Fitwel®, the global healthy building certification and data insights platform, launched phase two of its groundbreaking new solution that, for the first time, quantifies Social performance by overlaying health research and financial data to identify strategies that have the greatest impact on stakeholders and asset value. Phase one was successfully piloted last year in collaboration with sustainability advisor, EVORA Global, enlisting an exclusive first cohort of some of the largest commercial real estate owners and asset managers worldwide. This portfolio-scale certification pathway has proven to be essential for substantiating “S” data for real estate, addressing the growing demand – driven by both investors and forthcoming regulations – for a rigorous and standardized approach to integrate “Social” metrics, including health and wellbeing measures, into ESG reporting. Social Performance by Fitwel will receive recognition by GRESB for 2024 reporting.
First introduced in 2023 under the name Certified Metrics, Social Performance by Fitwel realizes the potential for an entity-wide ESG solution by offering a complimentary pathway to Fitwel’s asset certification, effectively addressing a prominent market gap. Together, the existing asset-level certification and Social Performance provide 100% portfolio assessment, allowing asset managers and investors to:
- Generate portfolio-wide insights for social and material risk;
- Optimize asset performance by generating gap analysis based on S criteria;
- Report on goal-based performance with third-party certified data;
- Compare performance to industry peers;
- Include all assets in certification assessments.
Fitwel has begun rolling out Phase 2 of Social Performance. For more information and to become an early adopter, visit fitwel.org/socialperformance.
The initial pilot of Social Performance was led by Fitwel Leadership Advisory Board (LAB) members, including BGO, Harrison Street, Hudson Pacific Properties, Lendlease Americas, PGIM, QuadReal Property Group, and Vornado Realty Trust, and expanded to a larger pilot cohort, including Barings, Kayne Anderson Real Estate, Fabrix, and others.
While voluntary ESG reporting has become the norm, nearly half of investors find the ‘S’ to be the most difficult ESG factor to codify, analyze and embed into investment strategies, according to a 2022 Deloitte Survey. At the same time, in the European market, anticipated reporting regulations will require more stringent reporting standards for ESG metrics, particularly as commercial real estate companies in Europe prepare for their first round of Corporate Sustainability Reporting Directive reporting.
The new social solution is the result of years-long analysis by Fitwel’s non-profit research arm, the Center for Active Design, on the economic impacts of the evidence-based strategies included in the Fitwel Standard. This resulted in the identification of a subset of strategies with the greatest impact on not only occupant and community health, but also material risk and financial value.
“Social Performance by Fitwel is the only certification pathway applicable to all real estate assets and designed to measure and track the Social performance of real estate funds on an entity scale. Together with EVORA Global and the first cohort of pilot users, we have made it possible to clearly define the value of Social strategies, providing structured insights to inform continuous improvement for stakeholders – an industry first,” said Joanna Frank, President & CEO of Fitwel. “Social reporting will become as commonplace as environmental reporting in the coming years, and we’re thrilled to accelerate this transformation right here at MIPIM, the largest global stage for commercial real estate in the world.”
Philippa Gill, Executive Director at EVORA Global, added: “We are delighted to be working with Fitwel on such a critical step forward for the real estate sector. Every building has been created for people, whether to live, eat, work or shop, and the new Social Performance portfolio methodology now allows investors and managers to understand and track the human and financial impact of social measures.”
Social Performance by Fitwel in Action
Pilot users from a diverse range of real estate investors and fund managers provided invaluable input which enabled the product to be ready for a full public launch.
QuadReal Property Group, a long-time strategic partner and Fitwel investor, was a first adopter of Fitwel’s social solution, Social Performance, as a pilot user, providing invaluable input to help craft a market-ready tool for the industry.
“Through thoughtful placemaking, QuadReal contributes to the resilience of local economies by creating spaces that improve health and wellbeing. Buildings are a vital component of a healthy society and we are committed to improving environments that support individual and community wellbeing. The Social Performance report by Fitwel is one way we can dive deeper into understanding the health aspects of our portfolio and how it compares to peers,” said Jamie Gray-Donald, Senior Vice President, Sustainability & EHS at QuadReal. “We have been an early user of the Fitwel certification program to support our approach to health and wellness and Social Performance provides the benchmarking summary. It allows us to continue refining specific health-promoting initiatives across the portfolio in a thoughtful and strategic way.”
Fitwel & EVORA at MIPIM
Joanna Frank and Philippa Gill will both be attending and participating at MIPIM 2024 at Palais des Festivals convention centre in Cannes, France. Joanna will be speaking on a panel session titled, Demonstrating Social Impact: Leveraging Qualitative Research for Effective Communication and Reporting on Thursday March 14th at 11:10am at the Make It Happen Stage (Palais 3).
