Whether you’re starting a sustainability program from scratch, or preparing to disclose your ESG performance for the first time, figuring out where to start can be a little daunting. Your jumping off point will differ depending on many factors, including the size of your portfolio and the amount of resources your firm has dedicated to quantifying and improving ESG performance.
But regardless of whether you’re a sustainability rockstar or just dipping your toe into the ESG space, there are a number of common milestones to reach for as you begin developing your strategy.
1. Gathering data and defining what’s material
There are a few basic metrics that are universal to ESG performance, including energy and water consumption and waste diversion. Many firms have this data on hand from monthly utility bills, though it often comes from disparate sources. Firms that don’t have data will need to begin collecting it at this point.
Then it’s time to drill down and ask yourself: How does this data relate to your overarching sustainability goals? Many companies have benefited from taking the SMART approach to goal setting. At a glance, this means the objectives they set have specific intentions, measurable with data, reasonably achievable, relevant to the company’s overall mission, and can be completed in a timely manner.
But when it comes to figuring which data to collect and focus on, you have to ask yourself a few basic questions: What are you setting out to achieve? What do your stakeholders need to know? And from a logistics standpoint, how will you get accurate, investment grade data on a continuous basis? If you plan your approach to ESG with these factors in mind, you’re well on your way to clearing your next hurdle.
2. Disclosing for the first time
Once you’ve begun collecting material data, it’s time to find a way to disclose your performance so you can compare it with peers, and, let’s be honest—boast about your progress! In the beginning, many companies opt to engage with relevant parties, such as investors, to establish which variables are most important for them to report.
In some cases, groups rely upon established benchmarks like GRESB and CDP. These organizations have established standards and guidelines for disclosure. They also issue a score based on fixed criteria, and allow firms to compare their performance with a pool of their peers.
Whichever way you choose to disclose, it’s important to understand the differences between benchmarks as well as what each one is looking for, so you can gather specific data to meet their requirements. Reporting for the first time can be an adventure, so it helps to have a tech solution in place that can help you gather everything you need.
Once you’ve met your reporting deadlines, and you have your results, congratulations! Reporting your ESG performance for the first time is a huge win for your sustainability program and gives you a baseline for future improvements.
Read: The Top Five Sustainability Frameworks You Should Know
3. Getting certified
With increased focus on sustainability throughout the CRE industry, a dizzying array of green building certifications have emerged. You can review popular certifications including BREEAM, ENERGY STAR, and LEED, to determine which certification is the best fit for your ESG goals. It’s not uncommon for firms to go for multiple building certifications. Regardless of which certification you pursue, having accurate, complete ESG data at hand is critical.
The reality is this: The ESG Era is upon us, and it’s quickly evolving. That means that most companies need more than a single snapshot of their performance. Certification requirements can evolve over time and many are limited in scope. So how do you truly underscore your company’s performance?
Watch: The ESG Era: New Sustainability Metrics for Commercial Real Estate
4. Developing your own corporate sustainability report
Reporting to benchmarks is a great way to get started and compare your performance with other firms that disclose their ESG data. But a major win for ESG managers is to publish their own custom sustainability report. This allows firms to spotlight the initiatives they are taking to improve while appealing to stakeholders’ unique wants and needs. Instead of just doing it once a year, they can disclose performance as often as they need or want to.
Sustainability reports can also go a long way in boosting morale: When firms take the reins and report data that’s most important to them, they can seriously motivate their employees to keep striving for better outcomes. Transparency is foundational to creating a corporate culture that truly drives change. Without buy-in from the whole team, sustainability initiatives will ultimately be limited in scope and impact.
5. Doing more with your data
As soon as you start tracking your ESG data, you can already begin to analyze your performance on an ongoing basis. Reporting that data can help you compare performance to your peers in the industry, but as athletes often say, your fiercest competition is you.
With your tech solution doing all the number crunching in the background, you can easily identify areas that need improvement, and understand how different projects and initiatives are affecting your numbers. For example, Measurabl allows you to set sustainability targets so you can visualize your progress and determine whether you’re on track to meet those goals.
You can also take your sustainability program a step further by using your ESG performance data to determine your portfolio’s resilience to the effects of climate change. Physical climate risk has recently entered the spotlight as owners and investors have witnessed the crippling effects of hurricanes, flooding, and other natural disasters. Firms can assess and combat these risks by examining their asset-level data to determine which of their buildings are likely to be affected by climate-related events as well as ongoing environmental shifts like rising sea levels and heat stress.
Though it may seem intimidating to get your sustainability program up and running, these are just a few of the milestones that companies can look forward to—and they are all attainable with the right tools and strategies in place. To learn more about the ESG journey and where your company lands on that timeline, check out our upcoming webinar, “Hitting Key Milestones Along Your ESG Journey.”