Sustainability Through Technology: Achieving ESG Goals Digitally
With 37% of global carbon emissions attributed to real estate, meeting Environmental, Social, and Governance (ESG) goals are a key priority for property businesses in the UK as pressure mounts around the Government mandate to achieve NET Zero by 2050.
This increased sense of urgency and keen focus on digital innovation was reflected in the responses from industry leaders in a survey conducted earlier this year by the UK PropTech Association – British Property Federation (UKPA-BPF) and supported by REdirect Consulting.
According to the survey, industry leaders in both the real estate and PropTech sectors cited ESG as a key area that will experience the biggest benefit due to digital and tech innovation, with 78% of respondents expecting to see an improvement in their carbon emissions profile over the next three to five years.
The financial shift toward increased sustainability
In recent years, there has been discernible momentum towards aligning investment strategies with ‘green’ objectives across numerous sectors.
Institutional and real estate fund investors are increasingly factoring environmental considerations into their investment decisions. This shift will likely usher in a surge of green financing options, preferential lending terms for sustainable projects, and a growing demand for properties certified for their environmental credentials.
Meeting ESG goals and digital transformation can therefore have financial benefits for organisations and can have a direct impact on the bottom line and return on investment (ROI).
The impact on the life of a building
Meeting ESG goals will profoundly impact how buildings are managed, maintained, and lived in. Digital innovation has a vital role to play in the way sustainability is monitored and measured in the housing sector.
This was recognised in the UKPA-BPF survey, in conjunction with REdirect Consulting, that revealed more than 80% of respondents felt that there will be a high impact on improved building performance or lower building costs through digital innovation.
Adoption of new technology continues to be a barrier in the sector due to concerns around cost, a lack of clarity about return on investment, and quite simply, cultural resistance to the use of new technology. However, the advantages are numerous.
Data-driven energy management
One of the main opportunities for the housing sector when it comes to digital innovation is Data. Having access to reliable data enables property managers to monitor and evaluate building performance across a large property portfolio.
Outdated infrastructure and limited technology adoption are two of the major factors that hinder the gathering of complete and reliable data. However, recent advancements in ESG technology offer promising solutions.
These advancements empower property companies to leverage data-driven insights and analytics, enabling them to make more informed decisions as to how to optimise operations and implement targeted strategies for emission reduction across diverse portfolios.
Efficient data management
One of the great efficiencies of digital solutions is the consolidation of data on one platform.
By gathering all the required real estate information in one platform and making it easily accessible, property managers can contribute to a properly functioning portfolio and, more importantly, a more efficient and effective housing industry.
With more publicly available information on industry ESG data now accessible, improved analysis and more informed decisions can be made on the sustainability issues facing the industry.
By combining all asset data into one integrated platform, you can gain complete insight into the performance of your portfolio. This creates better opportunities to control costs and balance risks.
In 2019, Yardi launched its Elevate Suite, which provides in-depth operational data and predictive insights along with recommended actions to elevate asset performance by lowering costs, balancing risk, and increasing revenue. The Yardi Elevate Suite has been designed specifically with CEOs, COOs, asset managers, and other operational managers in mind. More robust insights, accurate forecasting, and improved project tracking will give your team the confidence they need to make stronger business decisions, particularly around ESG matters, with the reduced costs and risks that those decisions entail.
Keeping on top of compliance
You cannot get away from the fact that working to meet ESG goals involves reporting. Reporting is an integral part of compliance. However, digital solutions can take the chore out of this for property managers.
By implementing the right software, reporting can be automated to provide the necessary reports on a weekly, monthly, or quarterly basis. Digital solutions also ensure more accurate reporting, which is vital. The frequency of reporting and the data needed can also be tailored according to the needs of the business, whilst the automated processing saves time – freeing up your staff for more meaningful tasks. This feeds into the drive for greater efficiency.
Meeting ESG goals for a large property portfolio may seem like a steep uphill battle, especially when faced with cumbersome, outdated legacy technology, and cost considerations. However, by harnessing the right technology and software already available in the market to suit the individual business, property managers can streamline operations, use the data to improve building performance, and make positive decisions to enhance sustainability and achieve a solid return on investment. This in turn will have a positive impact on those living and working within your properties.
Byline: Callum Board, Client Success Director, REdirect Consulting
