A group of Canadian socially responsible investment managers say that social performance should included as part of responsible investing in the real estate sector.
The group Monday endorsed a new code that establishes standards for how commercial real estate companies incorporate work principles into the procurement of property services, such as cleaning, security and maintenance. The move aims to signal their commitment to decent working conditions in Canada’s commercial real estate sector.
The Responsible Property Services Code has been endorsed by the Atkinson Charitable Foundation, the Canadian Labour Congress Staff Pension Plan, Glasswaters Foundation, Meritas SRI Funds ( OceanRock Investments Inc.), Stephen Whipp Financial, and the United Church of Canada. The new code is the result of a two-year process supported by the Atkinson Charitable Foundation that brought together Canadian investors, property managers, civil society organizations and workers to develop a labour code of conduct for the commercial real estate sector.
They note that Canadian pension funds have placed, on average, 8% of their total assets to real estate, worth approximately $104 billion. And, while real estate investors have shown a growing interest in improving the environmental performance of their real estate portfolios, they say that social performance has not received equal attention, “despite evidence of the opportunities associated with superior social performance in commercial real estate.”
“When workers are paid fair wages, receive full-time work, and have access to health benefits, training opportunities, and legitimate grievance mechanisms, worker productivity improves and companies experience lower turnover and absenteeism and lower risks of workplace accidents and injury,” says Shannon Rohan, director of responsible investment at the Shareholder Association for Research and Education (SHARE).
“This means that instead of spending time managing a revolving door of workers, property service firms can focus on delivering superior tenant services and property managers can focus on building better relationships with clients. Well attended tenants are more likely to renew leases and pay premium rents,” she adds.
The investors that have endorsed the code are also committed to communicating with fund managers and the companies they invest in, about the code and the importance of decent working conditions in property service supply chains for the overall performance of commercial real estate properties and property portfolios.
By supporting responsible contracting practices, fair wages and reasonable workloads for property service workers, we are protecting the value of our real estate assets and thereby safeguarding the stable income streams that we expect from these portfolios,” says Erik Mathiesen, president of the Atkinson Charitable Foundation.
Additionally, SHARE says that it will work to incorporate more social performance measures into the broader responsible property investing agenda and will continue to encourage Canadian commercial real estate companies to improve their contracting and procurement policies and practices.