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Why the Value of Health is on the Rise

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Oceania has had an impeccable record of sustainability leadership since 2009.

That is reflected by the Global Real Estate Sustainability Benchmark (GRESB) scoring of Oceania-based organisations.

In 2020, among 1229 real estate portfolios, Oceania’s average GRESB score of 77 exceeded that of any other continent.

Accordingly, the Australia and New Zealand real estate sector is positioned to make stronger commitments to an even more just and timely recovery from Covid-19.

This undoubtedly means ramping up actions to prioritise environmental, social and governance (ESG) measures with health as an elevated focus.

Oceania, a leading region for ESG in real estate, is also a leading player in the healthy building movement, based on the adoption of the WELL Building Standard from the International WELL Building Institute (IWBI).

In Australia, WELL’s market penetration in commercial real estate is demonstrated by real estate projects achieving or pursuing WELL Certification and organisations’ participating in the WELL Portfolio program.

In fact, we’ve found more than 20 per cent of all commercial office across the country are participating in a WELL program.

This is evidence of a shared mission of the Australian commercial office sector and IWBI to create people first places to advance health, well-being and equity.

Further, this approach is becoming a useful roadmap for Australian companies to expand and elevate ESG initiatives through buildings’, communities’ and organisational policies.

In light of the pandemic, we have an opportunity to reinforce that human health is related to all aspects of ESG, and it has a profound impact on corporate performance indicators—including productivity, engagement and resilience.

▲ The post-pandemic world gives us the opportunity to underline the importance of sustainable and health-focussed buildings.
▲ The post-pandemic world gives us the opportunity to underline the importance of sustainable and health-focussed buildings.

The investment community is increasingly incorporating new data and non-financial indicators, like ESG into their analyses to better understand risk and return, and to demonstrate value and impact.

As a result, human health is gaining recognition as a material factor impacting a business’ bottom line.

According to a report by KPMG, 86 per cent of Australians expect their investments to be responsible and rooted in ethics, with another majority aiming to shift their investments into ethical companies in the near future.

And based on a recent survey from Ernst & Young, 72 per cent of investors said they conducted structured, methodical evaluations of ESG disclosures, compared to 32 per cent just two years prior.

Globally, more than $35 trillion is being invested into ESG assets. It's no longer niche. It's now a competitive advantage used by investors all over the world.

In the earlier days of ESG frameworks and data, it was viewed as somewhat difficult to demonstrate high social sustainability performance.

However, efforts in healthy buildings and the positive impacts on human health, well-being and broader societal impacts are starting to become more prevalent within global sustainability benchmarking platforms and other reporting frameworks.

This has been pivotal to the growth of WELL in Australia and internationally.

WELL provides criteria to benchmark and measure building performance, with a focus on health and social sustainability outcomes.

Through performance verification of WELL features required to achieve certification, the program can provide a source of verified data to help support ESG reporting.

Ultimately, an achievement in WELL offerings can demonstrate to investors that human health and social sustainability outcomes are being prioritised.

How does WELL connect the dots among human health, real estate and ESG performance? The thread can be traced by looking into how WELL aligns with global ESG and impact or sustainability investment frameworks as identified to date by IWBI:

The United Nations Sustainability Development Goals: Across WELL’s programs being adopted in Australia, WELL maps to 16 of 17 SDGs and 52 of 169 SDG Targets. This means that 80 per cent of WELL is aligned with at least one of the SDGs.

GRESB: WELL aligns with nearly half of the GRESB 2020 Indicators and WELL Certification results in a full Tier One point for GRESB scoring.

Global Reporting Initiative (GRI): Based on an internal review and comparison with the GRI Standards, IWBI found that features in WELL can contribute to or impact the results of approximately one-fifth of the disclosures in the GRI Sustainability Reporting Standards, including approximately half of the topic-specific Standards in the social category (400-series).

IRIS+: Based on an internal review and comparison with the IRIS+ system, a comprehensive system for investors to measure, manage and optimise their impact from the Global Impact Investing Network (GIIN), IWBI found that features in WELL can contribute to or impact the results of approximately one-sixth of the metrics in the IRIS 5.1 Catalog, including almost half of the metrics in the Operational Impact category (OI-series).

While we await the 2021 ESG performance scores and disclosures under some of these or similar frameworks, organisations in Oceania, as well as forward-looking global leaders, have already adjusted their development focus through the lens of Covid-19 with a sense of urgency to act on health and social sustainability.

That’s good news for charting a more inclusive, just recovery. Investing for health is not just an investment in a company, but in its people.

And if there is anything we have come to cherish through this pandemic, it’s human health.


Author

Jack Noonan

VP at the International WELL Building Institute


The Urban Developer is proud to partner with WELL to deliver this article to you. In doing so, we can continue to publish our daily news, information, insights and opinion to you, our valued readers.

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Article originally posted at: https://www.theurbandeveloper.com/articles/why-value-of-health-is-on-the-rise-well