Skip to content

ESG is a ‘Balloon, Not an Anchor’ for the Real Estate Industry

CORESTATE Capital Group, a European investment management firm with approximately 26 billion Euro (30.7 billion USD) in assets under management, is one of Measurabl’s most innovative customers. CORESTATE uses Measurabl’s platform to measure, manage, and report ESG data for its real estate assets. 

Recently CORESTATE spoke with Matt Ellis, Founder and CEO of Measurabl, to discuss how the company has leveraged Measurabl’s platform, some of the major challenges for ESG in real estate, and a long-awaited digital transformation that is currently taking place in the industry. Watch the full interview or check out the transcript below. 

What does Measurabl do and how does CORESTATE use it?

Measurabl is an ESG data management software specifically built for commercial real estate. We’re used by about 9 billion square feet or 850 million square meters of property in 75 countries to help them collect, quality assure, and disclose ESG data. Corestate is one real example of how we do this in partnership with our customers. You have on-the-ground, operational expertise to know where the data is and we have the tool to bring that data out. 

With CORESTATE, you’re looking at a large portfolio of assets, multiple tenants in those assets, each with their own unique circumstances. You’ve got to get utility data, regulatory data, certification data, and not to mention project data—things that are done to approve the assets— and bring that up to the viewpoint of the executives at the portfolio level and ultimately up to the investors who are funding the portfolio and looking for superior returns. 

What are some major challenges for ESG in the real estate sector?

There are two that come to mind immediately. One is that we have a lack of high data quality—what we call investment grade data quality. We’re moving past the phase where there is no real information for folks to report and on to a phase of whether that information is there, but it needs to be credible, accurate, and timely. This is a systemic issue in the business. It’s one that we’re keenly focused on and our customers are as well. Data quality really needs to be the place where we all focus our time and energy so that we have enough operational information to make decisions as real estate owners, and investors have enough high quality, trustworthy data to allocate capital effectively. 

The second one is digital transformation. For ESG to be successful, we need to move past a place where it is subjective or a matter of opinion and get to a place where it is quantified. To do that, we’re going to need technology. We can’t do that in spreadsheets or by telephone. The problem with that second piece is that technology adoption is difficult for organizations—especially the real estate sector. Relative to sectors like healthcare, or telecommunications, or banking, real estate is one of the last industries to really make the transition to high tech. That takes a tremendous amount of cultural change as well as a real revisiting of what the business is. 

CORESTATE has been a shining example because they recognize that ESG is a core operating requirement, and as with any core property requirement, they’re going to have to leverage technology. 

How does data management support the advancement of ESG?

There are a few cliches I can use here. “Data is destiny.” Or, “You can’t manage what you don’t measure.” Those are fundamental truths. Data is the starting point for any real informed conversation. You would never go to your executive team with a recommendation that wasn’t supported by the data. For a long time, ESG was about doing the right thing or positioning the brand, and now it’s about access to capital. It’s about the CEO and CFO, and they’re not going to make decisions that aren’t driven by the data. 

What is the future of ESG in the real estate sector?

The next step for ESG in the real estate sector is to find new levers to create greater value. Once upon a time, the real estate universe was able to work and create value through a very narrow set of tools. Now we have to take that set of tools and add two or three or four more. We’re now measuring the extent to which the entity creates value with governance and social inclusion, and the extent to which the portfolio reduces impact on the environment and can get credit for that, in the form of access to capital. 

Real estate professionals need to understand that ESG is not an anchor, it’s more like a balloon lifting the portfolio up. And it’s these different levers that we can now use to compete and outcompete that we need to pay attention to. 

Ready to take your ESG performance to new heights? Schedule a demo to see Measurabl’s ESG data platform in action.