ESG Strategy Archives | EVORA Global

Sonny Masero joins Board as Chief Strategy Officer

June 29, 2020/in News & Views /by EVORA

EVORA Global is delighted to announce that Sonny Masero has joined the company’s Board as Chief Strategy Officer (CSO).

Sonny joins EVORA at an exciting and challenging time in the company’s history. In the midst of the COVID-19 pandemic the EVORA Board is looking ahead; knowing that the sustainability of real assets remains a high ESG priority for investors. Climate change, the restoration of wildlife and social equality are all a global priority for this decade.

Sonny brings to EVORA Global 25 years of expertise in the field of energy, climate change and sustainability in real estate and corporate governance. He has worked with CleanTech and PropTech businesses, including CA Technologies and Demand Logic, winning nineteen industry awards for innovation, leadership and best practice. Sonny is able to draw upon a broad depth of experience across a wide range of companies, from Fortune 500 and FTSE corporations, SMEs, charities and start-ups –two of these securing recognition as Best UK Workplaces.

As CSO, Sonny will develop and drive forward EVORA’s market strategy, using technology to support our consultancy team to deliver outstanding and leading solutions to the industry – to be the best. Building on EVORA’s market leading SIERA software platform, the strategy will respond to interest from investors in the active management and disclosure of ESG risks and climate resilience. The next decade is critical to tackling climate change and biodiversity restoration, and EVORA is committed to helping clients achieve the largest positive impact they can.

Chris Bennett, CEO, comments “EVORA has managed to plot a successful route through 2020 in a very difficult and unusual time. I am extremely pleased that someone of Sonny’s reputation has chosen to join our Board to help drive the business forward to achieve even greater success.”

Sonny Masero said “EVORA has a strong reputation in the ESG market, working closely with the leading property investors and investment managers, and doing so with integrity. I am excited to be joining Chris, Paul and Ed’s company to execute on a growth strategy with a clear sustainability purpose at such an important time.”

No longer optional: Shifting to a more sustainable investment model

June 22, 2020/in News & Views /by Oliver Pye

Recent months have seen a flurry of articles demonstrating that many sustainable (ESG) investments have outperformed their unsustainable non-ESG rivals during the intense market-downturn caused by COVID-19.

BlackRock – one of the world’s largest investment managers – and MCSI – a leading investment research firm – are amongst those who have published robust analyses illustrating a positive link between sustainability and market performance. Key snippets from BlackRock’s recent ‘Sustainable Investing: Resilience amid Uncertainty’ report, include:

“Although sustainable ETFs [exchange traded funds] comprise just 1% of the total ETF industry, they have had an outsized influence on overall industry inflows. Meanwhile, traditional money market funds experienced outflows of 10% for the month of March, while sustainable options benefited from inflows of 12%”

“We believe that we are still in the early stages of a persistent and long-lasting shift toward sustainability – the full effects of which are not yet included in market prices, given the long transition. This is a transformation that we expect to see through the current pandemic, recovery, and long after” [1]

Of course, not all investment classes have seen the same correlation, but the general message is clear: sustainable investments make for more resilient investments.

Add to this the emphasis being placed by leading businesses and investors on a COVID-19 recovery that ‘builds back better’ [2] – and the case for a sustainable investment strategy has never been stronger.

Mix-in the society’s other persistent, growing, existential threats – inequality, labour exploitation, resource depletion, climate change and ecosystem collapse – and shifting to a more sustainable investment model is, surely, no longer optional.

So-what for commercial real estate and infrastructure investors?

Clearly, all businesses will be evaluating how they have fared during COVID-19 and what strategic changes are required to survive and/or thrive in the new world. Sustainability must be a significant part of this conversation.

We are sustainability (ESG) strategy advisors working with many leading real estate and infrastructure investors to embed sustainability into their business. For us, it’s the G in ESG that’s key: Governance. Governance processes must enable comprehensive identification, assessment and monitoring of present and emerging material risks and opportunities. Get the governance right, and the E and S (environment and social) naturally follow [3].

Of course, we tailor our solution to the client. For those starting out on their sustainability journey or looking for a more significant overhaul of their current approach, we work with them to build a comprehensive sustainability strategy, from scratch. Whereas, for clients already equipped with a strong framework, we enhance and update; not reinvent.

For all clients, we make sure that sustainability ambitions are aligned to [and where appropriate inform] strategic business objectives. We also seek to integrate sustainability within existing investment processes – in order that it becomes business as usual, as soon as possible.

Get in touch with the EVORA Sustainability (ESG) Strategy team today.

[1] Sustainable Investing: Resilience amid Uncertainty, BlackRock 2020

[2] Through the Prince of Wales’s Corporate Leaders Group (CLG), over 200 leading businesses and investors have lobbied the UK government for a COVID-19 recovery plan that yields a more inclusive, stronger and resilient UK economy.

[3] …broadly!

Getting to (Net) Zero

December 4, 2019/in Sustainability /by Ryan Sit

In June of 2019, the UK became the first major economy in the world to pass laws requiring net zero greenhouse gas emissions by 2050.

‘Zero carbon’ is an ambitious challenge and one that we at EVORA Global is well-poised at untangling.

So what do we mean by ‘zero carbon’?

Though there are two important contributors of carbon emissions in a building – embodied carbon and operational carbon – the focus of this article is on operational carbon. An operational zero carbon building is one that generates or purchases enough renewable energy to offset emissions from all energy consumption in the building over a year.

Does your project have a zero carbon goal in mind but is stymied with uncertainty of where to begin? Consider the following strategies:

Go all-electric

Going all-electric is a key to unlock zero carbon buildings – it enables the installation or purchase of renewable energy to offset the building’s total energy use.But what are the common barriers inhibiting this paradigm shift from conventional gas-fired heating to electric heat pumps? The legacy of gas-fired heating has, in part, been enabled due to historically low natural gas prices compared to electricity. Further, many facility management teams have inherited training to maintain conventional gas heating systems. As a result, it has been a challenging transition for facility managers to learn to maintain newer electric heat pump systems.

Yet times are changing. In contrast to trends seen in previous decades, the World Bank forecasts that natural gas prices from 2020 to 2030 will steadily increase [1]. Moreover, the UK government predicts wholesale electricity prices flattening in the next decade, likely due to the concurrent greening of the electricity grid and the falling levelised cost of renewable energy [2]. Hence, an all-electric building does not solely unlock the potential for achieving zero carbon – it also minimises financial risks by reducing reliance on ever fluctuating fossil fuel commodities.

Furthermore, legislative drivers like the UK gas heating ban for new homes by 2025 are further facilitating maturity of the electric heat pump market and improving contractor familiarity with electric heating technologies.

Deep retrofits and passive design strategies

Zero carbon buildings will require retrofits deeper than “simple lightbulb savings” and operational quick wins.

The deep retrofits required will ultimately need to include improvements to the building fabric, defined as everything that separates the interior from the exterior of the building. To meet operational zero carbon goals, it will be necessary to consider high performance window glazing and installation of external or internal insulation to reduce heat loss through the building fabric. A tighter building fabric will not only help reduce heat loss in the building – the overall size (capacity) of the required HVAC systems will also be smaller, garnering additional energy savings and carbon reductions. For tenants, a tighter building fabric also results in a more thermally comfortable space to work in.

As mentioned previously, HVAC systems with gas-fired heating should be retrofitted with efficient electric heat pump systems. One replacement option is a variable refrigerant flow (VRF) system that can provide heating and cooling. A VRF system is highly efficient and, with proper controls installed, can even provide simultaneous heating and cooling to different spaces. For example, if a perimeter space (say, an office receiving solar gain from the windows) requires cooling and an interior space (say, desk cubicles where the sun does not reach) requires heating, it is possible for a VRF system to capture and redirect the heat from the perimeter space to the interior space.

Additionally, lighting retrofits should extend beyond installing energy efficient LED lighting. It is recommended that spaces maximise natural daylighting opportunities by installing controls to dim or shut off artificial lighting where there is enough natural light in the space. Studies have shown that providing indoor access to daylight can improve tenant satisfaction and productivity, while also conferring health and wellbeing benefits by aligning occupant circadian rhythms with the natural day and night schedule.

Clean, renewable energy

With a highly energy efficient building in hand, the remaining carbon emissions associated with operations should be offset by carbon-free renewable energy.

Although achieving zero carbon can be achieved using either on-site or off-site renewables, it is encouraged to prioritise on-site renewable generation.

On-site generation brings many benefits. In addition to alleviating pressure on the national grid, on-site generation also benefits tenants by providing resilience against power cuts to ensure business operations continue to run as usual.

If on-site renewable generation is not possible at the building, or is insufficient to offset the building’s operational carbon emissions, then purchasing off-site renewable energy should be considered. Power Purchase Agreements (PPAs) allow for the purchase of electricity directly from a renewable energy generator. For landlords, this provides a path to zero carbon without incurring large capital expenditures.

Zero carbon is set to be the gold standard for sustainable real estate. The EVORA Global team of experts are ready to discuss strategies to get your project on the path to zero!

[1] http://pubdocs.worldbank.org/en/598821555973008624/CMO-April-2019-Forecasts.pdf

[2] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/802478/Annex-m-price-growth-assumption_16-May-2019.ods

Climate Resilience: Why we should care

November 29, 2019/in Sustainability /by Ed Lock

Climate Resilience has been the buzzword in the market for some time, but what does it mean and why should you care?

Climate Resilience is ‘the capacity of companies and funds to survive and thrive in the face of social and environmental shocks and stressors’ [GRESB]. By shocks, we mean short term acute events like fires and floods. Stressors are the longer-term chronic vulnerabilities such as increasing heat days and precipitation levels.

Why should we care?

The need to disclose climate resilience is not going to go away. Momentum is building globally for companies to identify, manage and disclose their climate risks and opportunities.

Investor demand

You only need to open a paper, watch the news or even look on the streets to see that climate action is gaining momentum. The public and society as a whole are becoming more literate and conscientious about the issue and this, in turn, is influencing the investment community.

As the effects of climate change on economic activity become more significant, there is increasing demand from investors, trustees and other fiduciaries for consistent, comparable, actionable information in company reports. Investors increasingly expect Boards and Executives to actively assess and respond to climate risks.

In May 2017, a shareholder resolution at Exxon Mobil called on management to produce a report detailing the implications of a 2 degree scenario and received 62% support^[1]. This, along with similar results at other oil and gas companies’ AGMs, signals that the majority of investors in the world’s biggest fossil fuel producers see value in having this information. This is likely to extend to the real estate sector as the climate change agenda continues to gather momentum.

Physical risk

35% of REIT properties globally are geographically exposed to climate hazards, including inland flooding (17%), typhoons or hurricanes (12%), and coastal flooding and sea-level rise (6%)^[2]. Investment managers and investors for directly held assets currently use insurance as their primary means of protection against extreme weather and climate events. However, insurance will cover damages from catastrophic events; it will not cover higher capital expenditure and operational costs and loss in value from a reduction in the asset’s liquidity.

Litigation risk

A pattern is emerging of activist shareholders filing resolutions against corporations, particularly major energy companies, demanding increased transparency surround climate change risks and company policy [Norton Rose]. For example, in Australia in 2018, 23 year old Mark McVeigh filed legal action against Retail Employees Superannuation Pty Ltd (REST), seeking information regarding what the trustees know about the impact climate change will have on its investments and what they are doing in response to this knowledge.

Fiduciary responsibility

A fiduciary duty is a requirement that informs investment and management practice in a similar manner to aspects such as costs and investment returns. A failure to take account of ESG issues could be seen as a breach of their fiduciary duties. Fiduciaries, therefore, need to show they have identified and assessed the risks to companies and to their portfolios.

Increasing disclosure on climate resilience

The driving force behind more effective disclosure in climate resilience is the TCFD – the Taskforce on Climate-related Financial Disclosure. TCFD is a global voluntary disclosure framework launched in mid-June 2017 to allow organizations to identify the climate risks and opportunities they expect to face, and ultimately to disclose the financial impact of these in their annual reports. As of May 2019, 648 organizations have shown formal support for the TCFD, including 118 asset management organizations.

TCFD is a global voluntary disclosure framework launched in mid-June 2017 to allow organizations to identify the climate risks and opportunities they expect to face, and ultimately to disclose the financial impact of these in their annual reports

Stockland an Australian Securities Exchange (ASX) 50 organization and Australia’s largest diversified property group, has been an early adopter of disclosure in alignment with the TCFD framework. Stockland has been identifying risks and opportunities relating to the impact of climate change for over a decade. The business response to these is guided by a Climate Change Adaptation Plan which is regularly reviewed, and a detailed Climate Adaptation Strategy, as well as business unit sustainability strategies. Whilst Stockland did not disclose the actual or potential financial impact of their identified climate risk and opportunities (which is of specific interest to investors), in February 2018, the organization lodged “Stockland’s Climate-related Financial Disclosures” on the ASX as part of their half-year reporting suite. This made Stockland the first Australian property company to disclose its climate risks and opportunities to the ASX in accordance with the Task Force recommendations.

In 2018 GRESB launched the Resilience Module within which the Climate Resilience Indicators are aligned to the four pillars of the TCFD framework, namely Governance, Risk Management, Strategy and Performance Metrics and Targets. The Resilience Module was unscored in 2019 but is expected to be integrated into the wider GRESB framework in 2020.

What next?

It is now widely considered industry best practice that organizations should consider climate change in the context of their strategic and operational risk management. As a first step, organizations should conduct a gap analysis against the TCFD reporting framework with a view to identifying and addressing the gaps across the Governance, Risk Management, Strategy and Performance Metrics and Targets pillars.

If you’d like to learn more, please do contact one of our experts.

This article was originally published on GRESB Insights

[1] 2 degrees of separation: Transition risk for oil & gas in a low carbon world – Carbon Tracker; UN PRI [page 11]

[2] http://427mt.com/wp-content/uploads/2018/10/ClimateRiskRealEstateBottomLine_427GeoPhy_Oct2018-4.pdf

EVORA Global announced as headline partner on Estates Gazette new Sustainability Programme

September 23, 2019/in News & Views /by Chris Bennett

EVORA is pleased to be working in collaboration with the Estates Gazette and other industry leaders to share knowledge and key learnings about sustainability with the real estate industry.

Find out more here.

Read the article “How real estate is mobilised to face a real and present danger” by Chris Bennett here.
Listen to the podcast “Hope or fear? How the built environment needs to approach the climate change” featuring Ed Gabbitas here.
Listen to the podcast “Property and the climate crisis: how should real estate respond?” featuring Matthew Brundle here.

There has never been a better time to be talking about climate change and the broader sustainability agenda and Estates Gazette are ideally placed to inform the industry as a whole. Working with the Better Buildings Partnership, Hammerson and Drees & Sommer, we aim to share our wide knowledge of the industry and sustainability with the EG audience.

Real estate is one of the biggest contributors to global warming, representing around 40% of global carbon emissions, which means it is also an industry that has the biggest opportunity to make a difference.

“We are fortunate to work with many clients who already have sustainability high up on their agenda, but we recognise the wider real estate industry still needs guidance and support. With the sustainability agenda ever evolving and climate change and net zero at the forefront of everyone’s mind, we believe it’s the ideal time to share our knowledge and expertise with a wider audience. By partnering with the Estates Gazette provides the perfect platform to share our learnings and support the industry to rise to the challenge and tackle this issue head on.”
Chris Bennett, MD, EVORA Global

The new programme coincides with the launch of the Climate Change Commitment by the Better Buildings Partnership (BBP), which has been signed by 23 of the UK’s leading commercial property owners.

The Commitment highlights the need for buildings to be net zero carbon by 2050 and commits signatories to publicly publish their own pathways to achieving this by the end of 2020. Read the full BBP press release here.

If you would like more information about how EVORA Global can support your business in achieving its climate goals, please do contact us.

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

September 5, 2019/in Data /by Rebecca Blewett

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.

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 cost–saving 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 real–time.”.

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.

Biodiversity: enhancing the built environment

July 30, 2019/in Sustainability /by Joanna Tomlinson

EVORA support many of our real estate clients to develop sustainability strategies and management systems. The overriding objective of approaches developed is to establish plans that help our clients understand their impacts, manage risks and, perhaps most importantly, drive performance improvement. Often, and unsurprisingly we focus on energy, carbon, water and waste.

However, there are wider opportunities. Biodiversity can often be pushed down the agenda. Real estate owners can develop programmes designed to positively contribute to biodiversity. As you will see in the rest of my blog, I consider this to be very important.

So what is Biodiversity?

Biodiversity, in simple terms, means the variety of life, in all its forms and at all levels. This ranges from genes to species to ecosystems – everything that collectively forms the biological diversity on Earth.

In short, biodiversity is a good thing. It is essential in maintaining a healthy environment and therefore, has an impact on our quality of life.

The decline of biodiversity has serious consequences and its protection and enhancement is essential if we are to achieve a sustainable future. We depend on biodiversity for food, health, natural resources and a range of ecosystem services such as air and water purification, soil fertility and plant pollination. Maintaining biodiversity is also crucial to the development and discovery of new medicines.

The variety of life, in all its forms and at all levels. This ranges from genes to species to ecosystems – everything that collectively forms the biological diversity on Earth.

Increasing urbanisation is contributing to the decline of biodiversity due to the loss and division of natural habitats. Providing opportunities for biodiversity in our built environment is one way that it can be protected and enhanced.

Development schemes can utilise a number of approaches including Biodiversity Net Gain (BNG) – a quantitative, stepwise methodology that aims to enhance biodiversity after development. However, we are increasingly being asked for advice on how Biodiversity can be implemented into strategies, by clients who manage standing investment funds.

Several BNG principles are valuable for application to existing real estate assets, notably: to achieve the best outcomes for biodiversity, to optimise sustainability and to be transparent.

Biodiversity in action

Implementation of approaches to support these aims will result in greener, more biodiverse assets that not only offer homes for wildlife but can also provide wider benefits for people, such as improved air quality and health and wellbeing. It also gives asset managers positive news stories to tell and helps to create great places for people to live and work.

So, in simple terms, what can be done?

Real Estate Organisations can raise the profile of biodiversity within the workplace by:

Assessing the material risks and opportunities associated with biodiversity across portfolios;
Ensuring staff have understood these risks and opportunities;
Raise awareness amongst suppliers;
Implementing practical approaches – suitable for assets in question. If you are struggling to contextualise, think;
– Green walls
– Beehives
– Indoor and outdoor planting regimes
– Although many more opportunities exist
Report publicly on organisational performance with regards to biodiversity.

Organisations, wishing to progress further can:

Develop site-specific Biodiversity Strategies or Action Plans for managed assets, with the aim of achieving enhancements for selected species and/or habitats identified in the Local, Regional or National Biodiversity Action Plan;
Incorporate specific biodiversity objectives within asset management plans;
Collect biodiversity data e.g. number of plant types considered pollinators;
Where handing over the asset to new owners, work to “pass on” commitment to biodiversity at the asset, potentially through a handover manual;
Report to local authorities and, where necessary, other bodies, based on the data collected.

Finally, we positively encourage the reporting of progress, through new or existing routes – highlighting positive steps such as:

Measures taken to collect biodiversity information;
Key Performance Indicators, such as % of assets with Biodiversity Management Plan, % of direct employees with biodiversity awareness training;
Records of sightings of endangered/rare/protected species;
Reporting on habitats under threat;
An account of how and where operations have led to the achievement of targets in Biodiversity Action Plans;
Case studies to highlight what has been learnt from biodiversity mitigation and enhancement.

In short, Sustainability is not just about energy, water, waste – Biodiversity often presents an opportunity to progress significant improvements.

For more information, please don’t hesitate to get in touch.

EVORA Insights: GRESB and Data Quality

July 29, 2019/in News & Views /by Chris Bennett

Interview with Ragnar Martens, Director IT and Analytics

With GRESB submissions now over for another year, many of us in the industry can breathe a (small) sigh of relief.

EVORA Associate Director, Nick Hogg, took some time to talk with Ragnar Martens, Director IT and Analytics at GRESB about GRESB and data quality.

With ESG influencing ever more investment decisions, it’s more important than ever that stakeholders can continue to rely on the ESG benchmarks they engage with. Listen to Ragnar’s insights on why he thinks it’s incumbent upon participants and data partners to work together to define the standards for reporting and how this could be achieved.

You can watch the full video here:

EVORA is a recognised leader in the provision of ESG strategy and professional sustainability services to the real estate investment industry across Europe.

Contact us today to discuss your sustainability needs.

EVORA Supports Moorfield to Produce its Latest CSR Report

July 10, 2019/in News & Views /by EVORA

EVORA has supported Moorfield on development and delivery of its sustainability programme for a number of years now. This is the third year we have assisted in the production of their Corporate Social Responsibility report.

Moorfield has done well over the past 12 months achieving like-for-like energy reductions of 13%, carbon reductions of 38% and increases in recycling rates to 61%. These are achievements to be celebrated and the annual CSR report is a great tool for communicating progress.

Moorfield also recognises that the response to ESG drivers must be flexible and evolve to address emerging challenges, new technologies and changing stakeholder interests. This is demonstrated by the report which covers a diverse range of aspects including green building certification; labour management; gender equality; health, wellbeing and sustainable procurement all the way through to how the company is tackling single-use plastics. The report allows all stakeholders to better understand where risks and opportunities lie and how the company is becoming more resilient to ESG risks year-on-year.

Paul Sutcliffe, Director at EVORA, states “The Moorfield Group has made significant progress with their sustainability strategy and the outcomes stated in the latest CSR report deserve recognition. It has been a true team effort, involving the Moorfield team together with its partner property managers and Project teams. EVORA is delighted to be continually involved.”

You can read the report here.

EVORA Insights: The future of GRESB and the real estate industry

July 2, 2019/in News & Views /by Chris Bennett

Interview with Roxana Isaiu, Director Real Estate, GRESB