Why the Overlooked S in ESG Matters

Zach Flora, executive vice president of market growth at Fitwel, describes S as the side stage door at a theater that doesn’t garner as much attention as E and is harder to define. Frameworks like GRESB successfully monitor ESG in real estate, but it can be hard to identify core metrics.

 

“One thing we know is true that we see across all of Fitwel’s users … is that they are all tying health and wellbeing to that S concept,” Flora said. “The health and wellbeing of our employees [and] our ability to engage stakeholders in our community are important for us.”

 

While not inclusive of all aspects of ESG’s social, Fitwel helps clients define S from a health and wellbeing perspective and offers a framework to measure, invest and report on it. 

Chely Wright, chief inclusion officer at Unispace, says they have developed a strategy around Unispace’s ability to tell a story as an end-to-end firm specializing in the strategy, design and construction of people-centric spaces. They metabolized that information to launch Unispace’s Art for Impact (AFI) program, which matches clients with nonprofit groups and community artists to bring their inclusivity goals to life in the workplace. One notable initiative was connecting Orrick, a global law firm, with LA-based artist Robert Vargas to highlight the mission of the nonprofit A New Way of Life in Orrick’s Los Angeles space. Unispace also partnered with the NGO Casa Congo and the Nicaraguan women’s collective Las Tejedoras to transform 50,000 ocean plastic bags into office art for clients. AFI uses art and community engagement to communicate that everyone is welcome in the workplace and create a more inclusive and engaging culture.

“When we think about ESG and how it can and should be impacting workforces, I think we should talk about impacting beyond the four walls of a company’s built environment.”

 

Sara Karerat, managing director at the Center for Active Design—a nonprofit arm of Fitwel, noted the overlap between the environment and social components of ESG. 

 

“I think of S as an opportunity to strengthen the E as well,” Karerat said. “When we think about every building having a landscaping budget, how can we think about this in a tangible way to have the broadest co-benefits? If we prioritize maintenance and tree canopies, those are two strongly proven approaches to improve mental health for a restorative environment and lower the temperature in the surrounding environment.”

 

Prioritizing the S should assess the culture and what matters to existing talent and potential talent. Wright urges organizations serious about attracting and retaining talent to lean into the S. So how do you do that? 

1. Find a way to organize a human resources/executive team to ask questions and be willing to use that information and take action on it. 
2. As an organization, do not be an “Askhole”—if you ask questions about doing good, be prepared to act on what you learn. 
3. Take meaningful action.

Once a company decides to focus on the S, it needs to ask questions to understand the values of employees and clients. Sometimes companies declare their ethos, but may not collectively reflect it, Wright said. Unispace offers two paid volunteer days—one personal and one team—to encourage people to give back. That shared experience and value proposition creates a team value and culture for the organization. 

 

Employee Resource Groups (ERGs) are farm teams that provide access to leadership opportunities where those opportunities are not otherwise available. ERGs empower people to leadership roles who can showcase their organizational acumen and garner attention from leadership for future promotions.

 

Owners and managers can collaborate with stakeholders to optimize tenants’ experiences by incorporating design elements to boost the user experience. Fitwel’s framework identifies interventions and strategies to prioritize based on specified goals, which owners can leverage to link intervention strategies with value creation.

 

“Building managers are meant to engage with tenants of their buildings and are widely integrated into their lives and experiences,” Flora said. “They gravitate toward certain strategies like incorporating tree canopy, or adding landscaping or biophilic design because it’s something tangible employees and residents engage with daily.”