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How Real Estate Firms Can Streamline ESG Reporting and Improve Their Bottom Lines

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As global attention to environmental, social and governance issues continues to grow, property owners and operators face pressure to adopt comprehensive and proactive solutions for reporting ESG performance. increase.

Historically, US real estate firms have relied on voluntary ESG guidelines led by the private sector. However, ESG has recently become a higher priority for policymakers, with pending climate disclosure rules (SEC Proposal). If these rules are passed, companies will be required to maintain higher standards than ever before to identify, assess and manage climate-related risks and disclose their strategies for addressing these risks. increase.

The proposed regulation also increases pressure on the disclosure of greenhouse gas emissions, requiring companies to disclose not only direct emissions (Scope 1) and emissions from purchased energy (Scope 2), but in some cases across their supply chains. Emissions must also be reported (Scope 3).

Proposed federal regulations are contested in court, but U.S. real estate organizations need to adopt a more formal approach to disclosing ESG performance and climate risk to remain competitive in the industry is clear. Between the proliferation of EU regulations and the growing pressure to embrace more ESG initiatives within the US, monitoring and measurement will become business as usual.

But collecting data on everything from carbon emissions to energy and water consumption and assessing physical climate risks can be complex and time-consuming if done manually. Keeping up with ever-evolving regulations and reporting deadlines is equally difficult. But there are ways to make these seemingly difficult tasks easier.

A hybrid approach can help overcome common ESG reporting obstacles

For a real estate company, keeping up with the evolving ESG regulatory landscape can seem impossible, especially if the sustainability team is small or non-existent. However, you can put these goals within reach by deploying the right resources.

One of the key initiatives is automation. By utilizing AI-enhanced technology that collects and centralizes data from disparate sources, businesses can avoid human error and time-consuming manual entry. Also, with automated data and machine learning, the team can more easily manage and measure carbon emissions and physical climate risks to assess performance and comply with current ESG regulations and requirements.

Additionally, by working with ESG professionals who have a deep understanding of the broader real estate ESG landscape, we are able to streamline reporting processes and extract maximum value from data, while reducing the burden on full-time employees.

By partnering with technology-enabled advisors who can leverage the data already collected, companies can better understand and be comfortable with the evolving framework, ultimately truly reflecting the investments and successes involved. You can get an ESG rating.

Our ESG experts can help you develop and demonstrate data-driven roadmaps and action plans that not only optimize internal processes but also move your company forward toward meeting key ESG goals. Additionally, you can improve data quality by leveraging automation and third-party expertise.

Pursuit of investment-grade data

There are several components that qualify data as follows: investment-grade, and each of these are important for validating ESG performance and establishing trust with investors, legislators, tenants, and other stakeholders. To meet the growing demand, real estate companies must strive to:

  1. Accuracy – Accurate and verifiable data is necessary to comply with proposed SEC rulings and other laws, while mitigating the financial and legal risks associated with non-compliance. By automating all your data collection in one place, you save time and eliminate the errors associated with manual data entry.
  2. Timeliness – We are moving away from the annual reporting season. Centralized, continuously updated data helps generate reports for investor demand whenever insights need to be shared.
  3. Granularity – ESG is no longer just about energy, carbon, water, and waste. Real estate companies are also expected to document and disclose climate risk as well as the initiative socializing and governance policies. Needed by investors and other stakeholders, clear, timely, and accurate data compare and understand a company’s overall ESG performance.

Optimized ESG reporting leads to profitable results

Efficient and detailed ESG reporting can be a competitive differentiator for a company, increase transparency and improve stakeholder relationships. Additionally, the ability to view and track performance at the asset level allows businesses to identify the worst-performing buildings and direct capital expenditures to improve energy efficiency, reduce water consumption, or improve waste diversion rates.

Having all this data at hand helps companies stay ahead of investor demand and makes it accessible to companies. Capital-optimizing ESG reporting can also reduce operating costs and increase asset value. Above all, this kind of technology-powered ESG reporting enables companies to contribute to building a more sustainable future.

About the author: Scott Lemoyne is Measurabl’s Lead ESG Advisor and manages the Advisory Services Division for North America. He has over 9 years of experience in sustainability and his ESG consulting for public and private property owners and operators. Scott specializes in developing and deploying his ESG programs across their lifecycle, from long-term strategy development and stakeholder engagement to decarbonization building and reporting.

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