Whether at an individual level or a company-wide effort, improving sustainability is a widespread goal these days. Many of us want to set up future generations to thrive and protect the environment. But how do you do so as a commercial real estate professional?
After all, environmental, social and governance (ESG) has been top of mind for companies for years, as more companies look to improve sustainability in their business practices and products. You can’t improve what you don’t measure, however, which is why we’re taking a closer look at how data and benchmarking can help with ESG efforts.
What Is ESG?
According to Investopedia, “Environmental, social, and governance (ESG) investing refers to a set of standards for a company’s behavior used by socially conscious investors to screen potential investments. Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls and shareholder rights.” This applies to nearly every industry.
ESG and CRE
Now, ESG is fairly understandable in today’s environment. But how does it apply to commercial real estate? One of the biggest relationships is with investing, as wherever there is an investment, that’s what investors financially support. This has given rise to terms like “impact investing” or “socially responsible investing (SRI)” and related focuses:
- Environmental: whether with the efficiency of the building itself or a direct waste-reduction industry.
- Social: driven by stakeholders much of the time, SRI strategies are focused on promoting companies with diversity, inclusion and community-focused goals.
- Governance: transparent accounting and avoiding conflicts of interest.
Whatever area of ESG matters to you and your company the most, you can have a direct impact on it with your CRE investments and the properties in your portfolio.
Improving Sustainability with Data
To improve your ESG efforts, key performance indicators come into play. Quarem is one of the best commercial real estate software solutions that implements goals like this on the back-end to automate data and help with decision-making. These goals can also vary depending on the focus you choose, but here are a few data points that real-world CRE pros and companies use to track and improve sustainability:
- Climate impact reports and forecasting
- Harmful emissions and ingredients
- Lower carbon footprints on processes and facilities
- Renewal energy consumption
- Reasonable living wages and benefits
- Employing a diverse workforce
- Operating fair and equitable supply chains
- Supporting underprivileged community groups
- Diverse and transparent leadership group
- Insights into finances and decision-making
- Fair board election and leadership process
If you’d like to see how CRE software like Quarem can help you use data and KPIs to improve sustainability, request a demo today.