Tech will help solve ESG issues but there is no silver bullet
Property industry professionals should not wait for a magic wand solution to ESG issues but should start doing what is already possible, delegates heard at Real Asset Media’s European Real Estate in Transformation – ESG, Digitisation, Proptech & Investment briefing, which took place recently at Schroders’ offices in London.
“Don’t expect a silver bullet technology to solve all problems,” said Jules Barker, global director of product, WiredScore. “Most of the technology we need we already have. But we need to implement it at scale and in a structured way.”
The real estate sector is moving from a stage of discovery to a state of implementation. Now it is more about learning to use what is available and sharing knowledge and best practice. “It’s about cooperation rather than finding new technologies,” Barker said.
Like all ESG-related issues, this requires a change of mindset before there can be a change in behaviour. “The real estate industry is still built on a combative approach, trying to offload risk onto another party instead of working together to build better assets,” said Barker.
Slowly but surely things are changing. “Organisations like ULI are all about collaboration, sitting around the table finding good solutions,” said Clemens Brenninkmeijer, head of sustainable business operations, Redevco. “It’s a process that will inevitably take time, but it has started.”
The real estate industry is at a point of transition and it is crucial that it evolves in the right direction. Investments must be made not just in building assets, but in ESG and technology.
“By now people have grasped the concept that their assets will be stranded if they don’t act, but they’re not ready to take out their chequebook and invest a lot of money now,” said Barker. “The fact is that any ESG strategy has to be embedded in technology. You have to be able to measure, but most people have no idea what is happening in their buildings.”
The first step is collecting data, and the second is knowing how to use them. But companies need help to come up with a viable strategy.
“Unfortunately no solution does all of that in one package,” said Brenninkmeijer. “At Redevco we’ve collected energy data for 12 years and we’ve spent a lot of money smart-metering our entire portfolio. We’re working with nine different tools when we need to have one, but it will take time.”
Technology is moving in the direction of unifying, combining and simplifying, but it is work in progress. At the moment “it is still like the Tower of Babel, all speaking different languages”, said Barker.
Landlords often don’t have access to the energy data of their buildings, even if the tenants are in agreement.
“Energy companies’ data should be open source, but instead they protect their little patch,” said Brenninkmeijer. “There has to be acceleration on this, because we just don’t have the time. It prolongs the time to reach a much-needed solution.”
