With environmental sustainability now entrenched in the definition of corporate social responsibility, leading advocates for international development and industry standards urge real estate owners, managers and lessees to likewise consider human rights, worker protection and anti-corruption principles in all stages of buildings’ life cycles. Newly released guidance from the United Nations (UN) Global Compact and the Royal Institution of Chartered Surveyors (RICS) identifies key action areas to anchor real estate in a broader scope of ethical business conduct that promotes stewardship, transparency and legal compliance.
The resulting document, Advanced Responsible Business Practices in Land, Construction, Real Estate Use and Investment, examines how the development, operational tenure and decommissioning of a building reverberate in the economy, environment and human health and well-being. Beyond investors, owners/managers and occupants, workers in the construction sector and supply chains, and communities within a building’s sphere of influence are tagged as stakeholders.
“With this resource we want to show businesses how to operate responsibly and sustainably, generating substantial social, environmental and reputational value and long-term financial success in the process,” says Sean Tompkins, chief executive officer of RICS, which counts a worldwide membership of 118,000 urban planning, construction, real estate and property valuation professionals.
UN Global Compact principles
The UN Global Compact’s ten principles in support of human rights, labour, the environment and anti-corruption provide the foundation for a holistic methodology. The guide helps users to track business practices and decisions that have environmental, social and governance repercussions, see elements that may be missing in their existing corporate social responsibility policies, and recognize shared interests with other sectors and groups.
Many real estate organizations are already proponents of: a precautionary approach to environment challenges; initiatives to promote greater environmental responsibility; and the development and diffusion of environmentally friendly technologies — as the ever widening reach of programs like the Global Real Estate Sustainability Benchmark and REALpac/IPD Green Property Index demonstrate. So strategists see a global asset class like real estate as a particularly effective delivery agent of the seven other business and behavioural standards.
“There is a tremendous opportunity for real estate to become a driving force for a more sustainable financial, economic, social and environmental system through collaboration and collective action,” asserts Georg Kell, executive director of the UN Global Compact.
Businesses that have voluntarily agreed to uphold and enact the ten principles must be committed to protect human rights and vigilantly avoid any complicity in human rights abuses. The four labour related principles are closely aligned, calling on signatories to respect the right to collective bargaining, while disassociating from forced labour, child labour and discriminatory employment practices. Finally, businesses are expected to work against corruption, including extortion and bribery.
The RICS-UN joint project is one of the first efforts to tailor the application of the principles, which were introduced in 2000, to a specific economic sector. Accordingly, real estate’s status as a generator of wealth, employment and environmental impacts, venue of economic growth and space for human security, interaction and ingenuity would seem to inherently complement the UN’s mandate. Yet, both proponents stress that the industry doesn’t need another vague vision statement.
Mix of industry stakeholders
The guide’s authors also want to reach real estate end-users and their service providers who may be less attuned to corporate social responsibility factors outside their core business. “Within those companies for which real estate is not a core business, the resource will be of particular interest to: chief executive officers, boards of directors, chief financial officers, chief operational officers, human resources directors, senior risk and compliance executives, communications and marketing directors, and CSR and sustainability officers,” the guide’s executive summary promises.
Checklists for self-assessment are central to the exercise. The guide sets out five key issues, each with several related concerns and recommended measures, for the three stages of a building’s life cycle. Similar overarching themes appear in each stage — development, in-use and recovery/redevelopment — while addressing different circumstances and parties.
This is designed to prompt all stakeholders to see clearer connections between their roles and the overlapping outcomes of their actions. For example, the development phase looks at the process of land acquisition, the integrity of construction costing, treatment of workers, environmental stewardship and assurances of the quality of the end product — factors that will later bear on how users experience the building.
Ultimately, too, the RICS-UN process could help companies comply with their own corporate social responsibility reporting requirements and/or better position landlords to attract tenants with corporate social responsibility mandates.
“This is particularly true for real estate users,” the guide notes. “This group of stakeholders may occupy a building without taking an interest in or having an opportunity to access information about the building’s history. This includes how the land was acquired, which suppliers and materials were used in its construction, or whether any human or labour rights were violated in the process of its development.”
Barbara Carss is editor-in-chief of Canadian Property Management.