the implementation of ‘E’, ‘S’ and ‘G’ will exercise minds as organisations work out how to implement, measure and report on ESG initiatives. It is
important for organisations to participate in this process, rather than rely solely on industry sector representative bodies, as the ESG system is designed to encourage bespoke ESG programmes for each organisation rather than treating ESG as another topdown accounting standard or the adoption of existing sector approved governance models. The challenge for housing associations will be to imbed organisational year-on-year ESG improvements through new vertical governance models. This includes the governance of joint ventures as well. In 2022, this will involve how governance issues will be scoped, adopted and reported to deliver environmental and
Charlie Proddow is a Partner in the Social Housing and Real Estate Team at Winckworth Sherwood.
social outcomes beyond financial sustainability compliance.
3. ESG – retrofitting and stock swaps Retrofitting housing stock is likely to prove expensive and challenging for many housing associations fuelling a wave of stock rationalisation programmes. Stock disposal and swap programmes have been largely driven by geographic considerations allowing housing associations to better manage homes, often as a result of mergers. That will undoubtedly continue in 2022. However, housing associations are facing significant costs in meeting building safety requirements and the
