A European Framework for CSR in Social Housing

EURHONET – CSR TG – EURHO-GR® Handbook – Version: June 5th, 2013

EURHO-GR®:

a European framework for CSR in social housing

FOREWORD

TO BE DONE

SOME KEYS TO UNDERSTAND CSR AND THE PRESENT DOCUMENT

• Social housing organizations

There is no single definition and no unique model for “Social housing”across Europe. The “Social housing umbrella” actually gathers very different structures, ranging from small local non-profit charities to large corporations. In the present document, “social housing organizations” are understood as all kinds of public, private or cooperative landlords, recognized as providers of a service of general interest, whose mission is to provide decent affordable housingto households experiencing greater difficulties to access housing under the local marketconditions.In some countries, social housing organizations may also, in addition to “social housing”, provide standard “market housing”.

• Corporate Social Responsibility(CSR) or Social Responsibility(SR)?

CSR stands for Corporate Social Responsibility, which focuses on private companies exclusively. Indeed, the concept was initially developed in the private business sector. However, in recent years, Social Responsibility was broadened to all types of organizations -public companies, public authorities as well as non-profit organizations-, recognizing that all actors, all structures impact on society, and should therefore take on their own “Social Responsibility”. This is why the ISO 26000 standard (see p. XX) is entitled “Guidance on Social Responsibility”, and is clearly aimed at all kinds of organizations, regardless of their core mission, activity or legal status.

In the present guidelines, “CSR” refers to this larger meaning, encompassing both private companies and public or non-profit actors.

For more details on CSR definition, see chapter 1.

• Stakeholders

Stakeholders can be defined as all actors which are concerned by an organization’s activities and impacts, either because they can be directly or indirectly affected by them, or because can contribute and/or influence decisions and activities.

For more details on stakeholders, see chapter 1.

• Sustainable development

The most popular definition of sustainable development stems from the Brundtland report Our common future (1987): a way of “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Contrary to what is commonly thought, sustainable development does not only relate to environmental matters but also implies addressing social needs and economic constraints.

For more details on sustainable development, see chapter 1.

• Sustainability reports vs CSR reports

“Sustainability reports” and “CSR reports” both refer to organizations’ reports on their strategy, actions and performance with regards to their “Social Responsibility” (and thus their impact on and contribution to society and the environment). In all EURHO-GR® documents, we use the term “CSR reports” (or “Responsible activity report” when it is combined with the usual activity report).

For more details on CSR reports, see chapter 6.

• ISO 26000 Standard

CONTENT:

FOREWORD

SOME KEYS TO UNDERSTAND CSR AND THE PRESENT DOCUMENT

1CSR AS A RENEWED VISION OF SOCIAL HOUSING

1.1Defining CSR in the context of European public and social housing

1.2CSR as a way to revisit organisations’ relation to their Stakeholders

1.3Why engage in CSR?

1.4CSR: a continuous improvement approach

2WHY A EUROPEAN CSR FRAMEWORK FOR THE SOCIAL HOUSING SECTOR?

2.1Why a common framework?

2.2Why a European framework?

2.3Why a sector specific framework?

3WHAT IS EURHO-GR®?

3.1General presentation

3.2EURHO-GR® sections

4CSR REPORTING AND REPORTS: WHAT FOR?

4.1Putting key CSR principles into practice

4.2Beyond CSR principles: supporting CSR implementation and visibility

4.3Reporting within CSR implementation

5CSR REPORTING WITH EURHO-GR®:

5.1EURHO-GR® fundamental principles

5.2Setting up a reporting system

5.3CSR reporting steps

6CSR NARRATIVE REPORTS WITH EURHO-GR®

6.1Reports’ scope:

6.2The “Golden rules”

6.3EURHO-GR® Reports’ main content

6.4CSR reports or “combined reports”?

6.5Reports’ dissemination

1CSR AS A RENEWED VISION OF SOCIAL HOUSING

1.1Defining CSR in the context of European public and social housing

The concept of Corporate Social Responsibility (CSR) was defined by the European Commission in 2011 as « The responsibility of enterprises for their impacts on society »[1].

In the same landmark document on CSR, the European Commission further specifies how companies are expected toassume this responsibility:

“Respect for applicable legislation, and for collective agreements between social partners, is a prerequisite for meeting that responsibility. To fully meet their corporate social responsibility, enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of:

– maximising the creation of shared value for their owners/shareholders and for their other stakeholders and society at large;

– identifying, preventing and mitigating their possible adverse impacts.”

Based on this definition, CSR can be approached through three main perspectives:

- Sustainable development: whereas sustainable development refers to a global model, CSR can be seen as companies’ and organisations’ contribution to this system, through the implementation of its principles into their own business model and strategy;

- Transparency and accountability: answering for its decisions and actions, and their impacts. This is to be connected with the very first meaning and origin of the term “Responsibility” (from the Latin verb “respondere”);

- Ethics: CSR also implies, for an organization, adopting a respectful behaviour towards its stakeholders, and considering, in all circumstances, its actions’ consequences on others (be they employees, clients, partners, suppliers, etc.).

The first approach refers to core issues companies should consider and seek to address through their strategies and activities.

The other two relate to key principles of action and conduct that they should adopt and follow throughout all processes and interactions.

The European definition of CSR, focusing on impacts, highlights that all activities engender effects on society, positive and negative. “Responsible companies” are those which voluntarily choose to acknowledge them and are willing to react and implement solutions to maximize the positive impacts and reduce as much as possible the negative ones.

1.1.1Social housing at the heart of sustainable development’s issues

The concept of sustainable development entered the global political landscape in 1987, through the Brundltand report, officially entitled “Our common future”. This report has coined the most widespread definition of sustainable development: sustainable development “meets the needs of the present without compromising the ability of future generations to meet their own needs.” This definition stresses the long-term perspective embedded in the concept, which is consequently very often exclusively associated with environmental issues.Yet, as stated a few lines further in the report, sustainable development is also about ensuring people’s well-being: it “requires meeting the basic needs of all and extending to all the opportunity to fulfil their aspirations for a better life”.

The concept was born from the conclusion that the socio-economic model which prevailed in the last decades is impossible to maintain and needs to be completely reconsidered: its impacts on the environment and society are indeed rapidly destroying the very resources and equilibrium it relies on. Sustainable development means thus changing our production and consumption patterns, to adopt a long-term perspective and enable a form of balanced economic growth, which contributes to social objectives and preserves environmental resources.

Social housing clearly stands at the heart of sustainable development challenges.

• Its very core mission, providing access to affordable housing, relates to one of the major concerns of today’s society. Housing can definitely not be considered like other ordinary goods; it is recognized as a right in a number of international human rights instruments (Universal Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights…) and in the EU Charter of fundamentals rights, made legally binding by treaty of Lisbon2. Housing is besides a determining factor on people’s lives, health, social and economic development… By targeting in priority those who face greater difficulty to access decent housing conditions, social housing contributes to social equity and diversity.

Social and public housing providers are besides more and more expected, or even requested, to address other social and community needs, through investment in equipment or infrastructures, or involvement in specific actions, aimed at, for example, supporting employment and social integration or reducing antisocial behaviours…

• Construction and housing have significant and long-lasting impacts on the environment, locally and globally. In 2010, the residential sector accounted for over 26% of the total final energy consumption in the EU. It is seen as one of the greatest potential for increased energy efficiency in the EU. Closely related to energy consumption is the amount of Greenhouse Gas (GHG) emissions released every year, contributing to climate change. Although the current regulation focuses on these aspects, other environmentalimpacts are to be considered, including water consumption, land use and impact on the ecosystem…

Through their regular contact with a number of actors, and, in particular with inhabitants, social housing providers can also play a role in awareness-raising and accompanying change towards more sustainable practices.

• As highlighted in a number of recent studies in various EU countries, social housing providers also have a significant economic impact, through their investments and maintenance expenditures, which often largely benefit to local companies.Through the billions of euros injected each year, they can be important drivers of local economies. This increases their potential influence, and therefore their responsibility with regard to how they spend and how they behave on markets and with their suppliers.

This has to be conciliated with a particular duty in terms of sound financial management in order to ensure limited housing costs for their tenants, and because in many countries social housing providers receive public support.

• A long-term perspective is also inherent to the very nature of the activity: not only does it rely on long-term lending (and long business cycles), but it also involves managing a housing stock for years after its construction. The choices made in the conception phase will impact durably on the buildings’ use and maintenance, but also on the area where it is located. The relation to customers is also more durable: unlike many other businesses, it is not based on brief, intermittent transactions but on multi-year contracts.

Socio-demographic changes, new society aspirations as well as rising social issues represent some of the major challenges faced by social housing providers today. These are further exacerbated by the current crisis, which led to impoverishment and intensified social disintegration, and subsequent dramatic consequences at individual, household and community levels.Housing providers cannot either ignore anymorethe growing environmental concerns, which also affect households’ housing costs and living conditions.

Adding to this evolving context, retreating States and ever more constrained public budgets put considerable pressure on social housing providers, forced to re-invent their business models, management systems and day-to-day practices.

Social housing providers’ mission is intrinsically committed to the general interest. They are today already confronted to a number of social, environmental and economic issues.

As such, can they really, in the current context, turn their back to sustainable development?

Shall they wait for new, stricter regulation, or be pro-active and endorse voluntarily these new responsibilities?

Aren’t the major changes the sector is going through an opportunity to redesign their strategies and integrate sustainable development concerns into their operations?

1.1.2CSR key principles and expectations towards Social housing

Beyond addressing sustainable development issues, being a “responsible organization” also implies operating according to a number of fundamental principles; some of them find a peculiar resonance in the social housing sector.

The ISO 26000 standardhas defined 7 principles: accountability, transparency, ethical behaviour, respect for stakeholders’ interest, respect for the rule of law, respect for international norms of behaviour, respects for human rights.

These principles have to guide organizations’ actions and decisions, and shall be applied by all members of the organization, in their daily activities.

Because it addresses major social issues and benefits from a special status, as well as public funding/support, the sector draws particular attention from national and local authorities and,more generally, from citizens. Shrinking public resources intensify authorities’ and citizens’ demand for greater accountability and transparency on the use of funds. In parallel, as actors invested with a mission of general interest, social housing providers are expected to act as examples, as models for other sectors. The crisis and scandals in recent years have aggravated distrust from civil society actors and citizens towards private enterprises and public bodies. Citizens are particularly watchful of the conduct of public actors and their partners, and will judge extremely severely any breach to what is considered as ethical and responsible. As such, accountability, transparency and respect of stakeholders’ interestsare particularly relevant forsocial housing.

Transparency and accountability are fundamental imperatives of CSR, and stand very close one to the other. Accountability means assuming responsibility and answering for decisions, actions and their consequences towards stakeholders. It implies accepting that stakeholders have a right to be examine how business is conducted and question the organization on its actions. Transparency means providing access to complete, clear, correct and up-to-date information pertaining decisions, actions and impacts. Organisations should be transparent and accountable on all dimensions (economic, environmental, social), and on positive as well as negative impacts.They should be transparent on impacts, preventive or corrective actions and decision making processes.

The EU and companies’ transparency on social and environmental matters

Companies’ obligations in terms of transparency on social and environmental matters were first mentioned in the 2003/51/CEDirective on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings.

This first step at European level was enhanced in the EU 2011-2014 strategy for CSR, which includes a clear focus on accountability and transparency. The EU Parliament non-binding EU Parliament resolution issued in February 2013 (“Corporate social responsibility: accountable, transparent and responsible business behaviour and sustainable growth”) supported this view and called for a European framework on companies’ disclosure requirements on CSR-related issues. The European Commission subsequently submitted a Directive proposal in April 2013; should this proposal be endorsed by the Parliament and the Council, companies over 500 staff and either a balancesheet total of EUR 20 million or a net turnover of EUR 40 million would be required to include in their annual report information pertaining to,at least: environmental, social and employee matters, respect for human rights,anti-corruption and bribery matters.

At the very heart of a CSR approach stands the principle of “respect for stakeholders’ interests”. As such, CSR requires to not just consider the interests and expectations of owners and shareholders, but also of all actors directly or indirectly concerned by the organization’s activity and impact. Social housing is by nature exposed to a number of actors, in particular at local level, and has thus to deal with diverging or even contradictory objectives, while always keeping in mind the collective interest. The first imperative is then to explain and justify the choices made towards stakeholders.

Accountability and transparency are necessary to build trust with stakeholders. It should be supported by anethical behaviour. Integrity, loyalty and equity shall be spread and observed throughout the company, along with concern and respect for others.

Respect for the rule of law is obviously a first necessary condition to Corporate Social Responsibility, while respect for international norms of behaviour and human rights refers mainlyto UN Conventions and International Labour Organizations Standards. These principles target in priority multinational firms operating in developing countries where regulation and standards are not as strict as in Europe. However, considering the sensitive nature of their work, growing and changing regulation, and rising concerns relating to working conditions (work-life balance, non-discrimination, stress and harassment…), social housing providers in Europe should not overlook these key CSR rules.

Social housing organizations are major partners of local authorities. They provide an essential –and highly-demanded- service. They operate according to a special status and, in most countries, benefit from different types of public support.

As such, don’t they have a particular responsibility towards citizens, taxpayers and society at large in terms of accountability and transparency?

Shouldn’t they lead the way in terms of ethical behaviour, respect for stakeholders’ interests and human rights?

While the sector often suffers from a negative image, largely conveyed by the media, isn’t it time to (re)affirm and demonstrate high engagement and human values?

1.2CSR as a way to revisit organisations’ relation to their Stakeholders

The ISO 26000 standard defines a stakeholders as “an individual or group that has an interest in any decision or activity of an organisation”.