ESG insight and optimisation for long-term value creation

Value creation through ESG is the right path for real estate companies with a long-term vision, delegates heard at Real Asset Media’s ESG Reporting, Insight and Optimisation briefing, which took place in Amsterdam recently.

“There is a revolution underway and people who do not realise it will lose out,” said Paul Wessels, Founder, Blue Module. “There is a huge shortage of ESG-proof offices in the right locations, so these spaces need to be created.”

Regardless of the current backlash in the United States, ESG issues are not going away and remain central to investors’ decisions about what to buy. Investors avoid real estate that cannot provide proof of ESG performance.

The role of tenants and employees is crucial, as they demand sustainable buildings and require proof of it. “Corporate tenants will not stay in premises that are not ESG-compliant, and this trend will only increase,” said Wessels. “Young talent wants to work in a sustainable building and in a healthy environment, and this is not going to change.”

According to the Dutch Green Building Council, sustainable office buildings already achieve 21% higher rents.

“A sustainability clause is now mandatory for around 50,000 valuations per year in the Netherlands,” he said. “Measuring is knowing: implementation choices need to be based on measurable ESG objectives, and ESG insights are the key to optimisation and cost savings.”

Blue Module’s holistic software works with other companies such as Airteq, Freesi, Spaceflow and eFM to gather all the information, all the data and the documents needed about the asset – actual energy consumption, CO₂ emissions, building characteristics, air quality, indoor climate monitoring, community engagement and digital asset governance.

Once all the information has been gathered then the optimization process can start, owners can build a good business case and report on how the building is being improved.

“The customised ESG database for clients, available in the cloud or on-premises, contains portfolio dashboarding, reporting, ESG scores, and required sustainability investments,” Wessels said. “Climate risks such as earthquakes, drought, flooding, wildfires or foundation issues are visualised.”

As well giving a clear insight into sustainability costs, developing strategies through scenario planning and multi-year maintenance plans, it also adds “S” data about health, livability and wellbeing, including tenant feedback.

“Environmental impact and social aspects enhance each other in optimisations,” he said. “Technical expertise is essential, combined with a broad systems perspective. More efficient system adjustments and improved processes reduce operational costs.”