Companies are increasingly judged by the impact they have on the world around them. More businesses are turning to something called Total Impact (TI) for help.
Total Impact: Using data to make a difference
No company is an island: its actions, both direct and indirect, often have a big impact not just on its workplace and employees but also on the world around it. Now, a new approach known as Total Impact (TI) is helping them work out their full effect on society, the environment and the economy.
It builds on existing financial reporting, and can offer a more complete picture of a company’s role in wider society. Advocates of TI are collecting data which can tell us whether a business’s total contribution is negative or positive, or at a more granular level, how building managers can reduce crime in their local areas.
Business with purpose
TI is more than just a nice-to-have. The global financial crisis focused attention on the role of banks and investors, including real estate investors, in society. The Governor of the Bank of England, Mark Carney, famously warned investors against being “socially useless”.
In the UK, The Crown Estate is setting the pace, using what it calls “Total Contribution” to measure and communicate its impact economically, environmentally and socially.
JLL has also been piloting a TI assessment of its UK business. Sophie Walker, UK Head of Sustainability at JLL comments: “As well as understanding our carbon emissions and our corporate community investment, we now know that our supply chains support over 4,000 jobs. We are still calculating all of our impacts, but we anticipate it weighing in on our decisions in future”.
JLL joins several other real estate companies that have also begun measuring their TI including Hammerson, Land Securities, British Land, Derwent London and Intu.
The real estate sector is well-placed to set an example here. There are many impact areas which can be considered –from energy use and property tax contributions to the way attractive buildings contribute to the local area and how derelict properties encourage antisocial behaviour. Not to mention the well-being of individuals both inside and outside those buildings or the number of people employed to manage them.
The hidden experience of the property sector
Real estate businesses have more experience of working with TI than they might realise. For a start, they probably already hold much of the data, especially around economic impacts like job creation, inward investment, training and skills etc.
What’s more complicated is measuring factors such as the happiness of residents as this is more subjective. But it can be captured with on-street surveys for instance, or through publicly available place-related data and smart technology.
A nascent but growing trend
Total Impact may still be in its early stages but as more businesses attach more importance to their footprint, it stands to play a key role in providing the information needed to make decisions with an enhanced understanding of their impacts that previously was impossible.
This article was first published on JLL Real Views, JLL’s global site providing expert insights on the trends and developments shaping real estate.