In focus

How we’re pushing for more transparency on sustainability in the housing associations sector


Housing associations have a clear social purpose and impact, yet sustainability reporting is not widespread across the sector. This means they are potentially missing out on opportunities to demonstrate strong environmental and social performance to investors.

We engaged with 17 associations in the UK to better understand their environmental and social credentials and to encourage them to report against the Sustainability Reporting Standards for Social Housing.

What is a housing association?

It is a not-for-profit company that provides a range of affordable social housing to low-income earners or others who may need financial support.

Profits are re-invested, rather than paid out to shareholders as would be the case in many for-profit companies. It could be invested in community services or regeneration, as long as the money is being used to achieve a social purpose.

Housing associations support nearly six million people across England, according to the National Housing Federation.

How does social housing relate to the UN’s Sustainable Development Goals?

Most obviously, social housing plays a role in achieving Sustainable Development Goal (SDG) 11: “Sustainable cities and communities”. But it also contributes to other perhaps less-obvious goals.

For example, living in an affordable, proper and safe home can help people move out of poverty (SDG 1), contribute to better health and well-being (SDG 3), enhance the performance of children at school (SDG 4) and employees at work (SDG 8), and help reduce inequality (SDG 10). It can also help lower energy consumption (SDG 12) and improve access to affordable and clean energy (SDG 7) – both of which contribute to tackling climate change (SDG 13).

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How can investors assess the environmental and social merits of a housing association?

Prior to 2020, there wasn’t a common reporting standard that could be used across the industry to demonstrate how housing providers were performing from an environmental and social perspective. This made it difficult for lenders and investors to properly evaluate a housing association’s risks and opportunities around these factors.

Last year, a working group composed of housing associations, investors, and a number of other organisations published the Sustainability Reporting Standard (SRS) for Social Housing, following a public consultation.

What is the SRS?

It is a voluntary reporting framework, covering 48 criteria across a wide range of environmental and social considerations. It enables housing providers to report on their environmental and social performance in a standardised way, allowing lenders and investors to meaningfully evaluate them.

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Schroders was an early adopter of the initiative and has committed to using the standard in its investment process.

Today, close to 100 organisations have either adopted or endorsed SRS, according to the ESG Social Housing Working Group.

How has Schroders broached the issue with the associations?

We wrote to all 17 housing associations within our investment universe to ask them to adopt the SRS.

Organisations were unwilling to start using the criteria until the next reporting cycle – something we had anticipated. So we asked housing associations to provide information on a subset of environmental and social metrics that would help us understand how they are currently performing on key issues. 

These were aligned with the criteria set out in the SRS.

What was the outcome?

Fourteen housing associations responded.

Two had already adopted the SRS and were able to provide promptly the information we required from their public reporting.

Twelve organisations provided information via our survey. Of these, eight said they intended to adopt the new SRS, three were still deciding and one was in the process of developing its own ESG framework and so had decided not to adopt the new standard.

How has this helped Schroders’ investment teams?

The information gathered through this engagement has strengthened our understanding of the opportunities and risks associated with investing in these organisations. It has been incorporated into the credit team’s investment process and helps us accurately assess the environmental and social merits of the businesses.

In particular, the responses to our questionnaire generated a deeper understanding of their energy efficiency and carbon intensity. Besides providing information that hadn’t previously been available, the answers helped spark valuable conversations about the most appropriate metrics to use, particularly in measuring carbon intensity.

As the results have been incorporated into the environmental and social credit ratings of each housing association, the process has helped us differentiate between leaders and laggards.

We will continue to engage with the three organisations that have not yet responded to our request.

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