Just as the effects of climate change have intensified, so has the pressure to align private sector finance with climate solutions. Sustainable finance, which includes green bonds and sustainability-linked bonds and loans, is becoming a dominant force: it reached $465 billion in 2019, up 78% from 2018 and more than 10x the issuance just five years prior. Sustainable finance can further propel the ESG movement and facilitate the shift from traditional to sustainable economic and credit activities. But in order to set this in motion, companies must be able to report accurate, complete ESG data.
The commercial real estate (CRE) sector is well represented in sustainable finance. Measurabl has identified more than 75 green bond issuers in the real estate sector alone, and government-related entities and financial institutions have also issued green bonds and allocated proceeds to green buildings via mortgage loans. CBI reports that 30% of all green bond and loan proceeds were allocated to buildings in 2019.
New legislation is also having an impact on ESG data disclosure for real estate assets. Spurred by its commitment to achieve goals set forth by the Paris Agreement, the EU has established directives in 2018 and 2019 to reduce the carbon footprint of its current buildings, issue energy performance certificates, and encourage renovations that will improve energy efficiency. Governments worldwide will look to the EU to establish their own standards and best practices for CRE asset managers and owners. This will undoubtedly affect the way green debt is issued, as well.
Currently, the most commonly cited reason for not opting to issue green debt is a lack of data and resources required to collect and report impact metrics. Inputting, tracking, and disclosing this information manually without a tech-founded solution at hand can prove next to impossible.
Enter Measurabl. Our ESG data management software serves as a central repository for the collection and monitoring of asset-level performance data. Measurabl’s automated data collection, data integrity, and streamlined reporting functionalities result in a platform that not only facilitates operational performance improvement but also supports impact fund management and accelerates green financing activities.
Read our latest white paper to learn more about how Measurabl can help lenders, debt underwriters, ratings agencies, and real estate owners navigate their ESG journeys and bolster their sustainable finance programs.