Companies that are proactive and address ESG issues before regulations force them to will reap huge rewards in future, experts told The Real Estate Day.
‘When regulations get tighter, as they inevitably will, we will be ready while others will be victims,’ said Lars Schnidrig, CEO, CORESTATE Capital Group. ‘We have screened our entire portfolio and identified the assets that need intervention. We take sustainability very seriously’.
There has been a real shift recently and pressure is coming from investors, he said: ‘Many of our clients have already decided they will only invest in asset management businesses that have a clear, transparent and demonstrable ESG strategy’.
Corestate has published its strategy and has 12 clear quantitative and qualitative targets addressing every ESG issue, in a constant effort to improve the quality of its portfolio. The plan is to achieve a 20% reduction in emissions, waste and water consumption by 2025 as well as a 30% increase in energy efficiency.
‘Words and statements of intent don’t matter anymore,’ Schnidrig said. ‘You need measurable goals, verifiable facts and certifiable actions’.
The German Property Federation (GPF) introduced a code on the sustainable management of buildings back in 2011 and since then has pushed for members to be pro-active and not just obey regulations.
‘We have been working on green leases, on benchmarking and on valuation issues to try and be ahead of the curve,’ said Bärbel Schomberg, Vice-President of GPF and Partner, Kingstone Investment Management. ‘You have to measure it, otherwise you can’t manage it’.
Collecting and analysing data can be daunting, but technology is making measuring and managing easier.
Measurabl, a California-based software company, has created an environmental data management platform, designed for the CRE sector, which automates the process of collecting environmental data on buildings, making it easier and smoother.
‘Technology and innovation can help in collecting and analyzing data, simplifying and streamlining the sustainability recording process and deriving actionable insight for CRE owners,’ said Sara K. Anzinger, Senior Vice-President, Measurabl. ‘Our benchmark on carbon, energy and water consumption and waste, combined with target tracking, can show exactly how the asset or portfolio is performing relative to peers’.
As knowledge filters through, the process is no longer seen as a burden but as a potential game-changer.
‘Property owners are realizing that not only can it reduce operating expenses, but there is a lot of upside in terms of revenue generation that can be realized as well,’ Anzinger said. ‘It leads to higher occupancy and rental rates and it provides a defense against systemic risk in a downturn’.
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