The ESG Real Estate Challenge — is it possible to have Green Buildings?
Living In Israel, one is privileged to see a lot of construction — a lot of high-rise offices, and residential construction. The first thing I notice is that there is a lot of concrete. I am going to repeat it — I see a lot of concrete. So, I ask is it possible to have Green Building, net-zero buildings?
With buildings being responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU2, carbon reduction and sustainability to the real estate sector is a big challenge and opportunity.
ESG has moved to the top of the agenda in the real estate sector and undoubtedly ESG sustainable investing is at the top of the agenda in the financial industry. The impact on real estate players is significant ranging from regulatory and tax topics to strategic planning and operational decisions.
So, where do we start on this Journey?
Let’s look at UNSDG which is the basis of ESG?
Industry accounts for over 19% of global water withdrawal, and agricultural supply chains for 70% more. Energy supply accounts for around 60% of global greenhouse gas emissions.
So here you have the need for Innovation and Measurement. Disclosure Reporting is key to the Water and Energy challenge which must be included in ESG Metrics.
We will later in this article, introduce GCX Dash who are helping leading real Estate organizations meeting this challenge with a Digital, automated data, measurement, and analytics platform.
GOAL 11 — SUSTAINABLE CITIES AND COMMUNITIES- MAKE CITIES INCLUSIVE, SAFE, RESILIENT, AND SUSTAINABLE
The cities of the world serve as platforms for exchanging and displaying ideas, cultures, social interaction, development, and economic productivity.
While the development of urban activities is essential for a country’s growth and prosperity, it is also important that it happens without depleting or damaging our resources.
Cities face the challenges of overpopulation, lack of housing, insufficient infrastructure, and pollution due to industrial activities. Over 3.5 billion people in the world live in cities. These growing numbers place pressure on health services, freshwater supplies, and infrastructure.
Although cities only form about 3% of the earth’s land surface, they utilize about 60–80% of the world’s energy consumption. On a positive note, well-managed cities can provide us with more efficiency and technological growth to minimize the use of resources and energy.
The upgrading of slums by providing safe and affordable housing and basic services is what SDG11 strives to achieve by 2030.
Creating affordable, safe, and sustainable transport systems, especially for children, women, and individuals with disabilities, is another aim of this SDG. The progress within cities should not be at the expense of the world’s natural and cultural heritage, rather enhance and protect it, hence why SDG 11 will focus on the management of waste and general pollution to reduce cities’ environmental impact and make them safe, green spaces.
This goal gives rise to opportunities in urban redevelopment, low-cost housing, building refits, and more.
So, let's look at these Challenges and Opportunities.
There are tremendous opportunities here. Real Estate developers and owners can benefit much from adopting ESG. It does not have to be more expensive and indeed with better Innovation planning, energy efficiency tools then there is potential for costs savings and business opportunities.
The Green Build Innovation challenge
Concrete is bad. Cement production alone is one of the worst polluters in the world, responsible for 8 % of global CO2 emissions. On the other hand, concrete is necessary. It is high load-bearing, versatile, easy to produce, and will continue to be a key structural material until an adequate replacement is found.
This calls for Green Build Innovation — and additionally innovative methods and technologies that produce energy efficiently and effectively extend the life of buildings and/or their components.
On The Green Build side, there is a host of Innovation. Some examples:
Low Carbon concrete — https://www.cemex.co.uk
Low Carbon concrete — https://www.geoplastglobal.com
Energy-generating glass facades — https://sunewat.agc-activeglass.com
Integrated Solar Roof Panels
Energy Efficiency Utilization — https://www.se.com
Maximize electrification -Benefit from a smart, connected infrastructure that produces, stores, distributes, and shares power.
Actively manage energy -Access real-time integrated data from energy and sustainability departments in a global platform.
Create positive energy buildings -Generate, store, and distribute energy and then feed excess power back to the smart grid.
Sustainable retrofits — Digitize existing systems with connected sensors, power conditioning, energy monitoring and control devices.
Microgrids — https://www.brightmerge.com
Microgrids can create carbon-neutral buildings and reduce energy costs. Digitally driven energy management initiatives are allowing companies to operate sustainably while gaining the rewards of reduced energy costs and a smaller carbon footprint. Microgrid adoption, increased distributed energy resources (DERs) use, better DER integration, and battery storage are some of the technology tools that drive these energy improvements across industries, from digitized manufacturing plants to smart distribution centers.
Green Build Verification
Real Estate Companies need to start embedding Carbon & ESG Accounting Data in their assets, This starts in the Development phase and continues in assessing existing Buildings. This extended to the full supply chain — sub-contractors, materials usage, etc.
Verification Standards — Most countries have or are adopting Green Building Standards such as The National Green Building Standard (NGBS) which is the only green building rating system for homes and apartments approved by the American National Standards Institute (ANSI)
Certification goes well beyond saying a home is energy efficient; it provides independent, third-party verification that a home, apartment building, or land development is designed and built to achieve high performance in six key areas: Site Design, Resource Efficiency, Water.
The GRESB Real Estate benchmark
Mission-driven and investor-led, GRESB is the environmental, social and governance (ESG) benchmark for real assets. We work in collaboration with the industry to provide standardized and validated ESG data to the capital markets. The 2020 real estate benchmark covers more than 1,200 property companies, real estate investment trusts (REITs), funds, and developers. Our coverage for infrastructure includes over 500 infrastructure funds and assets. Combined, GRESB represents USD 5.3 trillion in real asset value. More than 120 institutional investors, with over USD 28 trillion AUM, use GRESB data to monitor their investments, engage with their managers, and make decisions that lead to a more sustainable real asset industry.
One of the key challenges is to document, extract, measure the components to meet these standards.
GCX Dash who are registered with GRESB is helping leading Real Estate organizations to meet these Standards with their Digital, automated data, measurement, and analytics platform.
Energy Efficiency & CO2 Reduction
This goes beyond your own building and energy efficiency. Green buildings and communities reduce landfill waste, enable alternative transportation use and encourage retention and creation of vegetated land areas and roofs. … All of these strategies significantly reduce the carbon footprint of buildings and occupants beyond what energy efficiency alone does.
Additionally, it is worth considering these 10 steps to reducing embodied carbon
· Reuse buildings instead of constructing new ones. …
· Specify low-carbon concrete mixes. …
· Limit carbon-intensive materials. …
· Choose lower-carbon alternatives. …
· Choose carbon sequestering materials. …
· Reuse materials. …
· Use high-recycled content materials. …
· Maximize structural efficiency.
While your Architect can help address these issues, it would be wise to choose a provider who has deep experience in this sector.
GCX Who are assisting many Leading Real Estate players are able to source Innovation about Energy Saving, track Data, and provide proven methods of reduction and saving.
They also have a Zero Waste Division with a deep understanding of new technology and how it should be tested in preparation for rollout to commercial operations. We find the solution to every problem through our technical knowledge and chemical engineering skillset. https://zerowaste.co.za/projects
Data Extraction, Measurement, and Reporting
Real Estate Companies need to start embedding Carbon & ESG Accounting Data into their assets, This is extended to the full supply chain — sub-contractors, materials used, etc.
Improving energy efficiency in existing buildings plays a key role in achieving the carbon-neutrality by 2050. Companies will need to adopt a more circular economy approach and adopt Energy efficiency & waste assessments. To this end, it is highly desirable to use a Carbon Accounting platform to measure the performance and problem areas. From this base, the use of innovative methods and technologies that produce energy efficiently and effectively extend the life of buildings and/or their components will need to beadopted.
The underlying starting point is Data and all-in-one ESG Platform that covers:
- Data capture, measurement, and Reporting
- Energy efficiency, CO2 reduction, co2 reduction
- Green Build — Innovation and Verification
- Analytics — Tenant, Asset, and portfolio views
Let’s dig deeper and look at — Data capture, management, Reporting.
The big question to tackle is — Where can I get access to the data to measure Scope 1, 2, 3, and HR and social impact?
It should not come as a surprise, but Accounting systems can not handle this. Even modern accounting systems do not scan, track the detailed level of data needed to deal with ESG data.
In addition, even with the help of the CFO and his team, this will be a challenging, time-consuming, costly exercise.
So, what is the solution?
In response to this challenge, I have set up the Digital CFO — a new way to deal with Data and ESG.
In essence, you now have what is dubbed Carbon Accounting or ESG Accounting.
Just like a few years, there were no head of ESG jobs, you will in the next few years have ESG Accounting systems or Carbon Accounting systems.
Based on my many year’s experience as CFO, in my search for a solution, I recommend using a 3rd party digital ESG Platform solution. There is only a handful of these providers in the world.
Recognizing the need for a digital ESG Platform, The Digital CFO has teamed up with GXC — Dash.
GXC DASH is the first choice, leading Sustainability ESG Platform provider to leading blue-chip companies with a strong focus on service and Hitech, companies real estate, hotels, and food retailers and supply chain.
The GXC ESG platform provides real-time business intelligence analytics solutions including automated Data Capture + Data Hub + Real-time Dashboard & Reporting and solutions for offsets & reduction.
So, let’s look at some of the issues that needs to be addressed.
Benefits of adopting ESG Dash
The adoption of GCX Dash will enable your company to embrace ESG, meet the challenges of data, extraction, and reporting.
In both the short and long term, this would prove time and cost-efficient and will pay for itself on cost and energy savings
Persofi together with GCX Dash presents an opportunity for your company to upgrade your ESG story or as a place to start or re-start.
We invite you to find out how we can help you in your sustainability journey. Please feel free to reach out to me by email: jeffrey@persofi.com or browse my blogs on https://www.persofi.com/ where we cover topics with a focus on:
ESG Accounting | Carbon Accounting | ESG Measurement | ESG Rating | CO2 Reduction | ESG Reporting