Responsible Property Investing and Property Management
A Research Collaboration from the Shareholder Association for Research and Education (SHARE) , the Responsible Property Investing Centre (RPIC), and the Carleton Centre for Community Innovation (3CI).
This research project looks at the impacts of labour practices in commercial property management on overall property performance. The project profiles a number of case studies to help property investors, companies and managers develop an understanding of best practices in the commercial property sector, examine the benefits that others have derived from adhering to high labour standards, and generally identify opportunities and barriers associated with explicit incorporation of labour standards into investment practice.
The purpose of this project is to examine the business case for good labour practices in commercial property management. The research and case studies will allow real estate investors, companies and property managers to better assess the role that strong employment policies and programs can play in the fulfillment of their fiduciary duties.
Background
There is a growing interest among investors internationally in how environmental, social and governance (ESG) issues impact upon the current value and long?term investment performance of the assets they own and manage. This investor interest has led to a number of conversations internationally looking at how responsible investing and ESG analysis applies to property investing. These conversations have put a spotlight on what has come to be called responsible property investing.
Responsible Property Investing (RPI) is a term that captures all the ways that investors can find and create value through improving the economic, social, and environmental profile of their investments. RPI means portfolio, asset or property management strategies that go beyond compliance with minimum legal requirements in order to address the environmental and social issues associated with property investing. RPI incorporates a multitude of dimensions related to property location, design and management as well as investment strategies.
An important dimension of responsible property investing is upholding fair labour practices. Unfair labour practices, or what have also been called precarious employment practices, are pervasive in real estate due to the high level of outsourcing and subcontracting that takes place in both property construction and management. Research has shown that high levels of outsourcing and subcontracting in commercial property management can negatively impact the quality and consistency of property services, such as cleaning, security and maintenance, with potential implications for tenant retention, market image and asset value. At the same time, unfair labour practices may have negative impacts on workers' employment security, their health and their ability to provide sustainable livelihoods for their families.
Internationally, important investor and multi?stakeholder initiatives have contributed to more responsible labour practices through the development of labour codes of conduct. In the United States, a number of public sector pension funds, real estate companies and property investment firms have developed responsible contractor policies to establish employment and contracting standards in the property service sector.
For more information, visit the Responsible Property Investing Centre website.
