Once considered a “nice to have,” reliable ESG data is now something that stakeholders expect and investors and regulators are beginning to require. So, if you’re not already collecting ESG information, the reality is that you’re falling behind the curve.
In a recent survey of real estate leaders conducted by Measurabl and Pulse, the majority (77%) of respondents noted that monitoring ESG is important for their organization. Thirty percent of leaders said the pressure to report and track ESG metrics comes from company executives, while 26% said that regulatory bodies are driving the need to disclose.
Collecting and tracking data is the first and perhaps most essential step. Getting this process nailed down can help organizations set larger goals around ESG, including increasing operational efficiency, building more resilient portfolios, and finding new ways to tap capital markets through sustainable funding.
Hitting Your Targets Requires More than Just an Annual Review of Your Data
ESG may feel like a burden at times—asset owners may see it as just one more type of information that needs to be collected, verified, and reported. Many firms that are new to ESG may feel like the cost, time, and resources spent checking these boxes outweigh the benefits.
However, the more timely, reliable data that asset managers have about a particular building, the more easily they can monitor usage trends, compare performance, and determine where exactly improvements need to be made. In fact, 44% of respondents in the Pulse survey cited “reduced operating costs” as the #1 benefit of tracking ESG performance, slightly beating out “compliance with reporting requirements” (42%).
Tracking ESG performance year round can help asset owners build a case for cost-saving retrofits such as smart glass windows, renewable energy systems, and high-efficiency plumbing systems. Having reliable ESG data on hand at all times can not only help asset managers understand how to allocate resources, but also allow them to track energy and cost savings as a result of existing projects.
Though the majority of real estate companies are tracking some level of ESG data, only 63% of leaders are “moderately-to-significantly confident” that they are able to gather ESG data required to make informed business decisions. This may be due to the way that data is collected: 36% of leaders say they still use manual processes, while 11% rely on consultants to track and store the data for them—which could result in data that is inaccessible or incomplete.
Gaining Better Access to Capital
Debt instruments like green bonds and sustainability-linked loans are an example of the new capital markets opportunities now available to real estate owners. To tap into the power of these new sources of capital, owners need to go beyond a “check the box” approach to ESG and instead be able to access specific ESG metrics on demand.
This especially rings true as investors become more wary of greenwashing. Though interest in ESG investing is on the rise, there is currently little guidance on what qualifies a company as ESG compliant or sustainable. Because the capital markets can’t rely on a single standard, what qualifies as material ESG data often varies from investor to investor. They may in turn request different types of information at various junctures, or they might require companies to report their ESG data to multiple benchmarks and frameworks, including GRESB, CDP, and SASB.
When building metrics like average energy and water consumption are trapped in spreadsheets or owned by a consultant, they can be difficult to find, manage, and share.
It is therefore essential that real estate owners have full ownership of their data, from meter to market. This approach allows them to ESG data all the way up from its most basic ingredients like building utility meters and efficiency projects implemented at the asset level, to portfolio-wide targets and DEI (diversity, equity, and inclusion) initiatives. Doing all this repeatedly, reliably, and scalably so it can be analyzed and shared outside your organization is the key. Capital markets want investment grade and actionable ESG insights, so ensuring data integrity, accuracy, and accountability along the way is the critical job of technology.
To get your data from these most basic aspects of operation all across your portfolio and organization, you’ll need a technology solution that can:
- Automate data collection from disparate sources globally.
- Store it in a central location accessible to all internal stakeholders.
- Visualize anomalies, flag data gaps before the information goes outside your organization.
- Format the data so you can easily share it with investors, third party ratings agencies, and capital markets.
ESG data is the backbone of your sustainability efforts—after all, you can’t manage what you don’t measure. Ensuring access to new capital opportunities depends on your ability to tell a compelling story backed by investment grade ESG data.
Want to learn more about how tech can help you seamlessly move your data from meter to market? Schedule a demo today.