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CSR to ESG: an evolution

We’re used to hearing about Corporate Social Responsibility (CSR), it’s been around for years, but when did being responsible turn into something much more for the built environment?

Many years ago now, I began my career at Business in the Community, and so my journey (eventually) into sustainability. Even then, as one of the Princes Trust charities, the message was loud and clear – the biggest and best companies were all talking about CSR. 

“… the idea that a company should be interested in and willing to help society and the environment as well as be concerned about the products and profits it makes.”

Cambridge Dictionary

But at that point, when we talked about ‘the environment’, we were talking about recycling and waste, not really about the physical building. Being environmentally responsible still seemed a fairly new concept when compared to diversity and inclusion or, local communities or ethics.

 ‘Green wash’

After a segway into other countries and sectors, about eight years ago, I found myself working for a large construction company and landed smack in the age of Health and Safety. CSR was evolving into charitable events and effective communications with local communities. People before profit.

I’m not sure I ever heard about sustainability. The key word then, I suppose, was ‘green’. In doubt? Want to charge more money? What to sound innovative? Say it’s green.

“Also known as “green sheen,” greenwashing is an attempt to capitalize on the growing demand for products that are environmentally sound.” 

Investopedia

But no one was really willing to pay for it yet. Green projects or proposals had to be taken to the Board, and you had to justify the business case and show the return on investment. Only the leading companies had a team who worked on it, and even then, it was probably only one person.

At the same time there were companies dressing up services or initiatives that were environmentally friendly and ‘green’ without any real substance to whether they actually were or not.

The business case for sustainability

It wasn’t until a few years later, when I joined UKGBC that the momentum really picked up. The early adopters and the pioneers of the green building agenda were no longer content to just say they were doing something, they wanted to really show they were walking the talk. They were really doing what they said they were doing, and they wanted to prove it to you.

Increasingly, more companies were realising that there was in fact a business case for green, and it wasn’t just about making more money.

“A built environment that enables people and planet to thrive…” 

UKGBC

As soon as the penny started dropping on the long-term benefits of building green and of retrofitting existing buildings (giving them a new lease of life!), the conversation really began. Suddenly, it wasn’t just about green, it was about sustainability.

I believe that a huge part of getting the sustainability conversation more mainstream in the built environment sector, was health and wellbeing. 

Here was the real business case for those lagging behind – happier, healthier staff who stayed with the company longer, had less time off, were more productive and therefore made the business more profitable. There’s the hook.

An ESG (re)evolution

Since joining EVORA two years ago, I’ve seen the biggest shift in opinion. Not just in the industry, but the whole conversation of sustainability, responsibility to the environment and climate change. 

 ESG stands for Environmental Social and Governance, and refers to the three key factors when measuring the sustainability and ethical impact of an investment in a business or company.” 

Market Business News

As consumers and customers wake up to the state of our planet and the environment, the pressure on companies to act in a responsible way has really ramped up. But what does this mean for the built environment?

People are beginning to insist that the built environment in which they live, work, shop and spend much of their time, puts their health and wellbeing – as well as the future of the planet – at the heart of everything. And it’s not just about the places; increasingly, people are making their decisions on who to do business with, based on a company’s green and ethical practices. 

A recent study found that nearly two-thirds (64%) of millennials said ESG issues are important in their investing decisions with Gen Xers not far behind at 54% and Baby Boomers at 42%. In addition, majorities across all generations say ESG is a key factor in which companies they choose to do business with.

With this in mind, ESG is going to play a critical role in how the built environment is managed going forwards. From inception, through design, build, occupation and disposal. ESG needs to be fully embedded into an organisation’s decision-making. Those that fail to integrate ESG into their practices face the risk of finding themselves obsolete in the future. ESG is here to stay and will be at the forefront of tackling climate change and ensuring a sustainable future.

Social Value Part 2: Five Key Challenges for Social Value in Real Estate

In 2015, the United Nations set as part of their Sustainable Development Goals (SDG) 11—[to] “Make cities inclusive, safe, resilient, and sustainable”[1].

When talking about resilient cities, most of us probably think of our physical environment, rising sea levels and thermal comfort. However, the built environment can be a great enabler of community growth and strengthening social resources.

UN Sustainable Development Goals logo  United Nations Sustainable Development Goals Goal 11

Source: United Nations Sustainable Development Goals, 2019
[SDG guidelines for use]


Social Value strategies are as important for the built environment as they are for businesses in achieving SDG 11. In this article, we discuss the five key challenges of implementing Social Value in real estate.

  1. Determining a strategy focus – A valid ‘one size fits all’ approach is non-existent in Social Value. Although there is a consensus on the wide range of factors contributing to Social Value, what may be in or out of scope at organisation or asset level should be subject to an intelligent and tailored vetting process. Focus can be determined by aligning the values of your organisation and the socio-economic needs of the area for the strategy in question.
  2. Temporality– The design phase of our built environment projects has so much scope for influencing Social Value outcomes, that this might cause clients focusing on Social Value in constructed assets to feel restricted. Whilst physical factors can be used to influence the way building users work, play and feel, there are many aspects of building management which can influence the same Social Value outcomes. Start by scoping in which outcomes you can and can’t influence, this will also help to focus on what means the most to your building’s users.
  3. Measuring outcomes – Measurement is the most commonly questioned aspect of Social Value. The response can vary largely depending on what your Social Value strategy prioritises. Whilst qualitative approaches to recording Social Value are useful in capturing full social impact, it is important to use Social Return on Investment (SROI) [ED1] to calculate numerical evidence to validate outcomes against[2]. There are a number of SROI calculation tools available to facilitate this. Research carefully which one is right for your organisation.
  4. Social Value Across Borders – Interest in Social Value is quickly becoming a concern of organisations and investors operating both inside and outside of the U.K. It’s encouraging to see businesses taking an interest in creating socio-economic benefit to society. Their interest is a testament that pursuing Social Value brings wider benefits on an organisational level. SROI requires each action to be allocated a value[3]. In the U.K, we benefit from a wealth of existing research and valuation banks. These values have been thoroughly researched, tried and tested based on regional and national socio-economic research. The next challenge is to look closer at making SROI calculation accessible through similar research outside of the U.K.
  5. Balancing commerciality with social impact – The built environment is a largely for-profit industry[4]; therefore the commercial aspect of Social Value will always be important. The key thing for clients to remember when communicating their Social Value to investors will be that the figure next to the £ sign represents value to society. Value to the investor is predominantly delivered through improvements to the assets commercial profile. The rapid development of resources to support Social Value in industries and nations further afield is active proof of its benefits.

EVORA is now supporting our clients to develop and deliver Social Value programmes.  You can read more about this topic in our blog in the article ‘What is Social Value?‘ Alternatively, please don’t hesitate to get in touch if you would like to discuss Social Value in more detail.


[1] United Nations. 2015. Sustainable development goals – United Nations. [online] United Nations Sustainable Development
[2] Watson, K. & Whitley. T, 2016. Applying Social Return on Investment (SROI) to the built environment, Building Research & Information, 45:8
[3] NEF. 2017
[4] Mulgan, G. 2010. Measuring social value. Stanford Social Innovation Review, 8(3), pp.38–43

*The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States.* Visit the website.

Indoor Air Quality: Every Breath We Take

At EVORA, health and wellbeing consulting is a key component of our Environmental, Social and Governance (ESG) Strategy and Risk Management service line.

We are increasingly advising our clients on indoor air quality and the emerging third-party standard in this area: RESET Air certification.

First – Why should we care about indoor air quality?

The short answer is because indoor air quality has a direct impact on health and wellbeing.

For example, PM-2.5 is one pollutant of concern in indoor environments. PM-2.5 is particulate matter or solid particles that are smaller than 2.5 microns in diameter – far smaller than the width of a human hair. These particles are so small that our bodies have no natural defences against them. As a result, PM-2.5 can penetrate deep within our lungs – even enter our bloodstream! – and can cause emphysema or lung cancer.

Even seemingly benign compounds from a human health perspective, like carbon dioxide (CO2), can negatively impact our mental performance. CO2 is a gas produced when we respirate and is in every breath we exhale. Yet, recent research shows that when CO2 accumulates in a space, such as when there is inadequate ventilation in an airtight indoor environment, it can significantly impact our cognitive functioning and make it difficult to concentrate.

High indoor air quality thus provides many benefits to worker health and wellbeing; it reduces sickness, decreases absenteeism, and helps raise productivity.

As employees are typically quoted as one of the most expensive costs of running a business, it follows that there is a strong return-on-investment in preserving high indoor air quality.

Second – How can EVORA help?

One way we assist our clients in this space at the asset-level is supporting the application of third-party health and wellbeing accreditation/certification schemes. Certification schemes offer a robust framework for discourse surrounding health and wellbeing in the built environment.

RESET Air (where RESET is short for Regenerative Ecological Social & Economic Targets) is one such certification scheme borne out of Shanghai, China in 2009. RESET Air certification has a focus on protecting human health by specifically targeting indoor air quality.

RESET Air is a sensor-based and performance-driven indoor air quality certification. RESET Air provides a standard for continuous monitoring of pollutants of concern, which must be below acceptable limits during hours of occupancy for a period of three months prior to certification. This level of performance must then be maintained forever more; projects are recertified annually to ensure indoor air quality continues to be within acceptable thresholds. Indoor air quality performance data must also be made publicly available to occupants of the building, continuously and in real time.

The pollutants of concerns include PM-2.5, volatile organic compounds (VOCs), CO2 and carbon monoxide (CO).

There are two different RESET Air project types:

  • RESET Air for Commercial Interiors: The intent is to monitor the quality of air for occupants at the breathing level.
  • RESET Air for Core & Shell: The intent is to monitor the quality of air being delivered by the building’s HVAC system post-filtration.

For certification with either project type, the emphasis is on obtaining three months of data by deploying accredited monitors and providing the data in an acceptable format.

RESET Air is seeing considerable attention internationally and relatively rapid adoption, particularly in certain geographies. Additionally, RESET Air has recently been coordinating and harmonizing with other health and wellbeing certification programs, including WELL and Fitwel. This harmonization helps streamline project documentation for those projects looking to achieve multiple health and wellbeing certifications.

Exploring the nuances of certification schemes, including RESET Air, can get complicated and quickly!

EVORA has multiple RESET Air Accredited Professionals ready to help you understand the standard and – if appropriate – apply it to your project. Get in touch to find out how we can help your project achieve improved – and easier to communicate – health and wellbeing outcomes!

Fitwel: Five ways Fitwel could benefit you and your buildings

Fitwel was introduced in pilot form in 2014 and officially launched in November 2017. Current uptake statistics are impressive:

  • 95 buildings certified;
  • 620 projects registered;
  • 942 users; and,
  • 661 Fitwel ambassadors in over 22 countries.[1]

The concept of health and wellbeing has evolved over time and progressively broadened to incorporate a huge number of issues and considerations within the real estate sustainability sector. Certification schemes like Fitwel [and WELL] are commensurately wide-ranging, and cover factors related to the indoor environment as well as aspects such as healthy foods, outdoor amenities and green spaces, among others.

Critically, these schemes weight different issues according to their level of scientific evidence and their degree of impact on health. With its 63 evidence-based strategies, Fitwel enables recent research on health and wellbeing to be practically implemented in our daily lives, whether it is in our offices or homes. Its research background is robust, with over 3,000 scientific studies incorporated and input garnered from multiple stakeholders.[2]

Fitwel enables recent research on health and wellbeing to be practically implemented in our daily lives, whether it is in our offices or homes

I have personally embarked upon the health and wellbeing journey by initially qualifying as a Fitwel Ambassador. I have started in this way as I believe that health and wellbeing certifications offer several multidimensional benefits towards people, the environment and have the potential to materially contribute towards securing a better future for both.


Five major benefits of certifying your assets through Fitwel:

  1. Occupant health, wellbeing and productivity
    A healthier building improves occupants’ wellbeing, productivity and satisfaction, increasing employee retention rates, company attractiveness and reputation.
  2. Tenant attraction, retention, longer lease terms and capital value
    We have arrived at a time where location, aesthetics, condition [etc] are not the only ones that will influence and determine your building’s attractiveness. Fitwel could be a tool to improve your building’s facilities, efficiency and even originality, following sometimes only very minor changes.
  3. A framework for a stronger strategy for the future
    Fitwel helps you to verify your approach to health and wellbeing, incorporating health and safety procedures, procurement and supply chain, sustainability and transparency. Additionally, through recertification every three years, Fitwel ensures that your building performance is not only maintained but also [and ideally] continually improved.
  4. Better practices and behaviours contribute to wiser asset and resource management
    Fitwel could push the boundaries of your overall management strategy at the asset level, resulting in the delivery of not only health and wellbeing-related infrastructure improvements, but also general improvements in tenant engagement/management practices, which may ultimately lead to increases in tenant satisfaction. These can benefit the overall performance of the building and increase the property and facilities managers’ consideration and awareness of tenant needs.
  5. Science-based and continuously evolving
    Fitwel’s strategies follow the latest research on health and wellbeing. Aligning to Fitwel therefore provides a way to ensure that your buildings meet the current and future health and wellbeing related requirements of its occupants.

Finally, we all love better looking, more efficient and pleasant cities. Each building resembles a piece of a puzzle for a healthier and better looking future. Fitwel is a way of contributing to the wider community and be at the forefront of future innovation.

If you’d like to know more about health and wellbeing and the Fitwel certification, do not hesitate to get in touch with our consultancy team.


[1]The Business Case for Healthy Buildings: Insights from Early Adopters. Washington, DC: Urban Land Institute, 2018
[2]Reference Guide for the Fitwel Certification System. Center for Active Design. New York, NY. Version 2. July 2018

GRESB Results 2017: How SIERA Delivered Immense Efficiencies

The GRESB Results 2017 are out and the EVORA team is eagerly reviewing the scorecards and reports to see how our participating clients fared. Early indications are that the news is generally excellent. EVORA will have a presence at the results event in London next week, so we look forward to joining the other attendees to get GRESB’s view on the overall direction of travel.

Visit our GRESB support service page.


As one of the members of EVORA’s GRESB delivery team, I’ve been reflecting on the journey we took over the summer months to get to this point.

From a numbers perspective, it’s interesting to me that the effort to collate, validate and aggregate many and often disparate data points gets distilled down to a handful of scores across the main GRESB Aspects. The process of data gathering is a necessary function and can take a lot of time, but it’s important that participants and their delivery partners allow for time to understand the materiality of the data in each of the Aspects in relation to their business strategies. However, this is easier said than done when delivery times can often get compressed near the submission deadline. So it’s even more important that there are tools that drive efficiency in the data gathering and validation process so that we can take a step back from the detail to understand what the data is showing us.

[clickToTweet tweet=”@GRESB #data gathering can take a huge amount of time. The good news is that much of it can be automated with #SIERA.” quote=”GRESB data gathering can take a huge amount of time. The good news is that much of it can be automated.”]

For us as a delivery team, our system SIERA was vital in being able to provide the efficiencies we needed to be able to manage the sheer quantum of data that we were handling. The number of GRESB submissions that we were directly involved with delivering increased from last year by 57% to 36 in 2017. As many will appreciate, the sharp end of the data processing often relates to asset level data as this is more granular, so usually more assets means more data. To put this into context, in these direct submissions, we saw an 84% increase to just shy of 1000 assets collectively that without SIERA we would likely have found far more time consuming to manage.

New to SIERA? This video explains the software in less than 2 minutes.

SIERA is one of the systems that is helping with the shift away from manual entry to more automated transfer of data to the GRESB portal. Our Managing Director, Chris Bennett, wrote previously on how a more seamless transfer of data is welcome but it’s important we have visual clarity of the data being submitted. I’d like to explain a little more how SIERA helped provide both visual clarity but also massive efficiencies.

First of all, we had replicated GRESB’s Asset Level interface in SIERA so we could automate the transfer of not just the Performance Indicators but also a key set of qualitative asset level question responses and building characteristics. This meant that when we were happy with the data we could simply upload the SIERA template directly into the GRESB Portal and populate the Portfolio data, thus entirely removing the need to manually enter data into the GRESB Asset Spreadsheet.

This integration is only possible because SIERA’s database structure is fully aligned to GRESB’s data requirements. Even GHG calculations and waste volumes by disposal route are automatically calculated, which further reduces the chance of human error.

[clickToTweet tweet=”EVORA’s @sierasoftware significantly reduces the risks of human error when it comes to @GRESB’s #data requirements.” quote=”SIERA software significantly reduces the risks of human error when it comes to GRESB’s data requirements.”]

In 2017 we took SIERA beyond the Asset level interface to drive further efficiencies by automatically calculating the responses to a number of percentage coverage-related questions. Again, this was only possible due to SIERA’s ability to hold broad range of data types. For example, SIERA can store and profile EPC data for any EU region which meant that SIERA could automate the response to Q31, saving vast amounts of time using what would otherwise likely be spreadsheets. SIERA also replicated question RC 5.1 utilising the property characteristic information SIERA holds, which helped to align responses to the Performance Indicators.

The examples that I have highlighted in this post demonstrate how SIERA helped to save countless hours of data input which we typically estimated to be around a 70% time saving. EVORA is continuing to expand the question responses SIERA can auto-calculate and survey Aspects that can be more efficiently answered, so we look forward to being able to support on even more GRESB submissions in 2018.


Questions? Come and meet us at the GRESB Results 2017 Launch event in London on 13th September. To book a demonstration of SIERA, please don’t hesitate to get in touch.

 


GRESB Premier PartnerAs a GRESB Real Estate Premier Partner, we are perfectly positioned to provide GRESB support. View our official Premier Partner profile.

We can work with you to complete the submission and understand your scoring, as well as develop a sustainability plan that will improve your future GRESB performance and align with your organisation’s key environmental objectives.

New Guidance on Climate Related Disclosure and Reporting

On December 14th 2016 the Financial Stability Board’s Task Force on Climate Related Disclosure published its long-awaited recommendation report. The report sets out recommendations for helping businesses disclose climate-related financial risks and opportunities.


The report states that the impact that global warming can have on economies is widely recognised.  However, at present, it is difficult for investors to know which companies are vulnerable to climate risks.  It is recognised that without financial disclosure, the financial impacts of climate change may not be effectively priced.  Pricing of risk is an essential function of financial markets.  It it is increasingly important to also understand the governance and risk management context in which financial results are achieved.

[clickToTweet tweet=”At present, it is difficult for investors to know which companies are vulnerable to #climaterisks.” quote=”At present, it is difficult for investors to know which companies are vulnerable to climate risks.”]

The Task Force states that non-financial disclosures should be:

  • Adoptable by all organisations
  • Included in financial filings
  • Designed to solicit decision-useful, forward-looking information on financial impacts
  • Strong focus on risks and opportunities related to transition to lower-carbon economy

The Task Force’s recommendations apply to all financial sector organisations including real estate asset managers and owners. Importantly, it is recognised that large asset owners and asset managers sit at the top of the investment chain and, therefore, have an important role to play in influencing the organisations in which they invest to provide better climate-related financial disclosures.

Recommendations are structured into four categories, as summarised below.

Governance

Organisations should disclose their governance approaches covering climate-related risks and opportunities.

Recommended disclosures:

  • The board’s oversight of climate-related risks and opportunities
  • Management’s role in assessing and managing climate-related risks and opportunities

[clickToTweet tweet=”Orgs should disclose their #governance approaches covering #climate related risks and opportunities” quote=”Organisations should disclose their governance approaches covering climate-related risks and opportunities.”]

Strategy

Organisations should disclose actual and potential impacts of climate-related risks and opportunities.

Recommended disclosures:

  • Climate related risks and opportunities the organisation has identified over the short, medium, and long term
  • The impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning
  • The potential impact of different scenarios, including a 2°C scenario, on the organisations businesses, strategy, and financial planning (a clear link to the adoption of science based targets)

[clickToTweet tweet=”Orgs should disclose actual and potential impacts of #climate related #risks and #opportunities” quote=”Organisations should disclose actual and potential impacts of climate-related risks and opportunities.”]

Risk Management

Organisations should disclose how they identify, assesses, and manage climate-related risks.

Recommended disclosures:

  • Processes for identifying and assessing climate-related risks
  • Processes for managing climate-related risks
  • Processes for identifying, assessing, and managing climate- related risks are integrated into the organisation’s overall risk management

[clickToTweet tweet=”Organisations should disclose how they identify, assesses, and manage #climate related risks” quote=”Organisations should disclose how they identify, assesses, and manage climate-related risk.”]

Metrics and Targets

Organisations should disclose how metrics and targets are used to measure and manage risk.

Recommended disclosures:

  • Metrics used to assess climate risk
  • Scope 1, 2 and if appropriate (3) GHG emissions
  • Targets used to manage climate change risks and opportunities

[clickToTweet tweet=”Organisations should disclose how #metrics and targets are used to measure & manage #risks” quote=”Organisations should disclose how metrics and targets are used to measure and manage risk.”]

To underpin these recommendations, the Task Force also sets out seven principles for effective disclosure.

  1. Disclosures should represent relevant information
  2. Disclosures should be specific and complete
  3. Disclosures should be clear, balanced, and understandable
  4. Disclosures should be consistent over time
  5. Disclosures should be comparable among companies within a sector, industry, or portfolio
  6. Disclosures should be reliable, verifiable, and objective
  7. Disclosures should be provided on a timely basis

The Task Force’s recommendations provide a foundation to improve investors’ and others’ ability to appropriately assess and price climate-related risks and opportunities.   They are wide ranging but also practical in the near term allowing the financial industry to develop and grow capability to report within a structured framework.

For information and if you want to get more involved, a public consultation to solicit views on the Task Force’s recommendations is now open until 12 February 2017 and can be accessed here.


EVORA is uniquely positioned to support commercial real estate organisations in the development and reporting of climate risk strategies through to implementation of management plans and collation and analysis of sustainability data using SIERA – our industry leading sustainability management software.

Please do not hesitate to contact us for more information.

[clickToTweet tweet=”EVORA is uniquely positioned to support #CRE firms with dev & reporting of #climate risk strategies” quote=”EVORA is uniquely positioned to support commercial real estate organisations in the development and reporting of climate risk strategies.”]