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Activity SJa4.1
Objective
Equity + Inclusion in Capital
Concept
Social Equity + Justice
Activity Type
Impact
Rating System Application
Achieve equity and inclusion in securing equity capital and investors
Scope
The Owner shall set and implement inclusive equity capital principles, defined in Requirements, to promote ownership and investment in commercial real estate by historically underrepresented groups, including but not limited to people of color, women, and people from low-income backgrounds. Upon seeking capital for the project, the Owner shall integrate these principles into each stage of the process. The scope includes setting and implementing these principles but does not extend to the assessment of their effectiveness.
Note: If projects in rating systems other than B+I: Developer and B+I: Occupier are seeking external debt or capital to fund the project, this Activity shall apply, and points can be pursued to achieve certification.
Requirements
Act to Avoid Harm
- 01.
Conduct educational and outreach programs to inform potential underrepresented investors about project investment opportunities to increase capital investment from a diverse spectrum of investors, including underrepresented investors or organizations led by racial and ethnic minoritized groups.
- 02.
Engage at least one minoritized institutional investor such as a Historically Black College and University (HBCU), Emerging Manager, racial or ethnic minoritized organization, or a Foundation supporting underrepresented communities for sourcing investment capital.
Benefit Impacted Parties
- 03.
Support or initiate at least one program/initiative to enhance underrepresented individuals’ or groups’ access to investment, such as collaborations with social equity funds or similar entities focusing on addressing the racial and gender wealth gaps through investment.
- 04.
Utilize or develop investment platforms that lower barriers to entry, enabling a broader range of investors to participate.
Contribute to Solutions
- 05.
Implement a community ownership model to promote wealth building and anti-displacement, including:
- a.
Opportunities for local community members to invest, promoting local economic development and inclusivity.
- b.
Underrepresented shareholder protections to ensure equitable treatment of all investors regardless of their investment size.
- a.
Indicators
The performance indicator is the percentage of inclusive equity capital (capital invested by minoritized groups). The first context indicator is the total number of individual underrepresented investors on the project. The second context indicator is the total number of underrepresented or minoritized organizational investors on the project. The third context indicator is the total amount of capital invested by minoritized groups on the project.
To calculate the performance indicator:
To calculate the performance indicator:
1. Determine total amount of capital investment invested by minoritized groups.
2. Determine the total amount of total capital investment in the project.
3. Calculate progress as the percentage of inclusive capital.
This is expressed mathematically as:
(Amount of invested underrepresented capital / amount of capital invested) x 100
Scoring
Points assignment
| Points | Percentage of Inclusive Capital |
|---|---|
| 1 point | 5-19% inclusive capital |
| 2 points | 20-34% inclusive capital |
| 3 points | 35-49% inclusive capital |
| 4 points | 50+% inclusive capital |
The scoring rubric is based on current industry demographics for real estate investors104.
Additional points assignment
| Points | Additional Requirements Satisfied |
|---|---|
| +2 points | Requirements #3 and #4 satisfied |
| +4 points | Requirement #5 satisfied |
Documentation
- 01.
List of financial, human, and material resources utilized for this activity.
- 02.
Evidence of educational and outreach programs conducted, including dates, locations, content, attendance records, feedback or testimonials, and any resulting underrepresented investor engagement.
- 03.
Documentation of engagement with at least one underrepresented-affiliated institutional investor, including agreements, communications, and investment records.
- 04.
Description of a program enhancing underrepresented individuals’ access to investment, including objectives, target demographic, evidence of engagement, and outcomes.
- 05.
Documentation of the functionality (e.g., user manuals or guides) and accessibility (e.g., user testimonials) of investment platforms utilized or developed, including user testimonials where available.
- 06.
Legal documents outlining the community ownership model, including the rights and protections for underrepresented shareholders.
- 07.
Investment records showing the amount of capital invested by local community investors and other underrepresented investors.
Referenced Source
- United Nations Sustainable Development Goal 10: Reduced Inequalities