Social Impact Investing in the Real Estate Industry E-Book

Laura Vivian Haidl-Schöpf

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Deutsch

Seitenzahl: 228

Veröffentlichungsjahr: 2024

Beschreibung

This dissertation represents an initial exploration and offers a practical framework, along with managerial recommendations, for social impact investing within the real estate industry. The first paper contributes to the academic discourse by elucidating the understanding, boundaries, and definition of social impact investing. The second paper integrates the academic framework of a balanced scorecard with regulatory stipulations set forth by the European Union, while incorporating specific considerations relevant to real estate assets. This integration results in the development of an analytical grid tailored to assess social impact investing within the context of real estate properties. The third and concluding paper evaluates the applicability of the previously established Real Estate Social Impact Investing Analysis Grid and derives managerial insights from interviews conducted with prominent German real estate top managers and sustainability managers. Overall, this dissertation shall enable all actors in the real estate landscape to understand social impact investing and help to establish social impact investing as an integral part of daily business. In line with the sentiment expressed by the Urban Land Institute (2021, p. 12), "Now is the time to put people and places at the heart of real estate investment and development." Through collaboration and the engagement of all stakeholders, the real estate industry can significantly contribute to addressing social and environmental sustainability challenges in a goal-oriented manner. By doing so, it takes on the responsibility of creating a livable and cherished world for future generations.

Leseprobe

Table of Contents

1. Introduction

2. To Miss the Forest for the Trees: Understanding, Conceptualizing, and Defining Social Impact Investing through a Systematic Literature Review

2.1 Introduction

2.2 Impact Investing

2.3 Systematic Literature Review of Social Impact Investing

2.3.1 Data Collection and Cleaning

2.3.2 Methodology

2.3.3 Results of the Systematic Literature Review

2.3.4 Definitional Categories

2.3.5 Superordinated, Subordinated, Related but Distinct, and Synonymous Concepts

2.4 Social Impact Investing against the background of the EU social taxonomy

2.5 Discussion and Conclusion

3. From Location, Location, Location to People, People, People: Establishing a Real Estate Social Impact Scoring Modell

3.1 Introduction

3.2 Theoretical Foundation

3.2.1 Balanced Scorecard

3.2.2 Maslow’s Hierarchy of Needs

3.3 Building a Real Estate Social Impact Investing Analysis Grid

3.3.1 Method: Survey and Focus Group Sessions

3.3.2 EU social taxonomy

3.3.3 Sustainable Development Goals (SDG)

3.3.4. Mapping of Impact Clusters and Impact Indicators

3.3.5 Scaling of the indicators

3.4 Real Estate Social Impact Analysis Grid

3.5 Discussion and outlook

4. The future of social impact investing in the German real estate industry – Qualitative research on social impact investing views of top and middle managers

4.1 Introduction

4.2 Theoretical background

4.2.1 Agency Theory

4.2.2 Real Estate Social Impact Analysis Grid

4.2.3 Research Area

4.3 Methods

4.3.1 Sample and Sampling Logic

4.3.2 Data Collection

4.3.3 Data Analysis

4.3.4 The Trustworthiness of the Data Collection and Analysis Method

4.4 Findings

4.4.1 The Future of Social Impact Investing in the German Real Estate Industry

4.4.2 Social Impact Investing in the Real Estate Industry

4.4.3 Feedback on Real Estate Social Impact Investing Analysis Grid

4.5 Discussion

4.6 Conclusion

5. Conclusion

6. Reference List

7. Appendix

7.1 Appendix 1: Survey Results

7.2 Appendix 2: Descriptive statistics on control variables

7.3 Appendix 3: Sample Characteristics

7.4 Appendix 4: Focus Group Protocol Template

7.5 Appendix 5: Real Estate Social Impact Investing Analysis Grid

7.6 Appendix 6: Semi-structured Interview protocol

8. Honorary Declaration

List of Figures

Figure 1:Conceptual Interplay of the main EU social taxonomy stakeholder and goals (REMI & ICG, 2023).

Figure 2:Real Estate Social Impact Analysis Grid (own representation – partially based on REMI & ICG, 2023).

Figure 3:Data coding tree (own representation).

List of Tables

Table 1:Definition and underlying concepts regarding the definitional categories of social impact investing (own representation based on Höchstädter and Scheck (2015) and amended by the authors based on the open coding procedure).

Table 2:Differentiation and delimitation definitions of the related concepts regarding social impact investing (own representation based on Höchstädter and Scheck (2015)).

Table 3:Coding Matrix – Definitional categories (own representation).

Table 4:Coding Matrix – Superordinated, subordinated, related but distinct, and synonymous concepts (own representation).

Table 5:Interview participants (own representation).

1. Introduction

The real estate sector stands as one of the paramount industries worldwide. In the year 2020, the total worth of global real estate, approximately $326.5 trillion USD, surpasses the collective value of both global equity (about $109.2 trillion USD) and debt securities (around $123.5 trillion USD) for the same period. Additionally, it’s noteworthy that the value of global real estate is approximately four times the total global Gross Domestic Product (GDP), which amounted to approximately $84.8 trillion USD in 2020 (Savills World Research 2021). Nonetheless, it is imperative to acknowledge that the global real estate sector bears a substantial environmental burden, contributing to one-third of the world’s carbon dioxide (CO2) emissions, consuming 40% of the world’s energy resources, and accounting for 50% of global resource wastage (Credit Suisse, 2021).

We recognize that actors within the financial and real estate sectors are not solely motivated by altruism, as demonstrated by the financial crisis of 2008. This crisis underscored the imperative for substantial reform within the financial system, prompting a reconsideration of economic and financial paradigms. The overarching goal was to establish a sustainable economic milieu and rehabilitate the standing of both individual financial institutions and the financial system. These ethical imperatives significantly influence the domain of corporate social responsibility (CSR) within financial firms, the practice of socially responsible investments, and the realm of philanthropic investments (Chiappini, 2017). Hence, the real estate industry has a significant and responsible role to play as a curator of the built environment. This has brought the opportunities to re-conceptualize real estate development and investment to the forefront and link it to local needs and priorities worldwide (Urban Land Institute, 2021).

This doctoral thesis comprises three research papers, whereby every paper is presented in one chapter of this thesis.

Chapter 2 of the research paper titled “To Miss the Forest for the Trees: Understanding, Conceptualizing, and Defining Social Impact Investing through a Systematic Literature Review” delves into the escalating significance of impact investments as a means of attaining societal objectives. While environmental considerations have garnered increasing attention, the social dimensions of impact investments have frequently been marginalized with respect to their elucidation, demarcation, and quantification. This investigation constitutes an inaugural endeavor in the process of defining the concept of social impact investing. It does so by conducting a methodical review of extant literature, drawing upon the research design and methodology elucidated by Höchstädter and Scheck (2015) , and subsequently fusing this definition with the European Union’s social taxonomy. The scrutiny undertaken in this chapter exposes that the prevailing definition of social impact investing closely parallels that of impact investing but mandates the inclusion of an additional criterion, denoted as “additionality.” Furthermore, the paper brings to the fore the conspicuous neglect of the financial return component within academic dialogues, despite the pervasive concentration on investment matters. Lastly, this chapter provides elucidation regarding the usage of more than 45 interconnected terminologies within the domain of impact investing, encompassing concepts such as social investments, socially responsible investing (SRI), corporate social responsibility (CSR), and environmental social governance (ESG).

We find ourselves in the nascent stages of social impact measurement within the real estate sector. Presently, multiple stakeholders are diligently crafting measurement tools and terminology to establish industry standards, with a pronounced emphasis on environmental considerations while somewhat neglecting the social dimensions. However, the escalating global emphasis on social issues, driven by international pressures such as the Sustainable Development Goals (SDGs) and regulatory mandates such as the EU social taxonomy, necessitates the incorporation of social aspects into the strategic management of companies operating in this sector. Chapter 3 (Paper 2) “From Location, Location, Location to People, People, People: Establishing a Real Estate Social Impact Scoring Modell” marks an inaugural stride towards formulating an analytical framework for assessing and quantifying the social impact within the real estate industry. Drawing inspiration from the balanced scorecard concept, this research introduces a social perspective in the form of an analytical framework designed to enable real estate enterprises to scrutinize, record, measure, and compare their social impact at the asset level. This approach is underpinned by a comprehensive investigation that encompasses a survey involving 233 prominent figures in the German real estate realm, complemented by ten indepth focus group sessions with industry experts. This research amalgamates existing frameworks with practical insights from the real estate field and enriches the model with academic principles such as Maslow’s hierarchy of needs and the Sustainable Development Goals, all set within the regulatory context provided by the EU social taxonomy. The culmination of this endeavor will yield a real estate impact investing analysis grid, accessible to all stakeholders in the real estate industry, serving as a transparent tool to validate, substantiate, and, consequently, fulfill their social responsibilities, thereby facilitating future benchmarking efforts.

Chapter 4 (Paper 3) “The future of social impact investing in the German real estate industry – Qualitative research on social impact investing views of top and middle managers” addresses a significant gap in the consideration of social impact investing within the real estate sector, despite its substantial societal implications. It introduces a novel tool, termed the Real Estate Social Impact Analysis Grid, designed for the assessment and comparison of social value and impact. Rooted in scholarly inquiry, this research employs agency theory as its conceptual foundation to illuminate the intricate dynamics within the real estate industry, with a particular emphasis on the intersection of social impact investing and its alignment with stakeholder interests. By conducting a rigorous analysis of interview data collected from leading German real estate experts, employing grounded theory and the Gioia method, this study investigates the functioning of social impact investing as a mechanism to reconcile the objectives of investors (principals) with the broader societal objectives often advocated by managers and other intermediaries (agents). The discourse surrounding the delicate equilibrium between financial and social returns, alongside the imperatives of benchmarking and standardization, is dissected through the lens of agency theory. This framework underscores the critical importance of aligning incentives to foster actions that simultaneously serve the interests of principals and contribute to societal well-being. This analysis introduces the Real Estate Social Impact Investing Analysis Grid, a tool analogous to agency theory’s assessment of agent performance, to facilitate the evaluation and enhancement of social impact within the real estate realm.

Finally, the doctoral thesis concludes with Chapter 5 which summarizes the results and provides avenues for further research within the field of social impact investing in the real estate industry.