The new EU regulation on sustainability (environmental, social and governance (ESG)) disclosures came into force on 19 December 2020 and will apply from March 2021 for all listed companies. Whilst it remains voluntary for other companies, including housing associations, the new Code of Governance places greater value on ESG reporting.
The new Sustainability Reporting Standards which have been developed for the sector have 12 themes and 48 criteria against which housing associations can assess themselves. Although housing providers already embrace reporting in relation to social value and their governance, and already meet many of the criteria, the one area largely overlooked is environmental.
Boards need to ensure that they are aware of the climate challenge for their business and develop a plan of how they will contribute to the Government’s target of net-zero emissions by 2050. Do you know what risks and opportunities your organisation face and how it will it manage them? Will you meet the 2035 target for EPC ratings on your asset portfolio? Do you know what your greenhouse profile is and have you got achievable targets in place to reduce emissions from your business activities and across your supply chain with science-based targets to demonstrate achievement? How do you manage pollutants and increase biodiversity? Have you got a sustainable approach to asset management and development, in terms of sourcing materials, waste management and water management?
Has the climate change discussion reached your Board room and has the Board identified, managed and mitigated the above risks?
It not just a compliance matter either! Your funders will now be looking for you to provide ESG performance to show delivery against your action plan; the cost of your capital will be linked to your sustainable targets and you will be presented with a raft of onerous questionnaires to provide the requisite ESG information, each funder will have their own set of questions which are not always relevant to our sector. Having ESG reporting in place will provide a solution. Will you be ready when your funders come to you? If you want to find out more about ESG reporting and what’s involved in the new Sustainability Reporting Standards, and what actions you need to take to be ready why not come along to the BDA ESG reporting Masterclass. Contact the BDA for more information.