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As the third greatest creator of CO₂ emissions in the UK, behind energy and transport, the construction industry’s challenge to meet net zero isn’t going away. The demand for action is increasing, and institutions like housing associations are being asked what they are doing to meet the 2050 net zero goal.

In parallel, the finance landscape is changing. In years gone by, lenders and investors were typically most concerned with the local impact on employment and supply chains, whereas now the trend is moving towards environmental, social, and governance (ESG) focused reporting. To demonstrate impact, historic and current data are needed.

This shift in priorities created a multitude of ESG frameworks, resulting in reporting that lacked transparency and was prone to inconsistency. Housing associations would often be asked to complete ESG questionnaires consisting of different questions – many of which were irrelevant to housing.

In response to this, the Sustainability for Housing (SfH) group established the Sustainability Reporting Standard for Social Housing (SRS).

What is the Sustainability Reporting Standard for Social Housing?

Designed to create a universal reporting standard for housing associations and local authorities’ ESG activities, the SRS facilitates improved dialogue between borrowers and lenders.  

It is a voluntary reporting framework that covers 48 criteria across ESG considerations such as affordability, carbon emission and energy efficiency, safety, equality, diversity and inclusion, and resident voice.

The initiative is helping the social housing sector to promote best practices and communicate with key stakeholders and aims to ultimately attract more investment into the sector.

Since its launch in November 2020, more than 130 organisations – a mix of housing associations and funders – have signed up to the SRS either as adopters or endorsers.

It remains the only comprehensive ESG reporting standard designed for the UK social housing sector and has been developed with the expertise of professionals in the sector.

Key developments concerning the SRS

During several months in 2023, the impact advisory firm, and SfH secretariat, The Good Economy managed a consultation process to inform the launch of version 2.0 of the SRS.

As part of this, a series of in-depth interviews were conducted with housing associations and funder adopters of the Standard. This was supported by a public consultation that garnered responses from around 40 organisations, including the Investment Association.

The process also addressed specific queries and concerns, such as consistency and methodology for calculating Scope 1, 2, and 3 emissions, whether or not to include ESG ‘golden metrics’, and questions around verification and assurance.

Version 2.0 places an even greater focus on sector priorities, and resident issues in particular, with specific questions aimed at improving transparency around how adopters are dealing with the issues of damp and mould in the sector, along with questions around net zero targets and a greater focus on equality, diversity, and inclusion (EDI).

The most recent update also helps the sector keep pace with relevant international frameworks. The Standard has been updated to align with frameworks including the Task Force on Climate-Related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), and the Streamlined Energy and Carbon Reporting (SECR).

Next steps for the SRS

Housing associations and local authorities are being faced with many issues including the cost of living crisis and poverty, fire safety, and damp and mould, and there is much political focus on what they are doing.

However, SfH believes that net zero is likely to be the biggest issue of all for years to come and highlights the increasing political focus on the ‘S’ as well as the ‘E’ in ESG.

The organisation has also introduced an expectation that housing providers report year-on-year results. Many housing associations are developing sustainability strategies, and this framework will help them demonstrate their performance over time. Annual comparisons also allow other stakeholders such as residents see how their landlord is performing.

Adopters will also need to adhere to a ‘comply or explain’ approach in their responses. For instance, where they are unable to report against all criteria, they are expected to outline the steps they are taking and the timeframe within which they expect to be in a position to provide the data.

It’s an approach that we can get behind. Our frameworks are designed to drive improved social value. Our process means that we carefully select suppliers that are aligned to key criteria relating to areas including economic impact, a commitment to using diverse supply chains and the delivery of clear community outcomes. We want clients that share in our vision, and a reporting mechanism like SRS is one way of monitoring and reporting on action, in a way that complements our own work.  

To find out more about the SRS, visit: sustainabilityforhousing.org.uk/what-is-the-sustainability-reporting-standard/