Posts

Software as the foundation for investment grade data (IGD)

ESG is here to stay. Momentum is gaining to improve data quality and consistency. Regulations such as Sustainable Finance Disclosure Regulation (SFDR) are clearly helping to drive this. The perceived distinction between financial and non-financial data is not helpful one when ESG data, which might conventionally be seen as non-financial, is used all the time to inform investment decisions.

Clearly those who are managing data for ESG strategy implementation and reporting rightly need to focus on aspects, which London Stock Exchange highlighted, such as:

  • Reporting boundaries: ensuring data aligns to the fiscal timeframes and financial structure
  • Comparability and consistency: employing best practice in terms of methodologies
  • Provision of data: qualitative and quantitative for vital context and narrative.
  • External assurance: adding credibility to ESG reporting by following the principles of an independent auditing of the process.
  • Accuracy: establishing robust systems to bolster the collection and quality of ESG data.

Historically there’s been underinvestment in the systems and processes in the real estate sector to address data accuracy and quality. This can be said in relation to the adoption of technology but also from a resources and experience perspective. The requirements and expectations of ESG reporting in real estate has evolved rapidly and perhaps faster than the pace many companies are going at to address these gaps. Key to success in this is engaging those involved in the foundations of ESG data and with the tools like SIERA and SIERA+.

Take for example Net Zero Carbon (NZC) as a relevant ESG theme. Many real estate companies have made public commitments to reaching NZC by 2050. NZC is now firmly on the radar of Asset and Investment managers who are getting their heads around a new lexicon and learning how they begin to develop asset business plans and investment strategies that mitigate these transition risks.

A necessary first step is to get a baseline of performance to understand the current energy and carbon intensity of assets and funds/portfolios and what the impact of current action plans will be on NZC pathways.

To achieve this companies must get the fundamentals right in terms of having visibility of and centralising information to answer some key questions: where are the gaps in data coverage?, which are the best and worst performers in the portfolio?, What’s the current status of asset action plans?, Where in the portfolio should action be prioritised for improvement on each of these?

Example Portfolio dashboard, SIERA+

Undoubtedly technology plays an essential role here as a tool to drive efficiency and consistency in the data collection process and to centralise that data. However, ultimately this comes down to providing an easy and simple means of engagement and collaboration between Asset & Investment management and Property Managers.

We have developed SIERA+ to better equip property managers in engaging with ESG and addressed the priority needs; provide a simple view on performance against targets, ability to manage data quality and keep on top of actions. Notifications prompt when action is required and it’s generally set up to let users focus on the most material issues.

Example Action Plan dashboard, SIERA+

We also recognise that the culture of Property Managers can vary across diverse portfolios and English is not always the first language. Since this is about improving engagement we have made SIERA+ available in 5 languages.

Get in touch to know more.

ESG Data is Growing Up

We are entering a new era of ESG data. Historic market failures regarding our negative environmental and social impacts, and the resulting climate change, nature loss and social inequality, are starting to be corrected with structural changes to the market.

In the financial sector, we are seeing both dynamic and double materiality becoming an integral part of decision making. The WEF introduced the concept of dynamic materiality in 2020, where an ESG topic which is financial immaterial today can become material tomorrow. That is coupled with double materiality, which considers both the inside-out view of ESG, that is what impact does an asset have on the environment and society, as well as the outside-in view of what impact environmental, social and governance issues have on the asset.

Climate change and carbon pricing is a good example. In terms of dynamic materiality, an increasing number of companies are adopting an evolutionary internal carbon price to drive low carbon investment in real assets and to mitigate the risks of cost increases as climate change externalities are corrected in the economy – this price will increase over time making financial materiality more likely across all sectors. There is an obvious point of connection here with double materiality, which is that real assets create emissions and will inevitably face more regulations over time – see the PRI Inevitable Policy Response Forecast Report. As our climate changes we will see an increase in severity and/or frequency of extreme weather events which can damage and disrupt real assets. All of these aspects of potential materiality have to be considered in financial appraisals and investment-grade ESG data can provide insight on trends and relative performance of assets.

Investment and Asset Managers are using ESG data from assets to make investment decisions: choosing the right assets to acquire and dispose of; deciding how to finance improvements to those assets; and investment & credit risk management processes are now incorporating ESG data. 

Those processes and decisions are becoming more transparent to the providers of capital, so the quality of ESG data has to become investment grade.

The expectations from investors, and their asset managers, of ESG data is closing the gap with the financial and commercial data captured in asset management software, but the budgets invested in ESG data management software and processes is vastly different. ESG data is now more valuable than it has ever been before and financial regulations are going to increase that value. 

The EU Action Plan for Sustainable Finance, and similar changes to UK financial regulations, means that the duties of asset managers & lenders and the decision they take about ESG risks and opportunities are no longer optional.

Without investment-grade data about ESG performance and sustainability actions then it is not possible to understand the full impact on asset value. ESG risk, in particular climate risk, is a financial risk and this data should be incorporated into every financial decision. 

That wasn’t the case last year, so this change is happening quickly. 

ESG data was being used in-house to monitor performance, as it has been for the last decade or so. It was used for annual reporting and for voluntary disclosure. There was a small minority of investors asking about ESG at the start of 2020, but throughout the pandemic this has changed quickly. Last year, there was not a fiduciary duty to be discharged based on ESG data. Nor staff incentive programmes based on ESG measurements. That has all changed as the market has grown up to take a more sophisticated view of how our economy relies on natural and social capital, not just financial and manufactured capital. The materiality of ESG has been recognised across the financial sector.

The financial markets are undergoing a structural change. Sustainable finance, and particularly climate-related finance, is now a global priority. This has led to changing investor requirements and regulatory changes for banks, institutions and fund managers, such as SFDR, MiFID ii and mandatory TCFD reporting are all combining to bring about structural change. We now have to consider dynamic and double materiality and make financial decisions accordingly.

It is slowly, but surely cascading down to real assets: real estate, infrastructure and land.

For those experts in sustainable real estate and infrastructure, it is clear that assets are likely to be mispriced and that the transparency provided by these regulatory requirements for ESG data will make that clear. Without ESG data on performance and actions, it is not possible to assess the cost of transition. For real assets, there is not a trading solution to disperse all of these liabilities by disposing of them to others. There is a need to retain, rethink, invest and dispose based on early knowledge of ESG risks. The later this happens the most likely it is that asset owners will see value erosion through reduced income, defaults, decreasing exit values and cap rate compression.

ESG transparency will also influence tenants and the users of real assets. There is a reputational risk of not taking sustainability performance seriously enough. Now that people have more choice about where they work and live, this risk could be more material to income and asset value than ever before.

At EVORA Global, with our SIERA and SIERA+ software, we are making these risks more visible and manageable. This is enabling our clients to make proactive decisions about their assets and funds, and to effectively engage with investors and other stakeholders.

It is time to approach ESG data in a new way. The historic policies, processes and procedures may no longer be fit for purpose. Most of them are only backwards-looking and there is now mandatory requirements to be forward-looking, which has its risks and uncertainties. In choosing an ESG data management platform ensure that it is future-proof, aware of this rapidly changing financial landscape.


If you would like to get in touch with the EVORA team, you can do so by filling in our form or by emailing contactus@evoraglobal.com

GRESB + SIERA = Success

Sustainability data can be complex. It can show many interesting patterns and insightful trends about energy usage, but at the same time be hard to manage.  The ability to use sustainability data to reduce energy usage by seeing the impact of actions is one of its most powerful features. Connecting those patterns and trends to actions leads to results.

GRESB provides a way of thinking about sustainability data which focuses effort on certain areas and types of energy consumption. SIERA is the sustainability software solution by EVORA for managing asset portfolio data to help achieve sustainability goals. SIERA provides a way of seeing those areas and types of energy consumption by organising consumption, meters, properties, and funds to make it easier to understand. That’s why EVORA sustainability consultants use it get the best out of the data, and easily see patterns which otherwise would be hidden.

But GRESB provides its own challenges. Submitting data to GRESB involves making sure the data is correct, accurate and above all reflects the performance of a property and ultimately a portfolio.

GRESB can be challenging to get right

For those who submit to GRESB, there’s a lot of data to prepare – a lot of ducks to get into rows if you will. One of the first hurdles is making sure that your asset data is correct, that floor areas add up correctly and that the consumption, waste or emissions make sense to GRESB. There’s wide range of categories and ownership to consider, and things like where emissions are generated and who consumes them.

In short, it can easily become somewhat of a mountain of information to organise. GRESB provide a website and a spreadsheet you can use to upload data. The website points out where things don’t add up correctly and you work through the errors until they’re all gone.

GRESB also provides the ability to use software to upload your data. This method is very similar to the website except errors are sent to the software instead of the GRESB webpage. SIERA uses this method to direct the wealth of asset data it contains about assets in the portfolios and funds managed by EVORA consultants.

This connection means SIERA can take advantage of its own intelligence to make it easier to prepare for GRESB.

SIERA makes things clearer

SIERA is a platform whose main aim is to make sustainability data more manageable and the intelligence within it easier to see. It shines at tasks like GRESB mainly because it already contains a lot of the data required for a GRESB submission. SIERA uses this data to show the patterns, monitor the impact of actions and to look for potential improvements.

SIERA has a wide range of different ways of showing the data, each taking a different slice of the data to show a pattern. Having so many different views on the data makes it much easier to understand the data which gets sent to GRESB.

Asset-level reporting becomes easy

This year GRESB changed how data is reported. Before it was fund-level, meaning the total consumption and usage of all assets in a fund was submitted. This year it became asset-level. This means the energy and performance of each individual asset is submitted. As you can imagine, this means much more detail is needed and a finer grain of accuracy than before.

Luckily for SIERA users this didn’t pose a problem. SIERA already recorded data at the meter level so this change didn’t cause a problem.

Qualitative survey answers add colour

GRESB doesn’t just focus on utility readings. It also asks a range of questions about the social initiatives, engagements and technical assessments done for each asset. This qualitative data helps to show how a building is being managed and what social programs are taking place to increase the sustainability of an asset.

SIERA captures this data using surveys. SIERA surveys capture exactly the qualitative data that GRESB asks about. Surveys can be sent out to building and property managers for each asset and contain a range of questions about the asset and its management.

SIERA automatically prepares the answers for the GRESB questions which focus on the building management. Where it can, SIERA also uses data it already has to save time for anyone submitting data to GRESB. For example, rather than ask every property manager if a building uses automatic meter readings, SIERA simply looks at the meters in the asset and checks itself.

No GRESB errors doesn’t always mean correct

Once the asset data has been checked for any updates, SIERA displays the whole GRESB submission in one page. This table makes errors or unexpected variances stand out so you can quickly correct any potential mistakes.

EVORA consultants use SIERA to prepare submissions for clients. On top of that, because they’re experts in their field, they use it to see where adjustments might be necessary.

GRESB show where data doesn’t add up using errors and outliers. This helps to make sure data like floor area coverage is correct, but it doesn’t highlight poorly organised data. EVORA consultants know to look for variances which may indicate problems like consumption data that has been incorrectly allocated to the wrong area of the building.

EVORA uses SIERA to achieve higher GRESB scores

Using these SIERA features make GRESB easier to get right, but they also make it easier to get higher scores. EVORA consultants use the fine-grain control of SIERA and the data visualisations and views to get the most out of the data, and correct issues before they get to GRESB.

Whilst other sustainability software can also prepare submissions for GRESB, SIERA ensures that the data is both in its best form, and used to get real results. Once the GRESB period is over EVORA consultants use the data to feedback to clients to help guide which actions will achieve an asset’s sustainability goals.

This combination of EVORA + SIERA explains how EVORA helped a number of our clients achieve GRESB global sector leadership and Hines Europe to achieve 100% in its Resilience score.

If you are interested in finding out more, get in touch with the team at contactus@evoraglobal.com.

EVORA delivers £373k savings in first year of M&T module

Our SIERA Monitoring & Targeting (M&T) module had its first birthday earlier this year, so we decided to take the time to reflect back on all it has achieved in its first year.

Since the module’s release in February 2018, EVORA has begun driving energy efficiency at 51 assets across eleven clients via SIERA Energy M&T programmes. In the first twelve months, these programmes saved 4.1 million kilowatt hours of energy, equating to a cost saving of £373,00 and preventing 1,862 tonnes of carbon emissions.

The backstory

As our Managing Director Chris Bennett explains:

“We had sought an Energy Monitoring and Targeting platform to meet our specific requirements, but we struggled to identify a system that provided both the functional capability and practical approach we needed as energy consultants. Having developed our own sustainability management software, SIERA, it seemed a natural progression to develop our own M&T platform. The end product has given us the optimal tool to support in delivering energy efficiency in buildings and has gained widespread approval by the industry. At the same time, we now have an integrated sustainability and energy management platform, where one set of data both helps optimise energy efficiency, whilst feeding into external reporting requirements such as GRESB”.

Following a combined product development effort between our Consultancy and Software Development teams during 2017, EVORA began its first Monitoring & Targeting programmes in February 2018. We have since produced M&T reports in 3 languages, at a portfolio which now comprises 51 buildings; totalling approximately 6.7 million square feet. 11 clients across 6 countries are now optimising their buildings with the support of smart meter data and our expert consultants.

EVORA Global M&T statistics

How does it work?

Developed as a module within our holistic environmental data management software SIERA, M&T integrates directly with providers to pull smart meter data from the source and automatically acquire it on a real-time basis. This allows our expert consultants to feedback quickly on trends and anomalies, and to work with the site team to rectify issues and enhance performance, thereby maximising energy and cost savings.

EVORA Global M&T process
EVORA Monitoring and Targeting process

Successes

We have already seen significant improvements at a number of buildings. By deploying M&T programmes for AEW, EVORA have been able to reduce electricity consumption by 144,419 kWh at one of their largest assets in just 10 months, representing 18% of total electricity consumption and equating to savings of 41TCO2e of carbon emissions and £16k on utility costs.

Success has not only been seen on the site level; via a set of targeted M&T programmes EVORA has helped drive efficiency across whole portfolios. Working with JLL on a series of UK DWS multi-let assets, M&T programme has contributed to an approximate 8% energy saving; totalling a costsaving of £58,000.

Building Manager Emma Swan said, “EVORA’s Monitoring & Targeting Programme is working really well at 60 Queen Victoria Street, and we have already identified several improvements within the current plant setup that will help us further drive down electricity consumption and increase our overall sustainability credentials within the building. The monthly call helps to focus our attention on what changes can be easily made and the SIERA platform allows us to monitor consumption in realtime.”.

Across the clients involved in the Monitoring & Targeting programme over the first year, a total of 4.1 million kWh of energy has been saved, equating to 1,862 tonnes of CO2 and approximately £373k saving of utility costs. We’re extremely proud of the service we have been able to provide and the impact we have been able to have. We will continue to strive to improve and enhance the module to further drive efficiencies.

To find out more about M&T, contact us and one of our expert consultants will be happy to help.


IoT: How can it help address urban sustainability challenges?

A common trend occurring in countries across the world is the movement of people into cities. The knock-on effect of city growth is that their energy demand and greenhouse gas emissions rise exponentially in order to meet the needs of the inhabitants.

Current estimates state that cities consume over two thirds of the world’s energy and are responsible for similar levels of global greenhouse gases[1]. As cities are expected to continue growing in the future, it is important that urban sustainability issues and challenges are addressed in order to restrict the impact of climate change.

The Internet of Things (IoT) is a network of physical devices which can connect and exchange data. Often, IoT forms the basis of new innovative approaches, which are presented as the solution to many urban sustainability challenges. According to the world economic forum[2], which analysed 640 IoT deployments, it found that 84% of these can in some way help address the UN Sustainable Development Goals, highlighting the global potential of IoT. For the purpose of this blog I have focused upon two key areas of interest to me, air quality and commercial buildings. In both of these areas the IoT has the potential to drive sustainability progress forward.


Air Quality

Air quality has received considerable attention in the media over the past year. In London, where we are based, the major source of pollution derives from transportation. It is important for environmental and health reasons that within cities we are able to monitor air quality effectively. However, a key challenge has always been the coverage.

Often air quality is measured by monitoring stations at set locations providing limited spatial representativeness, which is problematic in densely populated areas where significant variations can occur due to a wide range of emission sources. Advances in low power wide area (LPWA) networks (long range wireless communication) has enabled small and low-cost sensors to be developed, which can be attached to street furniture (think sign posts and street lights) within cities. Readings can be received in real time from these sensors providing air quality data with greater depth and scope than before. Using this information in models can support decision making processes and also help raise general awareness of the issue.

A practical example using IoT to improve air quality monitoring is the Air Map Korea Project[3], which involves sensors (with IoT capability) being placed on over 4.5 million telephone poles, 60,000 public phone booths and 4000 offices. The desired result is for the data to help government-led efforts to reduce air pollution. Another example, slightly closer to home is a mobile air quality monitoring project in Glasgow[4], where sensors are placed in vehicles to provide readings throughout the city. I am expecting more and more schemes like these two to start occurring in cities around the world.


Commercial Buildings

Cities contain a wide variety of commercial buildings, such as offices, hotels and shopping centres, which account for a considerable part of the overall energy demand. If cities are going to continue to grow as expected, it is vital that these buildings are able to reduce their energy demand and associated carbon emissions. Savings can often be achieved through improving the operational functions. Commercial buildings commonly have a set level of intelligence built in, with internal networks providing a tool for communication between equipment, for example as part of the Building Energy Management System (BEMS).

Approaches utilising the IoT are now offering greater system connectivity, providing building managers with more accurate data and better methods to regulate and control internal conditions, enabling building environments to be improved and efficiency savings achieved. An example of this connectivity would be a building where heating and cooling is adjusted automatically based on the occupancy and weather conditions or even lighting systems that adjust to our natural circadian rhythm.

At EVORA, we have been providing monitoring and targeting consultancy across a range of assets to help reduce consumption within buildings. Our SIERA software can be directly linked to a utility AMR stream providing us with consumption readings every 30 mins. Through reviewing the data monthly, we are able to optimise plant equipment timings and highlight unusual fluctuations, leading to financial and carbon savings (click here to see a case study where we delivered energy savings of 30%).

Having greater connectivity allows for services like this to exist, which improve the internal environment and assist in the way buildings are managed and operated, offering a viable solution for lowering energy demand from commercial buildings.

If you are interested in discussing this further or want to know how EVORA could help your organisation with sustainability initiatives,then please don’t hesitate to get in touch with one of the team.


[1]C40 Cities – https://www.c40.org/why_cities
[2]World Economic Forum – http://widgets.weforum.org/iot4d/
[3]Business Korea – http://www.businesskorea.co.kr/news/articleView.html?idxno=19374
[4]ScotlandIS – https://www.scotlandis.com/news/2017/september/with-iot-air-quality-in-glasgow-gets-smart/

Working Smart, Working Fast: How Agile development and UX design are at the heart of SIERA

Software is one of the greatest tools of the modern world, providing us with a variety of options for any job we have at hand. When you use a software product, you want it to help you with your task as seamlessly as possible, and to address the major struggles faced. You can then focus your efforts on the task at hand, rather than the tool which is supposed to be helping you with that task.

We are all consumers of software and appreciate good UX design (User Experience) when we see it. I am sure some of us here are quite fond of unlocking our phones using our fingerprint rather than the classic 4-digit code. It makes our tasks simpler, quicker and easier.

A good tool though, comes from putting a lot of thought and effort into making it as intuitive as possible. It is through Agile Development and careful User Experience design that we shape our software product, SIERA.

SIERA LOGO WEB LANDSCAPE

Read: 110 seconds to understand how SIERA Sustainability Software can help you


Agile Development

As part of developments within the industry, and the ways we work always growing and developing, SIERA is designed in a responsive and agile format, this is called Agile Development. Though we use an overall roadmap, the team works in such a way that we can adapt areas of our time, projects, workflow and focus, to match business and client needs. Working in two-week sprints, we open the discussion for any necessary changes to project or scope, and the opportunity to reflect on current workflow practices and focus areas, adapt them, or suggest improvements as a team where needed. A team will always be growing and developing.

[clickToTweet tweet=”@SIERAsoftware is designed in a responsive and agile format, this is called Agile Development. ” quote=”SIERA is designed in a responsive and agile format, this is called Agile Development. “]

User Experience Design

Through the entire process, User Experience design plays a part amongst every area of the team, and is done by every member of the team. A software team should always have at least one member who has UX (User Experience) design as part of their job role (that’s me), a person who has the time and skills to carefully think through UX design and how this is implemented into the system. However, it is not only down to that person, every member of the team and business should have the opportunity to contribute to how things should be built and experienced, as this brings in a pool of thoughts built upon the years of expertise each team member has built up.

Discussions should be live through the entire development of a piece of software, everyone is involved early on at the inception of a piece of development or new addition to the software, and then, though the design and specification should be set early on, anyone can share their thoughts throughout the process.

This will then form together a much more well-rounded, robust and effective tool.

EVORA Global SIERA Asset Electricity profile

A fresh pair of eyes

And so, it is often very useful to get a fresh pair of eyes, when someone else looks at the same tool as you, you will often find they view it from different perspectives. As Quality Assurance Tester on SIERA, and UX Designer, I can spend a lot of time staring at SIERA, and in many ways, get used to the way it is and how it functions, so when something could be improved, as is always the case with software, it becomes less noticeable. As to me, that’s just the way it is. That is where a fresh pair of eyes is key, though I can still view the product from a good perspective, I can’t see everything, and have often found that other members of the team will raise new ideas and thoughts on the current work flows, which is amazing. A UX designer should never be left alone.

We can’t do everything, but we CAN do everything we need to… (being realistic)

We can’t do absolutely everything in life, and we all know that, but we can do everything we need to. Well with software development it’s the same. We don’t have time to implement every idea we ever think of, because it’s simply impossible, however through being realistic and honest with our time, and careful thought and prioritisation, we can achieve everything we need to; first usually as an MVP…

I hear the term MVP a lot, so what is an MVP? An MVP is a Minimum Viable Product, this is a version of the product which meets all the minimum requirements of what needs to be delivered. This takes much skill and discernment to define, and varies greatly depending on the software purpose. For example, if something needs to be functional and readable so it can be delivered to the user, then that’s the MVP, but then if it won’t be released until it looks really sharp, then that is part of the MVP as well. Keeping an MVP in mind is a good way of ensuring there isn’t time spent creating unnecessary enhancements, which can be re-prioritised and added later.

EVORA Global SIERA EPC data

All these approaches form together to become the heart of SIERA’s robustness and effectiveness.


So, what exactly does this mean for our clients and product?

It means that SIERA can become the solution that will fill in the major gap in everyone’s workflow that is becoming a blocker, saving them time and effort, and addressing the long-term pain-points that users have been experiencing for years, then delivering these in the best way possible.

[clickToTweet tweet=”SIERA can become the solution that will fill the gap in everyone’s workflow, saving them time and effort.” quote=”SIERA can become the solution that will fill in the major gap in everyone’s workflow that is becoming a blocker, saving them time and effort”]

A good example of this is our Monitoring & Targeting system, with many companies looking for a solution to gather, store and display half hour data consumption for individual meters in an intuitive, clear and effective way, SIERA hit the market to fill in that gap. It did this through clear visual display, navigation and customisation, providing the basics of what was needed most.

Data can be compared against system overlays and user-defined overlays. The user can set operating hours for a meter, to visually differentiate when different amounts of energy should be used. The user can also set Alerts for their Meter, ensuring the user can tell when something has gone awry. All clearly displayed, as seen below.

EVORA Global SIERA Monitoring and Targeting module

As software users, users of our own product, and experienced veterans in the sustainability industry, we understand the importance of a good software and what it is this software needs to do. So, watch this space, SIERA is going to develop and evolve even more than it already has!


Have any questions about the specifics or want to find out more?
Get in touch!

Portfolio Items