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All hands on deck for an ESG strategy to be truly effective

In order to have an effective ESG strategy companies need to bring everyone on board, experts agreed at Real Asset Media’s Impact & ESG: Effective strategies for real estate briefing, which was held online recently on the REALX.Global platform.

“We know how to upgrade buildings and proptech helps,” said Jaap van der Bijl, CEO, Altera Vastgoed. “But then you need to use the buildings as efficiently as possible. The missing bit is creating awareness, because it’s the users of the buildings that make them efficient.”

Jaap van der Bijl.

That applies to all sectors, from offices to retail and from logistics to residential. The idea is to align the landlord’s goals with the tenant’s goals, but it’s easier said than done.

“The role of users is becoming more important when it comes to an asset’s performance,” said Rogier Bos, real estate finance Benelux, Berlin Hyp. “It is not always possible for our clients to assess what would make the building greener and they need the users’ cooperation which is not always forthcoming, in offices and in the resi sector as well.”

Regulation helps in providing the necessary push in the right direction, but the goal can only be achieved if there is an understanding between the parties.

“Tenants ask what is in it for me? And at this time of increasing costs they are right,” said van der Bijl. “So you need to open up the dialogue and be clear about what the advantages are and what the costs are. You need to relate to your tenants and your users.”

Ticking all three boxes

The same principle applies within a company: leadership from the top is crucial, but an effective ESG strategy can only be implemented if everyone understands it and shares it.

Ron van Bloois.

“After doing your homework and defining your path, you need to bring people on board to implement it,” said Christiane Conrads, EMEA Real Estate ESG leader, PwC Legal. “Everyone needs to understand exactly what he or she has to do to drive it forward. It’s a journey so you need to make a start and see what works for you. Mistakes are inevitable but it can be a lot of fun as well.”

A comprehensive ESG strategy needs to take all three aspects into account. Environmental compliance is the most measurable, but social impact and good governance are equally important.

“Having a purpose-driven vision means ticking all the boxes, even if it is not easy to measure social impact,” said Ron van Bloois, founder and CEO, Multiple Impact. “Investing in an office goes beyond the building to the development of the area and the impact on people.”

The ‘S’ is the well-being of tenants, investors and all stakeholders, which can involve additional services provided but also focus on affordability, which will be a recurrent theme. As for the ‘G’, it is all about transparency and accountability, the antidote to greenwashing.

“We’ve integrated the ‘E’, the ‘S’ and the ‘G’ into our model and try to find the measures that will have the most impact on all three,” said van der Bijl.