Leveraging strategic facilities management to achieve corporate ESG and sustainability: a literature review

1 Introduction

Environmental, Social, and Governance (ESG) considerations have transitioned from niche metrics to central pillars of contemporary corporate governance, management, and investment strategy over the last two decades (Pollman, 2024; Newell, 2023; Wang, 2024). Within the real estate sector, scholarly and practitioner attention has largely focused on the Environmental dimension, driven by the imperative to decarbonise buildings, improve energy efficiency, and respond to climate-related financial risks. This emphasis aligns with the growing field of environmental economics, which has provided robust frameworks for valuing and managing the ecological impacts of real estate assets. However, while the term ESG is now omnipresent in corporate debate, a persistent gap remains in stakeholder understanding regarding its historical origins and intended objectives (Pollman, 2024). More critically, the Social pillar of ESG remains comparatively underexplored, both in academic discourse and in practice, despite growing recognition of its importance in shaping organizational performance and stakeholder outcomes (Hodges, 2005; Newell, 2023; Wang, 2024).

Grounding this evolution is Stakeholder Theory, which posits that corporate value is maximized only when the interests of all affected parties, including employees, communities, and investors, are harmonized (Freeman, 1984; Freeman et al., 2004). This paper argues that SFM, viewed through this lens, offers a rigorous and practical pathway for operationalising the neglected “S” in ESG. In doing so, it proposes a conceptual framework that integrates stakeholder perspectives into facility-level decisions, addressing a significant gap in both theory and practice. According to Jensen et al. (2013), the emergence of FM as a distinct management discipline during the 1980s and 1990s was primarily aimed at controlling and reducing costs through innovative methods of organizing and managing diverse activities that had previously received minimal management attention. From a Stakeholder Theory perspective (Freeman, 1984; Donaldson and Preston, 1995), FM's evolution reflects a shift from a narrow focus on operational efficiency to a broader role in addressing the needs of multiple stakeholders, including building occupants, service providers, and local communities.

In today's dynamic business environment, FM plays a vital role in ensuring the smooth operation of organizations. It is imperative to establish a clearer understanding of the relationship between FM and core business functions, performance measurement techniques, and how frameworks such as the FM Value Map can be advantageous for the stakeholders involved. The FM Value Map explains how facilities management activities create organizational value by linking FM services such as maintenance, workplace management, and building operations to outcomes including user satisfaction, employee productivity, and overall organizational performance. Corporate Social Responsibility (CSR) and sustainability have considerable potential to enhance FM's role, transforming it into a strategic partner within corporate executive management and facilitating the achievement of strategic objectives (Jensen et al., 2013). Despite this potential, Temmink and Flynn (2021) have underscored both an opportunity and a challenge—while corporate real estate departments can enhance their organizations' ESG performance and governance, encompassing ethical compliance, risk management, and supply chain integrity, they face inconsistent reporting standards and a lack of clearly defined roles and responsibilities.

Lok et al. (2023) argued that SFM can significantly support the United Nations Sustainable Development Goals (SDGs) by integrating sustainability into business decisions. This alignment not only bolsters global sustainability initiatives but also embeds sustainability within the organisation's core strategies (Lok et al., 2024). Leveraging SFM to achieve social outcomes that align with an organisation's ESG objectives requires integrating sustainable practices, enhancing performance, and actively engaging with the community. Achieving this requires a comprehensive understanding of how FM contributes to broader social and environmental objectives, and how FM practices can align with organizational aspirations (Lok et al., 2024). This focus on usability is vital for effectively guiding the development of methodologies and tools to manage the relationship between activities and spaces, thereby enhancing user experiences and operational performance (Douglas and Ali, 2019). FM also plays a crucial role in community settings by prioritizing stakeholder value and translating strategic community plans into operational realities when devising models for FM that support sustainable community development for social, environmental, and economic prosperity (Alexander and Brown, 2006). Thus, the integration of FM with community development requires a multidisciplinary approach that emphasizes the interconnections among place, people, and processes (Tammo, 2014). In the South African context, empirical research by Nurick and Thatcher (2023) further reinforces the strategic relevance of SFM, demonstrating that indoor environmental quality in green-certified office buildings significantly influences knowledge workers' productivity and wellbeing. These findings highlight how facilities management decisions regarding thermal comfort, lighting, acoustics, and air quality shape the workplace experience and organizational performance, illustrating the role of SFM as a practical mechanism for operationalizing the social dimension of ESG in the built environment (Jensen et al., 2013; Nurick and Thatcher, 2023).

Litvin (2023) concluded that, to support these advancements, human resources are essential for driving sustainability agendas within FM. Providing environmental training and initiatives that address societal challenges while maintaining an organisation's profitability is crucial. Additionally, Barrett (2000) further emphasized that this collaborative approach ensures that FM practices are continuously refined and adapted to meet evolving needs. The South African corporate landscape serves as a critical case for examining these dynamics. Here, historical spatial inequities, robust corporate governance codes (e.g., the King Code), and regulatory frameworks such as Broad-Based Black Economic Empowerment (B-BBEE) place the “S” in ESG at the center of organizational legitimacy and long-term value creation (Matakanye et al., 2021). Yet, even in this context, the role of SFM in delivering social outcomes remains poorly understood and empirically underexamined.

To address these objectives, this study adopts a structured conceptual literature review methodology to synthesize and critically evaluate existing theoretical and empirical knowledge on SFM and its contribution to the social dimension of ESG. The review combines transparent literature identification, screening and thematic conceptual synthesis to integrate multidisciplinary evidence from facilities management, corporate real estate, sustainability and stakeholder management. This approach enables the identification of conceptual relationships, research gaps, and emerging themes, providing the foundation for developing an integrated conceptual framework. Accordingly, the purpose of this paper is two-fold. First, it synthesizes and critically examines the existing literature on SFM, ESG and social sustainability, with particular attention to the controversies and debates that define this emerging field. Second, it proposes a conceptual framework that integrates Stakeholder Theory with SFM practice to systematically address the social dimension of ESG. The framework is intended to guide both future research and organizational practice by providing a structured approach to identifying, implementing and evaluating social outcomes through SFM.

2 Theoretical framework: stakeholder theory and the social dimension of ESG

2.1 Introduction to stakeholder theory

Stakeholder Theory provides the foundational lens for this paper. Originating in the 1960s and formalized by R. Edward Freeman in his influential work, Strategic Management: A Stakeholder Approach, the theory challenges the traditional shareholder-centric model of corporate governance. Instead, it posits that organizations create long-term value only when they consider and balance the legitimate interests of all parties affected by their actions, including employees, customers, suppliers, regulators, and local communities (Freeman, 1984; Donaldson and Preston, 1995; Freeman et al., 2004). Stakeholder Theory provides both a normative and pragmatic basis for understanding how organizations create value by addressing the interests of multiple stakeholders (Donaldson and Preston, 1995). It also provides a pragmatic rationale—managing stakeholder relationships effectively enhances organizational resilience, reputation, and long-term performance (Yim Yiu, 2008; Freeman, 2010; Wang, 2024). These dual foundations make the theory well-suited to examining how corporate functions, such as FM, can contribute to social sustainability within ESG frameworks.

2.2 Why stakeholder theory for the “S” in ESG?

The social dimension of ESG encompasses a broad range of concerns, including employee wellbeing, diversity and inclusion, community engagement, ethical labor practices, and human rights (Freeman, 1984; Freeman et al., 2004; Hodges, 2005; Pollman, 2024). Stakeholder Theory provides a structured way to identify, prioritize, and respond to these relationships (Mahajan et al., 2023). Unlike purely economic approaches that may reduce social outcomes to externalities or risk factors, Stakeholder Theory treats stakeholder interests as central to strategic decision making (Donaldson and Preston, 1995; Freeman et al., 2004). As Wang (2024) demonstrates, organizations that actively address social stakeholder concerns—through inclusive hiring, community investment, and ethical supply chain management—build reputational capital and stakeholder trust, which in turn attract investment and enhance competitiveness. Within the real estate and built environment sectors, this lens is essential because buildings do not exist in isolation but are embedded in communities, occupied by diverse users, and operated by complex networks of services (Newell, 2023).

2.3 Stakeholder types relevant to SFM

2.3.1 Internal primary stakeholders

Applying Stakeholder Theory to SFM requires identifying which stakeholders are most relevant to facility-level decisions and social outcomes. Drawing on established classifications (Freeman, 1984; Mitchell et al., 1997; Awa et al., 2024), four broad categories emerge: internal primary stakeholders are those directly involved in or affected by facilities' day-to-day operations. Foremost among these are employees and FM staff, whose wellbeing, safety, and productivity are directly shaped by the quality of the indoor environment. Factors such as indoor air quality, thermal comfort, ergonomic design, and access to amenities are not merely operational concerns; they are stakeholder matters that influence health, morale, and performance (Jensen et al., 2013; Buser and Støre-Valen, 2017). Closely related are building occupants and tenants, whose experience of the workspace affects satisfaction, retention, and ultimately the organization's ability to attract and retain talent. When occupants feel their needs are neglected, whether through poor lighting, inadequate accessibility, or unsafe conditions, the social contract between organization and user is broken (Douglas and Ali, 2019). For FM, this means that internal stakeholders cannot be treated as passive recipients of services; they must be engaged as active participants whose feedback and experience shape continuous improvement (Freeman, 1984; Alexander and Brown, 2006; Jensen et al., 2013).

2.3.2 External primary stakeholders

Freeman (1984) indicated that beyond the organizational boundary lie external primary stakeholders whose interests are directly affected by facility operations. Local communities are perhaps the most visible of these. Facilities do not exist in isolation; they are embedded in neighborhoods where their presence generates both positive and negative impacts (Alexander and Brown, 2006; Tammo, 2014). Noise, traffic, and emissions can disrupt community life, while employment opportunities, shared amenities, and investment in local infrastructure can enhance it (Alexander and Brown, 2006). Tammo (2014) argues that FM must therefore adopt a community-oriented perspective, translating strategic community plans into operational realities that foster social and economic prosperity. Service providers and suppliers constitute another critical external stakeholder group. As organizations increasingly outsource facilities services such as cleaning, security, and maintenance, the labor practices and working conditions of these providers reflect directly on the organisation's ESG performance (Atkin and Brooks, 2021). Ethical procurement, fair wages, and safe working conditions for contracted staff are not optional extras— they are core social responsibilities that FM is uniquely positioned to monitor and enforce (Elmualim et al., 2010).

2.3.3 Secondary stakeholders

Secondary stakeholders exert indirect but significant influence on FM and its social outcomes (Freeman, 1984; Donaldson and Preston, 1995). Regulators and policymakers set the legal and policy framework within which facilities operate (Barrett, 2000; Alexander and Brown, 2006). Building codes, occupational health and safety regulations, accessibility standards, and increasingly, ESG disclosure requirements all shape what is expected of FM (Barrett, 2000; Pollman, 2024). Compliance is a baseline, but forward-thinking organizations recognize that regulatory alignment can also be a source of competitive advantage (Porter et al., 2019; Pollman, 2024). Investors and insurers represent another powerful secondary stakeholder group (Freeman et al., 2004; Porter et al., 2019). As the Urban Land Institute (2021) documents, capital allocation decisions are increasingly contingent on credible ESG performance, including social metrics. Investors seek assurance that facilities are managed to mitigate social risks, including labor disputes, community opposition, and reputational damage (Porter et al., 2019; Pollman, 2024). When facility operations intersect with visible social issues, such as the treatment of cleaners, the accessibility of public buildings, or the displacement of communities, media attention can amplify stakeholder concerns and force organizational change (Pathirage et al., 2007; Carpenter and Feroz, 2001). For FM, this means that social performance is never purely internal; it is to some degree public (Freeman, 1984; Freeman et al., 2004).

2.4 Stakeholder theory as a bridge between SFM and social ESG

Stakeholder Theory is relevant to this paper due to its capacity to bridge high-level corporate ESG commitments with the operational realities of FM (Freeman, 1984; Donaldson and Preston, 1995; Pollman, 2024). While organizations may publicly aspire to social sustainability goals, these aspirations must be translated into concrete practices, such as how their cleaning staff are treated (Freeman et al., 2004; Alexander and Brown, 2006). Is the building accessible to people with disabilities? Does the facility contribute to or detract from community cohesion? Stakeholder Theory demands that these questions be asked and answered (Freeman, 1984; Donaldson and Preston, 1995). It provides both the ethical imperative (stakeholders matter) and the analytical framework (identifying who matters, and why) for doing so (Freeman, 1984; Freeman et al., 2004). As Keremidchiev (2021) notes, the theory has evolved from a managerial tool into a comprehensive perspective on value creation, recognizing that social outcomes are not mere by-products of corporate activity but are central to organizational legitimacy and sustainability (Keremidchiev, 2021; Freeman et al., 2004). For SFM, this means moving beyond a narrow focus on operational efficiency and cost suppression (Jensen et al., 2013; Lok et al., 2023). It requires recognizing that every facility decision, from the design of a break room to the selection of a cleaning contractor, has implications for stakeholders (Alexander and Brown, 2006; Douglas and Ali, 2019). When these implications are systematically considered, SFM becomes not merely a support function but a strategic enabler of social ESG outcomes (Jensen et al., 2013; Lok et al., 2023).

Stakeholder Theory provides the theoretical grounding for this paper's central claim: that SFM, when properly incorporated, can operationalise the neglected “S” in ESG. By identifying the diverse stakeholders affected by facility-level decisions and emphasizing the importance of taking their interests seriously, the theory provides both a rationale and a roadmap for integrating social sustainability into facility and environmental management. The following section traces the evolution of SFM and its emerging relevance to this task.

3 Research methodology

3.1 Research design

This study adopts a structured conceptual literature review methodology. Unlike a systematic literature review, which seeks to comprehensively identify and synthesize all available evidence relating to a narrowly defined research question, a conceptual literature review aims to critically synthesize and integrate theoretical and empirical knowledge, identify emerging themes and knowledge gaps, and generate new conceptual insights that advance theoretical understanding of a phenomenon (Torraco, 2016; Webster and Watson, 2002). This approach was considered appropriate because the relationship between SFM and the social dimension of corporate ESG remains fragmented across multiple disciplines. Rather than evaluating the effectiveness of a single intervention, this review seeks to integrate dispersed knowledge, establish conceptual relationships and generate a coherent theoretical understanding of SFM's strategic contribution to corporate ESG. Accordingly, this study should be interpreted as a structured conceptual literature review rather than a formal systematic literature review. Nevertheless, structured literature identification, screening and thematic conceptual synthesis procedures were employed to enhance methodological transparency, rigor and reproducibility.

3.2 Literature search strategy

A structured literature search was conducted to identify scholarly publications examining SFM, ESG, corporate sustainability and the social dimension of ESG. To ensure comprehensive coverage of this multidisciplinary field, searches were conducted in Scopus, Web of Science, ScienceDirect, and Google Scholar. The selected databases were chosen because they provide broad multidisciplinary coverage of peer-reviewed literature across the fields of facilities management, corporate real estate, sustainability, engineering, business and management. Scopus and Web of Science served as the principal indexing databases due to their extensive coverage of high quality scholarly publications and citation indexing capabilities, while ScienceDirect provided access to leading journals within the built environment and sustainability disciplines. Google Scholar was included to broaden the search by identifying additional relevant, highly cited publications that may not have been retrieved from the primary databases. Search terms were developed from the study objectives, research questions and foundational literature, and refined iteratively following preliminary searches and manual review of key publications. The search strategy employed Boolean operators (AND, OR) and truncation, where appropriate, to maximize the retrieval of relevant literature while minimizing irrelevant results. The literature searches were conducted between February 2026 and June 2026. Searches were performed within the title, abstract, and keyword fields where available. The search was limited to English language, peer-reviewed publications published primarily between 2015 and 2025, while earlier seminal studies were retained where they made significant theoretical contributions. Google Scholar was used as a supplementary source to identify additional highly cited and relevant publications not retrieved from the primary databases, and records were assessed against the predefined inclusion and exclusion criteria. Records retrieved from all databases were combined, duplicate references were identified and removed before title and abstract screening, and each study was assessed only once during the review process.

To improve the precision and reproducibility of the literature search, inverted commas (“ ”) were used to search for exact phrases (e.g., “Strategic Facilities Management ”), ensuring that databases retrieved records containing the complete phrase rather than the individual words separately. In addition, the Boolean operator AND was used to combine concepts and retrieve studies containing all specified search terms, thereby improving the relevance and specificity of the search results. Reporting the complete search strategy also enhances the transparency and reproducibility of the review (Booth et al., 2021; Page et al., 2021). The following representative search strings were applied across the selected databases:

• “Strategic Facilities Management” AND ESG
• “Facilities Management” AND “Social Sustainability”
• “Corporate Real Estate” AND ESG
• “Enterprise ESG” AND Workplace
• “Stakeholder Theory” AND Facilities Management
• “Employee Wellbeing” AND Facilities Management
• “Sustainable Workplace” AND Organizational Performance
• “Facilities Management” AND Corporate Sustainability

The review primarily considered literature published between 2015 and 2025 to capture the evolution of ESG and SFM within contemporary organizational contexts. Earlier seminal publications were included when they made significant theoretical contributions, particularly to stakeholder theory and SFM. To improve completeness, backwards and forward citation tracking of highly cited publications was also undertaken to identify additional relevant studies not retrieved through the initial database searches. The overall literature identification, screening, eligibility, and inclusion process adopted in this structured conceptual literature review is summarized in the PRISMA informed flow diagram presented in Figure 1, providing a transparent overview of the study selection process.

Figure 1 illustrates the PRISMA informed literature identification, screening and selection process adopted in this study. Although this research is a structured conceptual literature review rather than a formal systematic literature review, the PRISMA 2020 reporting principles were adapted to enhance methodological transparency, reproducibility and rigor by providing a clear audit trail of the literature identification and selection process. The adaptation of PRISMA reporting principles has been widely adopted in structured, integrative and conceptual literature reviews to improve the transparency and replicability of evidence synthesis (Snyder, 2019; Paul and Criado, 2020; Xiao and Watson, 2019; Page et al., 2021). Studies were selected using predefined inclusion and exclusion criteria to ensure methodological consistency and conceptual relevance. The review included English language, peer-reviewed empirical and conceptual studies focusing on SFM, Corporate Real Estate, Workplace Management, ESG, sustainability and the social dimension of ESG within organizational settings. Publications unrelated to the study objectives, focusing solely on the environmental or financial dimensions of ESG, residential settings, or lacking sufficient methodological or conceptual relevance, were excluded from the final conceptual synthesis.

3.3 Quality assessment, data extraction and conceptual synthesis

Given the conceptual nature of this review, the quality of the included literature was assessed based on scholarly relevance rather than on formal risk-of-bias assessment tools typically used in systematic reviews. Priority was given to peer-reviewed publications demonstrating conceptual rigor, methodological credibility, theoretical significance and direct relevance to SFM, corporate ESG and organizational sustainability. Seminal publications were retained where they provided foundational theoretical insights. To support a systematic comparison across the 93 included studies, key information was extracted from each study, including bibliographic details, research context, methodological approach, ESG dimension (S), SFM focus, and principal findings relevant to the study objectives. The studies presented in Table 1 were purposively selected from the full dataset to illustrate the breadth of methodological approaches, conceptual perspectives, and thematic contributions identified during the review, rather than to provide an exhaustive summary of all included studies. The extracted information was compared iteratively to identify recurring concepts, areas of convergence and divergence, and relationships between SFM and the social dimension of ESG. These comparisons informed the development of the higher-order themes underpinning the narrative and conceptual synthesis, as well as the proposed SFM ESG framework. The included studies were critically analyzed and synthesized through a narrative review approach, allowing for the comparison of theoretical perspectives, empirical evidence and conceptual developments. This process facilitated the identification of key trends, areas of consensus, existing knowledge gaps and future research opportunities relating to the role of SFM in delivering corporate ESG and sustainability objectives. The insights generated from the reviewed literature were synthesized to establish an integrated conceptual understanding of the role of SFM in supporting ESG implementation. This informed the development of the proposed conceptual framework, which illustrates the relationships and pathways through which SFM contributes to stakeholder value creation and organizational sustainability.

Table 1. Comparative synthesis of key studies examining SFM and the social dimension of ESG (source: author).

4 SFM and ESG

4.1 Defining SFM

FM has evolved from a cost-focused operational function to a strategic discipline that integrates people, place, and process to enhance organizational performance and user outcomes (ISO, 2024; Jensen et al., 2013). The International Organization for Standardization defines FM as an organizational function that integrates people, place, and process within the built environment to improve the quality of life and the productivity of the core business (ISO, 2024). This definition signals a fundamental shift, confirming that FM is no longer merely about maintaining assets but about creating value for both organizations and the people who inhabit their spaces. SFM represents the culmination of this evolution. It demands a comprehensive business planning approach that aligns facility decisions with the organisation's broader strategic goals and takes the lead in managing design processes, facility finances, and operations to deliver significant cost savings and improved bottom-line results (Cotts and Lee, 1992). However, SFM goes beyond cost reduction. As Barrett (2000) emphasizes, the recognition of FM as a strategic issue—driven by the changing patterns of work—requires facilities managers to engage in both operational and strategic interactions. This means developing strong relationships with key stakeholders, understanding the language of the executive boardroom, and demonstrating how facility decisions contribute to organizational success (Price, 2002).

4.2 The FM value map: a framework for understanding value creation

A significant contribution to understanding SFM's strategic potential is the FM Value Map, developed by Jensen et al. (2013). This framework provides a structured logic for tracing how facility-level inputs, processes, and outputs translate into outcomes for organizations and their stakeholders. The Value Map identifies three primary routes through which FM adds value:

• Exchange value—cost savings, asset appreciation, and financial efficiency that accrue to the organization.
• Use value—benefits experienced by users, including satisfaction, productivity, and wellbeing.
• Relational value—enhanced relationships with stakeholders, including brand reputation, social responsibility, and trust.

4.3 SFM's emerging relevance to ESG

The relevance of SFM to ESG lies in its capacity to translate high-level corporate commitments into tangible outcomes. Temmink and Flynn (2021) argue that corporate real estate and facilities departments are uniquely positioned to enhance organizational ESG performance, contributing to ethical compliance, risk management, stakeholder rights, supply chain integrity, and business continuity planning. Despite challenges such as inconsistent reporting standards and a lack of clearly defined roles, these departments can make substantial contributions to corporate social responsibility (CSR) reporting and ESG initiatives (Temmink and Flynn, 2021). Within the Environmental dimension, SFM's contributions are well documented, such as energy efficiency, waste reduction, water conservation, and carbon management, which are core FM responsibilities. The Governance dimension is also increasingly recognized, with facilities managers playing a role in regulatory compliance, health and safety oversight, and ethical procurement (Temmink and Flynn, 2021). However, it is the social dimension where SFM's potential remains most underexplored.

4.4 SFM and the social dimension

This perspective is further supported by recent research linking built environment decisions to human capital outcomes, such as diversity, inclusion, and employee wellbeing (McGrath and Worzala, 2024). For SFM, these translate into concrete responsibilities. Hodges (2005) argues that facilities managers have a pivotal role in implementing sustainable practices that generate long-term economic and social benefits for organizations. This includes creating environments that support occupant health and productivity, ensuring equitable access to facilities, and engaging with local communities to understand and address their needs (Douglas and Ali, 2019). Tammo (2014) extends this argument to the community scale, demonstrating that FM plays a crucial role in translating strategic community plans into operational realities. By prioritizing stakeholder value over narrow shareholder value, facilities managers can support sustainable community development for social, environmental, and economic prosperity. This requires a multidisciplinary approach that emphasizes the interconnections among place, people, and processes, which aligns directly with Stakeholder Theory's insistence on balancing diverse interests (Tammo, 2014).

4.5 Challenges and opportunities

Despite its potential, SFM faces significant challenges in delivering on ESG objectives. These include a lack of consistent standards for measuring social impact, limited empirical data linking FM practices to social outcomes, and a persistent strategic identity crisis that leaves FM departments struggling to communicate their value in executive language (Price, 2002; Mandell, 2022). Litvin (2023) emphasizes that technical systems alone are insufficient because what matters is the presence of trained professionals who can drive environmental and social agendas. Without investment in human capital and professional development, the strategic potential of SFM will remain unrealised. However, these challenges also represent opportunities. As organizations face increasing pressure to demonstrate authentic ESG performance, the demand for credible, measurable social outcomes is growing. SFM, properly integrated and supported, is uniquely positioned to meet this demand. The following section synthesizes recent developments in the field, highlighting the growing body of evidence for SFM's contribution to social sustainability.

5 Major developments and discoveries

5.1 The pivot toward the social dimension

A key discovery within the social dimension of ESG is the potential for SFM to move beyond internal building operations to foster broader social sustainability (Jensen et al., 2013; Alexander and Brown, 2006; Lok et al., 2023). Major developments include the prioritization of usability—the strategic management of the relationship between activities and physical space to improve user experience and social outcomes (Douglas and Ali, 2019). This concept recognizes that buildings are not neutral containers but active shapers of human behavior, wellbeing, and social interaction. When facilities are designed and managed with usability in mind, they can enhance collaboration, reduce stress, and promote inclusivity. Furthermore, FM's role in community settings has emerged as a significant lever for social justice. By translating strategic community plans into operational realities, FM professionals can manage facilities to improve social constructs and community wellbeing (Tammo, 2014; Mandell, 2022). This multidisciplinary approach emphasizes the interconnections among place, people, and processes, effectively positioning FM as a strategic partner that delivers measurable social impact (Jensen et al., 2013; Tammo, 2014). Roberts (2004) similarly argues that FM's contribution to community development lies in its ability to prioritize stakeholder value over shareholder value, ensuring that facilities serve the communities in which they are embedded.

5.2 Data-driven ESG reporting

A critical advancement in the governance of sustainability within the built environment is the integration of digital transformation and data-driven decision-making. Recent research highlights that SFM is increasingly reliant on Building Information Modeling (BIM) and the Internet of Things (IoT) to provide the granular data necessary for accurate ESG reporting (Zahid and Klungseth, 2024). This technological integration is crucial for ensuring governance frameworks are supported by robust empirical datasets (Zahid and Klungseth, 2024; Wang, 2024). It enables facilities managers to transition from static reporting to dynamic performance management, thereby providing comprehensive data support for these frameworks (Zahid and Klungseth, 2024). However, this technological shift is not without tension, as Nappi and de Campos Ribeiro (2020) caution that the same sensors enabling workplace optimisation also create risks of surveillance. This duality positions technology as both an enabler of social value (through improved comfort and efficiency) and a potential threat to privacy and trust—a tension to be explored further in section 5.

5.3 Social value as a competitive differentiator

A major development in the field is the shift toward Social Value as a distinctive competitive differentiator in the procurement of FM services. The increasing focus on the ‘Social' aspect (S) of ESG has led to the adoption of procurement strategies that prioritize local economic impact, fair wages, and inclusive supply chains over traditional lowest-cost models (Alexander and Brown, 2006; Jensen et al., 2013; Lok et al., 2023). This progression indicates that SFM is being utilized to drive inclusive economic growth through intentional engagement with small and medium-sized enterprises (SMEs) and community-based service providers (Semet, 2020; Lok et al., 2024). By embedding these social objectives, SFM (Alexander and Brown, 2006; Jensen et al., 2013; Lok et al., 2023) can contribute to the prosperity of the broader community while meeting corporate financial goals (Tammo, 2014; Lok et al., 2024).

6 Controversies and debates

6.1 The measurement problem: can social value be quantified?

A foundational debate within ESG literature concerns whether the social dimension can or should be measured with the same precision as environmental metrics (Porter et al., 2019; Semet, 2020; Mandell, 2022). Porter et al. (2019) argue that the investment community possesses the analytical tools to assess social performance, and that the real obstacle is a lack of organizational commitment. However, Semet (2020) and Mandell (2022) contend that the tools themselves are the problem. They point to the absence of standardized metrics, the subjective nature of social value, and the difficulty of attributing community outcomes to specific corporate actions (Semet, 2020; Mandell, 2022). This debate has direct implications for Facilities Management. If social value is fundamentally unmeasurable, then FM's contribution to the “S” in ESG will remain unrealistic and peripheral (Semet, 2020; Mandell, 2022). However, if the issue is merely a lack of appropriate frameworks, then the development of tools such as Social Return on Investment (SROI) could position Strategic Facilities Management (SFM) as a credible contributor to corporate sustainability reporting (Porter et al., 2019; Urban Land Institute, 2021). The Urban Land Institute (2021) highlights that defining and quantifying social value and integrating it into business processes remain challenges, with no consensus on standardized methods or tools. For the South African context, where historical inequality demands measurable redress, the absence of reliable social metrics risks rendering FM's potential impact invisible to decision-makers (Matakanye et al., 2021; Pollman, 2024).

6.2 Who's social? internal wellbeing vs. external community impact

A further debate concerns the proper scope of FM's social responsibility. A significant portion of the literature focuses on internal stakeholders, highlighting employee wellbeing, occupant satisfaction, and productivity gains within the workplace (van der Voordt and Jensen, 2023; Douglas and Ali, 2019). This framing positions FM as a support function that enhances human capital for the benefit of the organization. In contrast, Tammo (2014) and Mandell (2022) contend that facilities managers have a role to play in fostering community prosperity, social justice, and local economic development. This external orientation aligns with broader calls for corporate social responsibility but raises practical questions. Can FM serve both internal and external stakeholders simultaneously? Or does a focus on community impact dilute the attention and resources available for core operational duties? This debate is acute in South Africa, where historical spatial inequality means that the location and management of facilities have direct consequences for surrounding communities. An FM strategy focused solely on internal efficiency may negligently reinforce exclusion, while a community-oriented approach may struggle to demonstrate direct value to corporate clients.

Nurick and Thatcher (2023) demonstrate that indoor environmental quality in green-certified office buildings significantly influences the productivity and wellbeing of knowledge workers. Their study shows that factors such as lighting, thermal comfort, acoustics, and air quality shape workplace experience and can contribute to improved organizational performance. These findings highlight the role of the built environment in influencing social outcomes within organizations. From a Strategic Facilities Management perspective, this suggests that managing workplace environments can directly support the social dimension of ESG by promoting employee wellbeing, engagement, and productivity (Jensen et al., 2013; Lok et al., 2023).

6.3 Standardization vs. context sensitivity

The push for global sustainability frameworks has generated another controversy—enquiring if FM practices should be standardized across contexts, or must they remain locally sensitive? Lok et al. (2023) and Lok et al. (2024) advocate for aligning FM operations with the SDGs, arguing that standardized practices enable organizations to benchmark performance and communicate progress to international investors. Temmink and Flynn (2021) are critical of this approach and highlight the proliferation of inconsistent global rating systems, noting that the absence of clarity in ESG frameworks hampers rather than helps implementation. Moreover, Støre-Valen and Buser (2019) suggest that sustainability is inherently socio-technical, whilst it emerges from local contexts, relationships, and practices that cannot be reduced to universal metrics. For South African FM professionals, this debate is not abstract, given that the global standards may fail to capture the specific social challenges of the local context, such as B-BBEE requirements, high unemployment, and community expectations of corporate engagement (National Planning Commission, 2012; Swilling et al., 2016; Presidential Climate Commission, 2022). The risk is that FM departments pursuing international certification may neglect locally salient forms of social value (Urban Land Institute, 2021; Newell, 2023).

6.4 Strategic ambition vs. operational reality

Jensen et al. (2013), Lok et al. (2023), and Zahid and Klungseth (2024) argue that the theoretical case for Strategic Facilities Management (SFM) as an ESG enabler is well established. Frameworks such as the FM Value Map demonstrate how facility operations can contribute to brand equity, stakeholder relationships, and long-term sustainability (Jensen et al., 2013; van der Voordt and Jensen, 2023). Scholars increasingly position FM as a vehicle for delivering corporate social responsibility and sustainability outcomes through the management of workplaces and services (Lok et al., 2023; Zahid and Klungseth, 2024). Litvin (2023) and Barrett (2000) emphasize that technical systems alone are insufficient; what matters is the presence of trained professionals capable of integrating strategy with operational delivery. Without investment in human capital, the strategic potential of FM will remain unrealised (Elmualim et al., 2010). This gap between aspiration and capability is evident in contexts where FM departments still struggle to communicate their value in the language of executive leadership (Price, 2002; Jensen, 2008).

While studies are summarized in Table 1 collectively demonstrate the growing recognition of SFM as a contributor to sustainability and ESG outcomes, they also reveal important tensions and unresolved questions within the literature. In particular, scholars differ in their views on how the social dimension of ESG should be conceptualized, measured, and operationalised through FM practices. These divergences reflect broader debates concerning the quantification of social value, the ethical implications of digital technologies in smart buildings, the scope of FM's responsibility toward internal and external stakeholders, and the applicability of global sustainability frameworks across diverse local contexts. The following section examines these controversies in greater detail, highlighting the contested terrain within which SFM's contribution to the “S” in ESG continues to evolve.

7 A conceptual framework for SFM and social ESG

The development of the conceptual framework is aligned with the broader research design of this study, which is guided by a central research question focused on how Strategic Facilities Management (SFM) can support the social dimension of ESG. The framework reflects the study's aim of establishing a structured approach for integrating social sustainability into SFM practices, while also supporting the research proposition that SFM plays a critical role in achieving social ESG outcomes through stakeholder alignment. In this regard, the framework is not intended as a finalized model, but rather as a theoretically grounded structure that informs the research objectives and provides a basis for empirical testing.

What emerges from this review is a clear need for a structured approach that connects high-level corporate sustainability goals with operational facility-level decisions, while remaining sensitive to the debates and tensions that characterize the field. This section presents a conceptual framework (Figure 2) that integrates Stakeholder Theory with SFM practice to systematically address the “S” in ESG. The framework serves three primary purposes. First, it provides a theoretically grounded structure for understanding how SFM can contribute to social ESG outcomes, addressing the criticism that existing approaches lack conceptual coherence (Porter et al., 2019; Semet, 2020). Second, it offers practical guidance for facilities managers, corporate real estate teams, and ESG officers seeking to integrate social considerations into their decision-making processes (Hodges, 2005; Jensen et al., 2013; Temmink and Flynn, 2021). Third, it establishes a basis for empirical investigation, identifying key variables and relationships that can be tested and refined in future research (Pathirage et al., 2007; Wang, 2024).

7.1 Purpose and foundations of the framework

The framework is built on two theoretical pillars. The first is Stakeholder Theory (Freeman, 1984; Donaldson and Preston, 1995), which provides the normative and analytical lens for identifying whose interests matter and why. The second is the FM Value Map (Jensen et al., 2013), which offers a structured logic for tracing how facility-level inputs and processes translate into organizational and stakeholder outcomes. Together, these foundations position SFM not as a support function but as a strategic partner in corporate sustainability. Figure 2 comprises four interconnected domains that together provide a structured approach to integrating social ESG outcomes into SFM. The framework also recognizes that SFM intersects with all three ESG pillars. Environmental outcomes pertain to sustainable building operations and resource efficiency, while governance outcomes are reflected in compliance, accountability, and ethical procurement. However, the framework primarily foregrounds the social dimension by examining how facilities management practices influence employee wellbeing, inclusion, accessibility, stakeholder relationships, and community outcomes.

It is important to note that the proposed framework is intentionally conceptual at this stage. Its purpose is to provide a theoretically grounded structure to guide future empirical investigation rather than to present a fully validated model. The framework is designed to be tested, refined, and adapted through empirical studies across different organizational and geographic contexts. As such, its value lies not in immediate generalization, but in offering a foundation for subsequent research to validate relationships, test propositions, and develop context-specific indicators based on observed outcomes.

The framework begins by identifying the stakeholders relevant to facility-level decisions, drawing on the typology developed in Section 2. These include internal primary stakeholders such as employees, facilities staff and building occupants; external primary stakeholders, including local communities, service providers, and suppliers; and secondary stakeholders, including regulators, investors, the media, and the public. Recognizing that not all stakeholders have equal claims, the framework acknowledges that stakeholder salience, namely the priority given to competing interests, depends on power, legitimacy, and urgency (Mitchell et al., 1997). Facilities managers must therefore exercise informed judgement in balancing these interests, guided by Stakeholder Theory's normative commitment to considering all affected parties (Freeman, 1984; Donaldson and Preston, 1995; Freeman et al., 2004).

Building on this stakeholder foundation, the framework outlines the range of SFM practices through which social outcomes can be pursued. These practices include inclusive design and accessibility to accommodate diverse users; health, safety, and wellness programmes that protect physical and mental wellbeing; community engagement and shared use of facilities; ethical procurement and supply chain management ensuring fair labor practices; and diversity and inclusion in FM outsourcing by engaging historically marginalized enterprises as service providers and such practices reflect the growing recognition that facilities management can contribute directly to sustainability and social value creation through workplace design, operational practices, and service delivery (Hodges, 2005; Elmualim et al., 2010; Lok et al., 2023; Zahid and Klungseth, 2024). Through these practices, SFM interventions are expected to generate social outcomes across multiple levels. At the individual level, outcomes include employee wellbeing, satisfaction, health, productivity, and sense of belonging. At the organizational level, they encompass enhanced corporate reputation, stakeholder trust, talent attraction and retention, and social license to operate. At the community level, outcomes include local employment, economic inclusion, social cohesion, and improved quality of life, reflecting the broader societal contribution of facilities management (Alexander and Brown, 2006; Jensen et al., 2013; Lok et al., 2024).

The framework also recognizes that these outcomes are dynamic and require continuous monitoring and improvement. It therefore incorporates feedback mechanisms such as occupant satisfaction surveys, social impact assessments applying principles of stakeholder involvement and transparency, and ESG reporting and disclosure that communicate social performance to investors, regulators, and the public (Pollman, 2024; Newell, 2023). These mechanisms support the iterative refinement of SFM practices, ensuring responsiveness to evolving stakeholder expectations and emerging social challenges (Temmink and Flynn, 2021).

The framework supports the research objectives by providing a structured lens through which the role of SFM in delivering social ESG outcomes can be examined and operationalised across organizational and community contexts. To enhance its applicability, indicative metrics can be associated with each domain. At the individual level, employee wellbeing and workplace experience may be assessed through indicators such as absenteeism rates, satisfaction scores, indoor environmental quality (IEQ), and staff retention. At the organizational level, metrics may include productivity indices, diversity and inclusion ratios, health and safety incidents, and ESG ratings linked to social criteria. At the community level, indicators may include local employment creation, procurement spend directed toward SMEs or historically disadvantaged groups, Social Return on Investment (SROI), and measures of community engagement or stakeholder trust. While not exhaustive, these indicators provide a practical basis for translating the framework into measurable and reportable outcomes, supporting ESG disclosure and strategic decision-making.

7.2 Propositions

Based on the relationships illustrated in the conceptual framework, the following hypotheses are proposed to support future empirical investigation of the role of Strategic Facilities Management in advancing the social dimension of ESG.

H1: SFM practices focused on workplace health, safety, indoor environmental quality, and equitable workplace facilities positively influence employee wellbeing, workplace satisfaction, and organizational productivity.

H2: The implementation of inclusive design and accessibility focused facilities management practices positively influences perceptions of inclusion, accessibility, and stakeholder equity within organizational environments.

H3: Ethical labor practices and inclusive procurement strategies within outsourced facilities management services positively contribute to workforce dignity, supplier inclusion, and social ESG performance.

H4: SFM practices that prioritize local supplier participation, community engagement, and facility based economic inclusion positively contribute to community upliftment and organizational social legitimacy.

H5: Organizations that align SFM practices with stakeholder expectations demonstrate stronger stakeholder trust and improved social ESG performance.

Collectively, these hypotheses reflect the framework's central proposition that Strategic Facilities Management contributes to social ESG outcomes through stakeholder-centered interventions operating across organizational and community contexts.

8 Discussion

8.1 The South African context: why it matters

South Africa presents a distinctive context for examining the intersection of SFM and social ESG. This aligns with global real estate trends where the social dimension of ESG is increasingly viewed as a critical driver of long-term value and stakeholder trust (Newell, 2023). The country's history of spatial planning created deeply entrenched inequalities in the built environment. Communities were deliberately separated while economic opportunities and quality infrastructure remained concentrated in urban centers (Turok et al., 2021). These spatial injustices persist today, manifesting in unequal access to employment, education, healthcare, and public amenities (Turok et al., 2021; National Planning Commission, 2012). In this context, the social dimension of ESG cannot be reduced to generic metrics of employee satisfaction or community engagement. It carries a transformative imperative in which the expectation is that corporate actors, through their operations and investments, will actively contribute to redressing historical inequities and fostering inclusive growth (Urban Land Institute, 2021; Pollman, 2024; Newell, 2023). As Matakanye et al. (2021) demonstrate, stakeholders in South Africa (including investors, regulators, and communities) increasingly expect companies to demonstrate how their ESG performance addresses local social challenges rather than merely global benchmarks.

8.2 Opportunities for SFM in South Africa

In a country where many corporate facilities are located in or adjacent to under-resourced communities, the quality of community relations can significantly affect operational stability and reputational standing. Facilities perceived as extractive or exclusionary risk generating community opposition, whereas those that actively contribute to local wellbeing can build durable social cohesion. Tammo's (2014) emphasis on translating strategic community plans into operational realities is salient here, as SFM departments can facilitate community access to facilities like sports fields, meeting halls, and training spaces outside operating hours; invest in local infrastructure improvements; and consult with community representatives on facility planning decisions. FM is inherently labor-intensive and service-oriented, involving contracts for cleaning, security, maintenance, catering, and waste management. Each of these represents an opportunity for targeted enterprise development, where engaging SMEs and emerging cooperatives as service providers can contribute directly to local economic inclusion (Semet, 2020; Lok et al., 2024).

Persistent social and spatial inequalities continue to shape workplace environments in South Africa, influencing who can access, participate in, and benefit from organizational spaces (Swilling et al., 2016; Turok et al., 2021). Facilities that are not designed with accessibility in mind, whether for persons with disabilities, parents with young children, or employees from diverse cultural backgrounds, can inadvertently reinforce barriers to participation (Nappi and de Campos Ribeiro, 2020). The framework's emphasis on inclusive design and accessibility provides a lens for auditing and upgrading facilities to meet the needs of diverse users, including physical accessibility measures, sensory considerations, and culturally responsive workplace spaces. Such workplace design interventions align with research demonstrating the role of the built environment in shaping employee wellbeing, satisfaction and productivity (van der Voordt and Jensen, 2023). As South Africa also navigates a just transition toward a low-carbon economy, facilities management can contribute by ensuring that building retrofits, renewable energy installations, and infrastructure upgrades create employment and skills development opportunities for local communities and historically disadvantaged groups (Swilling et al., 2016; Presidential Climate Commission, 2022).

8.3 Challenges and barriers

South African FM departments struggle with the strategic identity crisis identified by Price (2002): they are perceived as operational rather than strategic, and their potential contribution to ESG is poorly understood by executive leadership. FM managers lack the mandate and resources to operate at their full potential. Additionally, the measurement challenges are acute in the South African context. While environmental metrics (carbon emissions, energy consumption) are relatively standardized, social outcomes such as community trust, employee wellbeing, and inclusive procurement are difficult to quantify. The absence of agreed-upon metrics makes it difficult for FM departments to demonstrate their contribution in terms that resonate with investors and regulators (Urban Land Institute, 2021). Capacity constraints are also a challenge, as Litvin (2023) and Barrett (2000) emphasize that technical systems alone are insufficient; what matters is the presence of trained professionals who can drive social agendas.

8.4 Applying the framework in South Africa

The conceptual framework presented in Figure 2 provides a structured lens through which the role of SFM in advancing the social dimension of ESG can be interpreted and operationalised within the South African context. In a complex environment characterized by socio-economic inequality, regulatory expectations, and organizational resource constraints, the framework assists practitioners in translating sustainability ambitions into practical decision-making. By systematically identifying stakeholders, practices, and outcomes, it provides a common language through which FM professionals can articulate their contributions in terms that resonate with executive leadership, ESG practitioners, and external stakeholders. This clarity is valuable in positioning facilities management as a strategic function that supports both organizational performance and broader social value outcomes.

In addition, the framework supports prioritization, measurement, and continuous improvement in facilities management practice. Drawing attention to stakeholder salience enables FM managers to make transparent and justifiable decisions about which social outcomes should be prioritized when resources are limited, while also acknowledging the trade-offs that may arise in practice. Although the framework does not prescribe specific metrics, it identifies key domains where measurement is necessary, providing a foundation for organizations to develop context-appropriate indicators to inform ESG reporting and governance processes. Importantly, the feedback mechanisms embedded within the framework emphasize that social outcomes should not be viewed as static achievements but as ongoing commitments requiring monitoring, evaluation, and adaptation over time.

9 Conclusion and future research

This paper has demonstrated, through a structured literature review, that Strategic Facilities Management (SFM), when viewed through the lens of Stakeholder Theory, provides a rigorous pathway for operationalising the often-neglected social dimension of ESG. In doing so, it advances a conceptual framework that integrates stakeholder perspectives into facility-level decision-making, addressing a critical gap in both theory and practice.

The study acknowledges several limitations. First, the proposed framework remains conceptual and has not yet been empirically tested. Second, the geographic focus on South Africa, while intentional, limits the generalisability of the findings. Third, while the study highlights the importance of measuring social outcomes, it does not fully resolve the challenges of developing standardized, universally applicable metrics, nor does it provide detailed guidance for navigating power imbalances among stakeholders.

These limitations point to important directions for future research. Priority should be given to empirical validation of the framework through case studies across diverse organizational contexts, among JSE-listed companies. Further research is also needed to develop robust measurement tools for social outcomes at individual, organizational, and community levels, with particular attention to marginalized stakeholders. Comparative studies across different geographic and regulatory environments would strengthen the framework's applicability, while deeper investigation into the dynamics of stakeholder power and inclusion would enhance its practical relevance.

This study offers important implications for theory, practice, and policy. Theoretically, it extends Stakeholder Theory and the FM Value Map by positioning SFM as a mechanism to embed social value creation in facility-level decision-making. Practically, it provides organizations with a structured framework and indicative metrics to translate ESG commitments into actionable strategies and measurable outcomes. From a policy perspective, the findings highlight the importance of aligning facilities management practices with broader socio-economic development objectives, in contexts characterized by inequality.

SFM extends beyond operational efficiency and building maintenance. Facilities shape inclusion, accessibility, wellbeing, and participation within organizational and community environments. Through inclusive planning, ethical procurement, accessibility, and stakeholder-centered practices, SFM can contribute meaningfully to social value creation and organizational legitimacy. Emerging research continues to reinforce the role of the built environment in shaping human capital outcomes, positioning SFM as a critical enabler of socially responsive ESG strategies (McGrath and Worzala, 2024). While the framework requires empirical validation, it offers a robust foundation for advancing both scholarly inquiry and organizational practice, strengthening the role of SFM in delivering socially responsive and sustainable built environments.

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Footnotes

Edited by: Marianna Gilli, University of Ferrara, Italy

Reviewed by: Serap Kalfaoglu, Selçuk University, Türkiye

Musmuliadi Kamaruding, Universiti Teknologi MARA, Malaysia