Sharing social impact
A regular discussion at our marketing strategy workshops over the years has been whether or not I should get a Twitter account.
It has always been a principle of mine, and one I have tried to practise as chief executive of The Housing Finance Corporation (THFC), to speak when I’ve got something to say, rather then just when I want to be heard.
Sharing, however, is the dominant mode of communication these days on Twitter or other social media platforms, and now increasingly in the financial world with the trend of environmental, social and governance (ESG) disclosure.
In the numerous conversations I have with our housing association borrowers about ESG, a common question is why they should undertake the not insignificant work needed to adopt new reporting standards.
The hard-ball answer is, of course, because financial markets are taking sustainability, purpose and social impact more seriously than ever before and there is no virtue in being late to adopt new market conventions. But the rise of impact reporting, and corporate sharing, is also about the benefits of transparency and data in helping to channel private capital into ethical and sustainable aims.
Ever since the 2008 financial crisis it has become more and more obvious that success in the financial markets is too often divorced from the real economy, which faces two huge crises: inequality and climate catastrophe.
Yet it is also obvious that these crises cannot be solved without private capital. Governments should never be let off the hook and have a duty to fund affordable, sustainable housing. But we all know that they alone, already loaded up with debt, cannot fix the broken housing market. If we are to help direct private capital to the right places, to maximise social impact, then we all need to do a little bit more sharing.
That’s part of the reason why THFC published our Social Bond Framework. THFC has been issuing bonds with a social purpose since it was founded in 1987 to help housing associations access the capital markets. So I for one can empathise with those in the sector who might question suggestions that our sector is behind the curve on its reporting of environmental and social impact. The answer may be that the sector’s social purpose has gone without saying for far too long.
But we also see a great opportunity for THFC, and housing associations, in embracing the drive for social impact reporting, onerous as it may be. We have aligned the reporting requirements of our framework with the Sustainability Reporting Standards. This reflects our support for the new sector-wide ESG disclosure standards which we were involved with during its establishment and signed up to as an early adopter.
We didn’t have to look very far, or hard, to find tangible evidence of social impact. While writing the framework, we dug out photos of some fantastic developments by our HA borrowers that were supported by THFC lending. HAs themselves will have no shortage of examples of social impact to share with their funders – the challenge will be in striking a balance between qualitative and quantitative reporting.
What we share through the social bond framework will become data for analysts when looking at our bonds. It will ensure we continue to have access to a broad pool of investors while helping to secure low costs of funds for our borrowers. It will provide greater transparency about what we do at THFC, and give us the opportunity to articulate the impact we have better.
It is the sharing of this impact reporting which constitutes the demonstration of value. As a sector, housing associations are facing a number of complex and expensive challenges, from the cost of retrofitting stock, to the completion of fire safety works, while continuing to develop new affordable housing with limited grant funding. Private capital will be crucial to successfully overcoming these challenges, but investors increasingly want to know that their capital is going towards truly social and sustainable purposes.
This means measuring and sharing social impact. So the benefit of singing from the same hymn book is ever greater, hence THFC’s early adoption of the Sustainability Reporting Standards.
But although I’m immensely proud of our Social Bond Framework, and a convert to social impact reporting, I think I’ll still give Twitter a miss. It’s one thing sharing data on how many affordable houses our borrowers have built, but quite another sharing with the cybersphere what I had for supper last night.