Social Housing Governance and Sustainability
In early November The National Housing Federation issued the ‘Code of Governance 2020’ for social housing providers and its members. It replaces the earlier 2015 Code. This coincided with The Good Economy ‘The Sustainability Reporting Standard for Social Housing’.
The latest Code provides a more transparent and consistent set of rules and criteria which can be adopted by housing organisations. It delivers an approach to governance frameworks and reporting that will be of far greater value to stakeholders including residents, lenders, investors, regulatory bodies and central and devolved government.
The Standard, which is voluntary, is designed to be used by both the social housing and financial sector. It provides for a consistent basis to implement and report ESG and sustainability in social housing.
What’s new in the Governance Code?
The 2020 Code reflects a change seen in other governance codes published recently toward greater stakeholder and community consideration and in this case evidencing wider social value, inclusivity, and environmental responsibility.
The Code explicitly addresses the social purpose function and funding models of social housing providers and the responsibility to protect and promote the interests of the residents and communities they service while maintaining public trust and safeguarding investment.
There is greater emphasis on equality, diversity and inclusion, environmental and social sustainability, the culture within an organisation, and accountabilities to stakeholders. Particularly a housing providers residents and customers.
The 2020 Code condenses eight principles of the 2015 Code to four core principles:
Within the Principles there are 15 additional governance considerations:
When to Implement the 2020 Code
Most organisations will choose to adopt the Code from the start of their 2021/2022 financial year. The board (and boards of subsidiaries) will need to consider and approve the adoption of the Code. A governance code change nearly always requires operational and resource expenditure.
How does the Code sit with the Sustainability Standard?
The purpose of the standard is to create a consistent comparable and transparent approach to assessing the ESG performance of housing associations. The Standard is over 12 themes divided into 48 Core or Enhanced criteria. The Standard explains that the Enhanced criteria may be seen as too challenging for small providers and therefore aspirational long-term goals.
Themes within the Standard chime with many of the objectives in the Code. Organisations may therefore decide it is beneficial to consider reporting against the standard when implementing changes to meet the 2020 Code.
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