In the face of rising inflation and growing inequality, the real estate sector has a critical role to play in driving social impact and supporting local communities. This includes expanding access to affordable housing, developing social housing, and revitalizing community infrastructure and services. Equally important is the environmental dimension – contributing to climate change mitigation and adaptation, while also ensuring energy efficiency and affordability.
the challenge
Ksapa was commissioned to develop a comprehensive ESG and social impact analysis framework for a new property investment fund classified as an SFDR Article 9 product. The key objectives were:
- Combine ESG performance metrics and social impact indicators
- Ensure alignment with SFDR Article 9 regulatory requirements
- Design a framework applicable across the full investment cycle
- Propose measurable KPIs that can be consistently tracked across diverse European markets and asset types
OUR APPROACH
- Initial Reflection Phase: The team engaged in deep discussions to translate the fund’s impact objectives (as laid out in its prospectus) and identify key ESG risks into a coherent analytical framework. This involved defining concepts like “accessible housing” and “access to basic services”, and determining how to best measure the social and environmental impacts of different property asset types.
- KPI Identification: Building on the initial framework, the team selected a set of KPIs to monitor at the fund level. These indicators balanced the fund’s intentionality and additionality with data availability, enabling both quantitative and qualitative impact measurement.
- Parameterization: The team structured the analysis tool, refining the criteria, weighting, and categorization – with a particular focus on aligning with relevant regulations.
- Iterative Testing: The draft frameworks were tested on real assets to ensure operational feasibility and adaptability to different holding structures (direct ownership, stakes in other funds).
- Enabling Adoption: Finally, user guides and training materials were developed to facilitate widespread adoption of the grid by the fund’s management teams.
KSAPA’s teams helped us to better structure SC Pierre Impact’s commitment to impact by providing us with an expert eye. We are particularly pleased to have succeeded in building a tool that captures the granularity of a pan-European investment strategy in residential real estate and social infrastructure. Pierre Impact’s ambition to improve access to housing and combat inadequate housing has been translated into an effective reporting tool.
