Social Impact

Preamble

Social Impact is included in the co-operation, building management group and data sharing provisions. 

There is growing demand for green lease clauses to go further in addressing social issues, forming part of what some commentators are referring to as ‘responsible leases’. Buildings can have a significant impact on the lives of those who interact with them and the real estate sector is well placed to create positive social impact.

When it comes to considering how to incorporate social issues into leases, a ‘one size fits all’ approach will not be possible.  The extent to which social obligations can be addressed will depend upon a number of factors.  Location is key, is the building in an urban or rural setting? Who is the community that the building should serve? Does the building form part of a wider estate owned by the Landlord or is it a standalone asset? The intended use of the building will be a material consideration; the types of social initiatives that a retail or food and beverage (F&B) user can commit to will be very different to an office or logistics tenant.  

In a ten-year lease, what the parties might consider to be key social initiatives could look very different at the start of the term to the end of it.  If specific social obligations are set out in detail in the lease, the risk is that it quickly becomes outdated. To avoid this and to allow targets or goals to evolve over time, we recommend that examples of social impact measures in the definition of Social Impact are not strictly prescribed (and are non-exhaustive) unless the parties have clear actions, targets or goals they have agreed prior to the lease.  

Appropriate Social Impact measures will depend upon the nature of the building or estate and the Landlord’s own social agenda.  However, examples could include that tenants and occupiers of the building or estate will (where practicable):

• Complete the Social Value Portal’s occupier checklist at least once every 12 months and provide a copy to the Landlord;
•  Advertise job opportunities locally (with local residents to be offered the position where they meet the criteria);  
• Work with local schools or other educational establishments, e.g., offering work experience, career support or giving talks about whatever sector the Tenant is involved in;
• Engage with local supply chains and support local businesses;
• Offer apprenticeships to local residents;
• Volunteering with local community groups;
• Participate in community-wide events, e.g. summer fairs or local fundraising initiatives; 
• Register for Living Wage accreditation both in respect of their own employees and also individuals engaged by the Tenant for the supply of services, e.g. cleaning and catering companies;
• Work with local charities, e.g. toy-drives at Christmas;
• If a Tenant is using the Premises for F&B purposes or as a food store, donate surplus or end-of-life produce to local food banks;
• Offer mental health support and resources to its employees and users;
• Offer mentoring for members of the local community;
• When vacating or refurbishing the Premises offer any old furniture to suitable charities; and 
• Promote healthy and sustainable transport options for employees and users of the Premises, e.g. car sharing schemes and bike-to-work programmes.

On the issue of a living wage the BBP believes in encouraging commitments to pay the Real Living Wage (as defined in this toolkit) by the Landlord and the Tenant to their employees and where practicable to Landlords and Tenants taking steps to ensure this practice is followed in each of their supply chains. For some tenants (e.g. office tenants) this may be something they are already doing and which they will be able to accommodate and willing to commit to. For tenants in other sectors e.g. retail, this may be more difficult. This is not an issue which is currently widely covered but the BBP supports it as an area for future development. As such drafting does not form part of this version of the toolkit, however, if the parties do want to include obligations in respect of the Real Living Wage there is some suggested wording in the drafting note to this clause which is a reasonable endeavours commitment and is limited to employees of the Landlord and Tenant who work at the Building. In the case of the Landlord, it extends to using reasonable endeavours to ensure that the employees of its direct contractors and suppliers are also paid the Real Living Wage where their work involves dealing with the management or operation of the Building.