What Is ESG and Why Is It Important?

Posted by Ideal Modular Homes on 13th November 2020 -

Environmental, social and governance (ESG) is becoming increasingly important for the sector, but what is it and why is it important?

When it comes to investment and finance, ESG has always been important and refers to investment into an organisation and whether it has a wider social impact, instead of just generating profits.

Climate change affects all of us and has become more prevalent in recent times, so we’re seeing more businesses putting a focus into social value and their impact on the environment. This has also caused shareholders to be more careful about where they invest their money. 

UK social housing represents a socially responsible investment as it provides homes for those who can’t afford to buy their own. The industry is also trying to achieve net zero carbon emissions by 2050 so organisations will be pushing for more sustainable initiatives, ultimately making them more attractive for investors. 

Launched this week was a wider Sustainability Reporting Standard for Social Housing. This new standard, created by a working group of large housing associations and consultants, aims to unify the way registered providers present ESG factors within their business, thus making the information more accessible to investors. 

The new standard is important for the sector and hopes to capitalise on private finance seeking ESG investment. We have been in a housing crisis for some time now and the pandemic has only made the situation worse, as we’ve mentioned in previous blogs, investment is crucial to improve the housing stock and build more suitable, much needed homes that are fit for the future. This report will be crucial for facilitating more investment.