Environmental, Social, and Governance, also known as ESG, is making a huge impact on the UK’s build-to-rent landscape. With tenants favouring sustainable developments, it’s become a big talking point in recent years. Here we take a look at ESG and what it really means for build-to-rent developers.

But first, what is ESG?

Simply put, ESG is a set of standards that measure a business’s impact on society, the environment, and how accountable it is. The UK government set a net zero target by 2050, so being eco-friendly is more important than ever.

What three components make up ESG?

Environmental 

‘Environmental’ is all about ways businesses can be more eco-friendly. Here’s how a build-to-rent developer can achieve this:

  • Invest in renewable energy and green infrastructure, like solar panels
  • Use recycled, sustainable materials including reclaimed wood or recycled steel
  • Provide green amenities such as electric vehicle charging stations

Social

The social aspect focuses on how a business impacts wider society and workplace culture. They can make a positive change on both by:

  • Ensuring products are safe and customer data is secure
  • Provide training and support health and safety
  • Invest in local community projects

Governance

Governance refers to the decision-making process and logistics of running a business. Examples of practices include:

  • Accurate reporting to stakeholders
  • Hold leaders and managers accountable for risk and performance
  • Promote diversity in any leadership team

Where do build-to-rent developers fall short?

In build-to-rent management service operation, it’s about promoting and entrenching a culture that puts sustainability, social value, and governance integrity first.

Most build-to-rent developers fall short by spending too much on green design features, like smart thermostats, but don’t track how buildings actually perform in use. Once tenants move in, data on energy use, carbon emissions, and waste is often incomplete or not reported.

Looking to meet your ESG goals? At Hybrid, we’ve got you covered. Get in touch with one of our experts to see how we can improve your business’s sustainability.