Real-estate technology plays a crucial role in addressing environmental, social, and governance (ESG) issues. Over the next few years, ESG is expected to be a primary driver of real estate technology adoption.
We have asked a few questions to Alan Colquhoun, Advisor to the Management Board of Velis Real Estate Tech, about ESG, real estate, and PropTech.
1. ESG strategy – Why Companies Implement ESG strategies?
The simple answer is an ESG strategy is the right thing to do, and it's doing the right thing. Companies are embracing this to make the world a better place for all of their stakeholders, so it's not just about profits and shareholders, which of course remain important, but it's about their employees, their clients, and the environment in which they work.
2. Is ESG Just a Good Practice or a Legal Requirement?
ESG is for sure a good practice, and arguably parts of it are a legal requirement or are becoming a legal requirement. For example, governments are writing net zero-emissions targets into law, and companies have to respond to that. On the social side there's employment law, on the governance side there are reporting requirements. So, some of it is indeed a legal requirement, but overall it's much more about good practice and making things better.
3. Why ESG Is Important?
Why ESG has become a hot topic for commercial real estate? CRE together with transport are the biggest sources of carbon emissions, which of course is extremely important, and has suddenly become very topical and very urgent. That’s probably the main reason why ESG has now become much more important, and is being taken much more seriously by the commercial real estate sector.
4. What Do Real Estate Companies Specifically Do Regarding ESG Strategies?
Like all companies, real estate companies are doing much the same. Their ESG strategy is as if you like bringing transparency to the whole process, so the main thing that all companies have got to do, is to actually start measuring and recording data and reporting it.
These are the big activities that having an ESG strategy involve and the important thing is, whereas in the past some things, such as Corporate Social Responsibility were often seen as a “tick-box” exercise - things that were done and left in the filing cabinet - or where, cynically, you could say that some of the sustainability reporting was greenwashing.
The big difference now, particularly in the real estate sector, is that we have moved beyond that and these earlier tick-box and greenwashing reports have now become serious action plans with measurable commitments, measurable goals, and transparent reporting. That’s the big difference.
5. What Are Global Standards That Real Estate Companies Can Apply?
There are a whole bunch of global standards and a part of the challenge is that there is no single globally agreed definition or standard, for example, of net zero. There are many reporting frameworks that can be used and what you'll find is that companies will choose, one, two, or three, and they may report within different frameworks.
One of the standards that has become increasingly important and adopted by the commercial real estate industry, particularly the investment funds, it GRESB (Global Real Estate Benchmarking). GRESB seems to becoming a common denominator, certainly for properties that are owned by investment and pension funds and so on.
6. Benefits of Investing in ESG
If developers, construction companies, real estate owners, or managers don't take ESG seriously, or they continue to greenwash or box-tick, then the simple answer is they're going to lose clients because companies will not want to deal with them.
Companies are becoming more demanding and setting the standards. The simple answer is that to get the support of all of their stakeholders, shareholders, clients, customers, staff, even to attract and retain staff and talent they’re going to have to have very visible and effective ESG strategies because without that, they probably can’t survive in the market anymore.
The whole thing regarding companies providing technology for real estate is about data, recording the data, analyzing it, reporting it, measuring it, and of course that’s the area where ESG tech is best suited.
7. How Can PropTech Impact the ESG Policies of Real Estate Companies?
PropTech solutions, for example products like Singu, connect all the stakeholders on a single platform, so that landlords, fund managers, asset managers, property managers, maintenance staff, tenants, office managers, have access to what they need to have access to, on a single platform.
Real estate technology links the physical world with the virtual, digital world, and so therefore PropTech is essential if ESG commitments are going to be met.
Learn how Singu can help you reach your ESG policy goals. Get a free consultation and find out what Singu solutions can do for your real estate.
Do you prefer listening? These and other questions have been answered in our latest interview with Alan. Check it out here: