The 2016 NextGeneration Benchmark
Putting People at the Heart of Sustainable Housing
After years of emphasis on the environmental impacts of residential development, we are witnessing a shift in focus to its impact on people. It is this shift that will generate the groundswell of demand and innovation needed to truly transform the way homes and neighbourhoods are designed, delivered and cared for. Homes that are fit for the future need to be good for people, planet and profit. Companies that are able to provide these homes will stand out from the crowd.
In this report we evaluate the progress the homebuilding sector has made during the last year in delivering sustainable development and highlight best-in-class performance within the industry. This year, NextGeneration explores three ‘people trends’ influencing housing: designing homes and neighbourhoods where communities thrive, promoting the health and wellbeing of residents and measuring and demonstrating social impact to external audiences.
What is benchmarking?
Benchmarking is the process by which companies compare their performance against a recognised external standard (“a benchmark”). In “benchmarking clubs”, like NextGeneration, companies can also compare their performance against their peers. Benchmarking is commonly used in all industries to enable companies to better understand their current performance, set improvement targets and share best practice for mutual advantage.
What does NextGeneration benchmark?
The benchmark is carried out in two phases: Phase 1 where publicly available information is reviewed and Phase 2 where members can increase their score by providing evidence of activities that are not discussed in public reports.
How are the benchmarking criteria decided?
Each year, a set of benchmarking criteria are created by Jones Lang LaSalle, as Secretariat of NextGeneration, in consultation with the Executive Committee and homebuilders who are participating in the benchmark. The benchmarking criteria are based on best practice standards and guidance, often produced or endorsed by central and local government or third party organisations, such as charities or research organisations. The criteria are designed to be challenging and go beyond statutory minima or standard practice.
NextGeneration membership provides the following benefits:
- A more accurate assessment of your performance: An additional Phase 2 audit means members can increase score by providing evidence of activities that are not discussed in public reports.
- Expert advice on how to improve your performance: Each member receives a bespoke results presentation that includes peer gap analysis and advice on the next steps for improvement.
- Access to thought leadership, innovation and shared learning events and network: Three member events provide briefings on emerging sustainability trends and innovation.
- Promotion of your approach to sustainability to primary stakeholders: A launch event and public report promotes members approach to investors, the Homes and Communities Agency, Registered Housing Providers, local authorities, communities, customers and employees.
The NextGeneration Executive Committee provides core funding to the initiative and comprises its main governance body. This committee’s role is to ensure the integrity and transparency of the initiative.
The Executive Committee is made up the Homes and Communities Agency, UK-GBC and the secretariat is currently recruiting for additional members.
Click here for the Terms of Reference for the Executive Committee.
“The house builders benchmarking process is an excellent model for other industries to follow. It is a collaboration involving investors, companies, regulators and civil society, and really gets to the heart of the material ESG issues within this sector and the drivers of long term value”James Gifford, Executive Director, Principles for Responsible Investment
Dr. Steve Waygood, Head of Sustainability Research and Engagement, Aviva
“We consider a range of sustainability issues when looking for investments in the housebuilding sector. The NextGeneration benchmark that was developed by WWF, Upstream and Insight Investment is among a broad range of inputs that we use to rate companies on our sustainability matrix. This rating drives our investment decisions and our voting at company annual general meetings. This means that where homebuilders score poorly on our matrix, then our Sustainable Future funds will not invest in them. We would also be likely to vote against the report and accounts of the company at the AGM”
“With an ever-increasing drive to significantly increase the UK’s housing stock, there is the potential for environmental and social sustainability to be overtaken by the immediate need to prioritise construction. The NextGeneration benchmark helps Crest Nicholson to measure how well it balances its role in delivering homes to meet the market’s demands with its long-term ambition of being a leading sustainable developer.”Stephen Stone, CEO, Crest Nicholson