With increasing pressure from investors, employees, customers, and the general public, corporations large and small are feeling pressure to evaluate how environmental, social, and governance initiatives (ESG) fit into their overall business strategy. This commitment to move the needle on ESG is enticing businesses to consider how their current office environments might align to their overall goals of providing safe and healthy working spaces for their employees and appeal to savvy investor preferences.
Sustainable buildings: Will your real estate organization be a step ahead or behind?
For real estate developers, owners and operators, we believe now is the time to invest in technologies and systems that may help differentiate your properties from the competition. Tenants will be looking for office locations that offer high-quality energy efficiency and air filtration systems, increased safety and security features, and more open-air “green” gathering spaces.
Developing your sustainability strategy
Our view is that sustainability drives business results and not the other way around. And while there is no cookie-cutter approach to ESG, your strategy should be defined in a way that relates to your business and speaks to stakeholders. Here we illustrate the four pillars of a successful sustainability strategy and how to apply them to your real estate business.
Pillars of successful sustainability strategies
Know where you stand
- Have a clear view on current state of organization
- Understand how your stakeholders view organization
- Understand materiality of sustainability initiatives
Focus your efforts
- Take a forward-looking view on resource scarcity
- Engage with stakeholders to find common ground
- Identify priority areas to address based upon materiality assessment
Communicate to stakeholders
- Look for ways to collaborate with stakeholders
- Understand what they need to know and want to hear
- Be clear and transmit message to consumers, employees, distributors, vendors, and other key stakeholder groups
Rigorously track results
- Create transparency
- Ensure that you have the right governance model to drive sustainability agenda
- Continuously push organization for higher goals
We recognize there are many challenges to ESG implementation, including how to properly report your progress to investors and stakeholders with the same discipline and rigor as financial information. In a recent report, the World Economic Forum established a broad group of industry-agnostic ESG metrics and disclosures that may be used to begin building your data repository. As a key business objective, ESG should be integrated into your overall real estate data strategy program.