Photo credit: ALFONSO1979  on Visualhunt.com
Photo credit: ALFONSO1979 on Visualhunt.com

ESG strategy : between ideal and reality

Tightening regulations, increasing climate change and increasingly demanding tenants and occupiers are driving companies - and property management companies in particular - to adopt an ESG strategy.

ESG stands for "Environmental, Social and Governance planning" and has now become a duty and responsibility of companies. According to United Nations estimates, real estate accounts for about 40 per cent of the world’s energy consumption and a third of all carbon emissions. To boost energy performance of buildings, the EU has established a legislative framework that includes the Energy Performance of Buildings Directive 2010/31/EU (EPBD) and the Energy Efficiency Directive 2012/27/EU which aims to achieve a highly energy efficient and decarbonised building stock by 2050.

Now more than ever, companies have a responsibility to minimise their environmental and social impact. This starts by ensuring that they reduce their energy consumption and proactively follow the sustainable procedures clearly defined in their ESG plan. Whether it is the tenant company, facility management or property management, all are involved.

While this may seem obvious to many, it needs to be said loud and clear because the evidence of environmental and health degradation is not yet being translated into design and investment decisions on a large scale.

What are the barriers to achieving environmental performance in property management?

 

Data quality

Consider the case of property management companies that decide to implement an environmental, social and governance (ESG) strategy. More and more of them are doing so, and with good reason. ESG planning is an essential part of real estate strategy. Not only does it ensure that buildings are attractive to investors and occupiers, but it also defines key performance indicators and reports on performance to stakeholders.

But there are 60 ESG criteria, and depending on the number of real estate assets, the number of indicators to be monitored can become very high. They have to be collected, reported to managers and analysed. This therefore requires a general mobilisation of all the players: Facilities Management, landlords, occupants.

 

There is also the heterogeneity of the data. Not all assets report the same data and the same quality of data. Some, for example, are well instrumented to provide crucial information on the quality of the indoor environment, such as that provided by GreenMe, while others are not.

Finally, the CSR (Corporate Social Responsibility) commitments of companies vary greatly: some are very committed, others are very far from these subjects. Access to data is therefore more difficult.

 

Proptech startups like GreenMe provide access to real-time actionable data and accurate reporting so you can meet your ESG goals.
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The second obstacle encountered in property management to achieve environmental performance is the human obstacle. Most of the time it is linked to a lack of understanding of the issues.

Although it seems obvious, for many the relationship between environmental performance and economic performance is not made. And for them, the missing link is the human being and his health. This is why it is essential to remove this obstacle by raising the awareness of all stakeholders: from human resources to the Work Environment Department (WED), including technical and operational maintenance.

Awareness-raising actions are not infantilisation actions, but information actions and must be very pragmatic to achieve the best results.

 

Building skills

Finally, a third obstacle to achieving environmental performance in property management is the lack of skills in the sustainable management of property assets.

It is necessary to be able to understand the energy, environmental and human challenges of such an approach. You have to be able to understand all the data collected and draw the necessary conclusions for the implementation of virtuous actions. We must also be able to measure the effects. Finally, we need to interact better with the occupants and understand what they expect. Optimisation and regulation also depend on a good understanding of the human factor.

 

There is therefore a need for a strong upskilling of the various business lines to adhere to the concept of sustainable building.  This is fundamental in order to anticipate climate, energy and societal issues.

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