The real estate sector suffers from a substantial ESG skills gap that needs to be addressed as it is becoming a serious problem, according to research done by Evora Global, a sustainability technology and services company.
“Real estate investors lack basic environmental, social and governance skills and risk falling foul of legislation unless they ensure their teams are properly trained,” said Paul Sutcliffe, co-founder and chief operating officer, Evora Global. “There’s a shortage of expertise in the field and this is problematic as there’s a growing amount of legislation where understanding ESG data and regulations is crucial.”
Better training is needed for real estate investors, almost a quarter of whom have no ESG training and no plans to upskill relevant staff.
“Training in ESG is increasingly important for today’s real estate investors, but is still too often overlooked,” Sutcliffe said. “This is an area where the industry clearly needs to improve.”
Evora’s latest Insights into Real Estate Investment Sustainability (IRIS) report revealed that 24% of real estate investors lack an ESG training program or any plan to put one in place.
“This highlights a lack of training in the investment industry and this is where ESG knowledge is absolutely crucial,” he said. “Without access to strong ESG data and the skills to interpret it, investors are exposing their organisations to significant risk.”
Investors need to upskill relevant employees, those who are involved in investment decision making, to understand ESG regulations and ESG integration.
“Those trained in ESG have a good understanding of legislation and regulations and can therefore guide their organisations through difficult decisions and ensure they are aware of risk throughout the investment cycle,” Sutcliffe said.
ESG training is also increasingly data focused and about providing hard numbers to back up decisions and make investments.
“ESG is no longer in the ‘nice to have’ category, it’s actually a data pragmatic approach to evaluating and mitigating risk in an increasingly complex environment,” he said.
Since the pandemic, Evora has been providing free-to-attend seminars on ESG for real estate professionals in the real estate industry. The Evolve series has attracted over 2,000 sign-ups with attendees from some of the world’s biggest real estate funds.
“Our experts break down the complex jargon of ESG into everyday language and provide a clear and structured learning pathway, covering specific topics like Net Zero and sustainable finance,” added Sutcliffe. “What started as a lockdown initiative has evolved into a very global education series.”