Early adopters named as ESG standard launches to attract wave of new investment

“For this to be successful it does need widespread buy-in from the sector,” he told Social Housing. “It goes way beyond [just] those approaching capital markets. Some might think it’s the larger housing associations who might push disclosure standards, but banks are having to report on ESG and they’re starting to ask their clients, so this will permeate throughout the entire social housing ecosystem.

“If you can say you are a UK housing association and you adhere to these standards, this is a clear and easy ESG investment to make that exponentially increases the universe of people who can invest in you.”

Social Housing revealed at the beginning of October that 19 lenders and 37 registered providers had registered an interest in becoming early adopters to the standard. Today, the full list of more than 60 organisations that have now confirmed their commitment to adopt it has been released (see below), with the numbers continuing to grow.

A new board chaired by Susan Hickey, Peabody’s former chief financial officer, will oversee the standard. A governance steering committee has been set up to oversee the establishment of the board.

Lenders including L&G, M&G, Lloyds and NatWest have already agreed to use the standard in designing their investment and credit policies in relation to the sector.

Mark Davie, director of fixed income at M&G Investments, told Social Housing that M&G would start asking potential borrowers questions that have been laid out by the report from the start of the new financial year.

“Bank credit committees are asking [about ESG criteria] and so are our credit committees,” he explained. “Why? Because our ultimate investors, which are pension funds, annuity funds and life funds, are asking.”

“We’ll move to specifying ESG reporting for new lends [and] I’d have thought that will happen across the funding community,” he added. “Thirty-three funders have signed up to this, and the big banks and the big asset managers. We can’t sign up to it and do nothing with it.”

Mr Davie said that the standard would help social housing providers to expand their pool of potential funders: “One of the potential benefits to come out of this will be for the sector to attract a wider set of investors who have not invested in social housing before.”

He said that funds from Asia and North America in particular could be potential targets for investment once the standard is in place.

Update: at 09/12/2020 this article was updated to include the full list of lenders/investors and HAs who had signed up at 10 November, as the names continued to come through on the day following the initial morning version of this article. This was reflected in the print version of this article.