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SIERA Fund View streamlines the sustainability performance of investment funds

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Fund View is a powerful sustainability software tool that helps you manage reputational risk and engage with stakeholders. A single platform for visualising and enriching all asset data on fund-level dashboards, Fund View prioritises actions to optimise CapEx and OpEx for sustainable real estate.

Who benefits from Fund View, and how does it support sustainability?

EVORA Global purpose-built its SIERA sustainability software to deliver a seamless user experience for property, asset, fund, and ESG managers. Our new Fund View software feature provides a comprehensive view of your entire fund portfolio for effective teamwork on one secure, accessible sustainability platform.

Fund View tracks and compares sustainability data for all your funds against set targets, helps you assess the sustainability ranking of each fund, identifies potential issues and opportunities for improvement, and recommends actions to optimise the operational performance of each fund.

Together with SIERA’s single login, Fund View streamlines your fund management activities to make your workday easier and simpler. Rather than juggling multiple logins for separate sources and systems, your property, asset, and investment teams can now collaborate to make fast data-driven decisions and construct strong business cases for resilient sustainable real estate portfolios. So, how does Fund View work in practice?

How does Fund View drive sustainable real estate?

Our user needs drive Fund View. By listening to the challenges faced by our existing SIERA users, we’ve developed new features to support financial decision-making for stronger sustainability performance. Your customised Fund List ‘home page’ summarises key facts about each fund you manage. From here, you can easily navigate to individual Fund Dashboards to check your sustainability outlook on visual cue cards.

Fund View helps you track and manage the sustainability performance of your real estate funds by improving asset Performance, pinpointing low Data Quality, setting targeted Action Plans, and facilitating regulatory compliance, with alerts for Energy Performance Certificates set to expire within 12 months. Combined, these capabilities enable your team to take charge of sustainability risk factors and unlock emerging opportunities to avoid value erosion. Stay vigilant!

Our forthcoming Net Zero Carbon feature is coming to Fund View soon, so you can track progress against net-zero commitments at fund and asset level and lead the way in sustainable real estate investments.

How does Fund View allow you to explore the data?

Although thesehandy Information Cards present accessible visual summaries, the real benefit comes from taking a deeper dive into each topic. You can select any card of choice to discover more detailed data insight on your fund’s personalised Data Quality, Action Plan, and Performance dashboards. This reduces information overload, simplifies your user experience, and enables you to focus on the most business-critical objectives for each individual asset to benefit your entire fund. Here’s how.

How does the Data Quality dashboard benefit your fund?

Data Quality presents a detailed overview of the quality of energy consumption data for each asset in your fund. This helps you easily spot any missing or weak points in the data for your fund, so you can take steps to enhance your asset data collection to maximise its effectiveness. Collecting consistent high-quality energy consumption data across all your assets not only supports your financial decision-making and enhances the sustainability performance of your fund, but transparent sustainability data is also key for credibility and compliance, while ensuring more effective communication with stakeholders.

Fund View clearly signposts any missing data or instances where an asset’s floor area has no data coverage to alert you to prioritise action. You can also easily identify which utility and/or floor space generates the most significant data quality issues to help target your data management actions. Your most ‘problematic asset’ sits front and centre at the top of your Data Quality list, because improving data quality for this asset will generate the greatest result for your entire fund. It’s the one to watch.

How does the Action Plan dashboard benefit your fund?

To implement a successful sustainability strategy, reduce any potential risk factors, and be able to report on how these risks are being managed, you need to put in place Action Plans for each asset.

Targeted actions to improve the sustainability performance of your fund need to be set and routinely adjusted. Keeping track of improvements, financial costs and target due dates are must-haves for your energy consumption, waste generation and recycling, and carbon emissions.

Fund View’s Action Cards help you monitor which activities are in progress, whether there’s any inactivity threatening to stall your progress, and present clear reminders to secure approvals or conduct viability assessments before taking further action. Action Plans also display relevant financial costs and can be updated to reflect new decisions and priorities impacting on the investing plans for each fund.

It’s important to note that Action Plans correspond to a broad range of categories potentially affecting your fund performance: biodiversity, building performance, community engagement, energy, governance recommendations, health and wellbeing, social value, tenant engagement, waste, recycling, and water. Nothing is left to chance.

How does the Performance dashboard benefit your fund?

Your Performance dashboard reveals three key data insights that shine a light on the accuracy of your Data Quality – and how near you are to achieving targets set in your Action Plan.

  1. Actual and supplier-estimated consumption data
  2. Automated calculations for carbon emissions data (covering your fund’s total carbon footprint: Scopes 1 to 3)
  3. Any missing data gap-filled from comparable indicative data

Although less accurate, estimated data is better than no data when it comes to measuring your Performance against set target reductions in your Action Plan, or for a specific timeframe in the current year compared with the same timeframe in the previous year.

By tracking progress towards set sustainability targets, such as energy and water consumption reductions, you can improve the sustainability Performance of your assets over time, identify where cost savings can be made, and increase the overall value of your real estate portfolio to attract more and more ESG-conscious investors.

How are funds ranked for Net Zero Carbon performance?

Ambitious net zero goals add credibility to your business if you deliver on your pledges. That’s why we’re developing Fund View to track your carbon emissions data and help measure the Net Zero Carbon performance of your fund. Visualisations will chart your data every month or quarter to periodically illustrate whether your carbon emissions are above or below set targets for each asset and, ultimately, your complete fund.

What’s next in store for Fund View?

Fund View keeps you updated on your energy and water consumption, sustainability Performance, Energy Performance Certificates, Action Plans, and Data Quality for all your funds. Next in store, SIERA’s Net Zero Carbon module will add even more valuable insight to support your investment funds. And take EVORA Global one step closer to achieving its vision of accelerating the evolution and adoption of real estate sustainability to enhance the wellbeing of the planet and its people.

Join our community to read about SIERA’s forthcoming Net Zero Carbon sustainability software release, plus insightful EVORA Global news and views.

SIERA: the backbone of ESG reporting at EVORA

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Clarity and accuracy of data are vital when it comes to ESG reporting. It is the cornerstone across all sectors for understanding sustainability performance – this is no different within commercial real estate. Quality data is essential because if you cannot see how an asset is performing, you cannot see where improvements are needed. If these areas for improvement cannot be identified, it restricts the ability for a robust, strategic and measurable plan of action to be developed.

EVORA’s solution to this problem is SIERA, our in-house ESG and data management platform. It is designed specifically to streamline reporting and monitoring of commercial real estate investments and funds. SIERA is purpose-built for real estate professionals and, as such, is focused around providing as much added value to our clients and the industry as possible. The platform, along with EVORA’s consultants, enables our clients to make informed decisions which have significant, real-world, impacts on the performance and value of assets. These decisions can help to further drive the ESG agenda and work towards solving some of the most pressing issues currently facing the industry.

I am a Junior Consultant at EVORA and joined in March 2022. I work with multiple clients and funds, providing support across various aspects of their ESG and sustainability programmes including performance monitoring, INREV and EPRA reporting as well as GRESB submissions. Across many aspects of my work, I rely on SIERA, whether that is managing and exporting large data sets for GRESB or EPRA reporting; or creating Net-Zero Carbon pathways at the asset and fund level. Beyond its ability to store all this complex information at varying levels of granularity, it also has a clear user interface which allows for the easy navigation and visualisation of data. This is used to drive discussions with our clients while simultaneously allowing for the accurate completion of reporting requirements within the industry.

Last year, SIERA was highlighted by PwC as one of the top technology solutions within the ESG Reporting category in the Tech for Impact Top100 rankings. It is an excellent achievement and highlights the hard work which has gone into the platform over the last ten years. However, SIERA is continuously evolving, and SIERA+ is the next step in providing our clients with an intuitive tool that builds on the foundations of SIERA while simultaneously enabling a better user experience.

For more information on how EVORA and SIERA can help you, please book a demo or call +44 (0)20 3326 7333.

Sustainability software helps commercial real estate save energy – here’s how 

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Investing in energy-saving sustainability software helps combat your surging energy costs and reduce your carbon footprint. Energy data insight, visual dashboards, and strategic action plans interact to optimise your energy consumption, drive cost savings, and deliver a clear roadmap for net zero compliance and resilient assets. 

What is sustainability software? 

Sustainability software reveals a detailed analysis of your energy consumption and carbon footprint, equipping you with the knowledge you need to streamline operations, make fast data-driven decisions, and safeguard your assets from fluctuating energy markets and environmental risks. Tightening your energy belt is a smart financial move, while tracking carbon emissions optimises your net zero roadmap for resilient assets. 

When combined with expert energy management consultancy services and green finance, sustainability software not only trims your energy consumption and carbon output but leverages a sustainable advantage in commercial real estate. Getting more done with less on one purpose-built platform delivers multiple business benefits for and beyond sustainable energy-saving. Here’s how. 

How does sustainability software slash energy? 

Leverage data insight to save energy consumption 

Incorporating sustainability software into your business strategy is like having a powerful ally in your corner, who’s dedicated to optimising your energy consumption. Gathering data from several energy sources, like automatic meter readings (AMRs), sensors, and power monitoring software (PMS), sustainability technology keeps vigil over your energy usage. Whether you’re tracking energy metrics in real-time or at quarterly intervals, sustainability software automatically notifies your sustainability and asset teams when energy levels reach a specific threshold or when there’s a potential problem. Readily available data and alerts support responsive decision-making to save energy consumption, waste, and expenses. 

Imagine being able to compare your current energy habits with those of the past. Sustainability platforms do just that. Importing legacy and current data, sustainability software verifies and analyses energy consumption, water usage, waste treatment, and carbon emission timeframes to deliver a comprehensive overview of your sustainability operations. Finding changes in energy consumption and associated metrics supports better understanding of what’s causing those shifts over time, so you can take immediate corrective action to enhance underperforming assets threatening to affect your fund or portfolio. Robust data acquisition and validation pinpoints these “offending energy zones” to improve your high energy-consuming assets. 

At EVORA Global, our purpose-built SIERA sustainability platform centralises Action Plans for collaboration, visibility, and shared responsibility. Action Plans enable business teams to target asset energy consumption, track improvements over time, and strengthen responsive budgeting. Its sustainability software highlights emerging risk factors and identifies any inactivity threatening to jeopardise your progress towards achieving predetermined energy and greenhouse gas (GHG) reductions. Your top five sustainability impact categories are also visually highlighted to prioritise sustainability strategies. 

As AI (Artificial Intelligence), ML (Machine Learning), and NLP (Natural Language Processing) technologies advance, your sustainability data collections could generate scenario-based models and directly evaluate your progress against Paris Climate Agreement and Carbon Risk Real Estate Monitor (CRREM) targets. For example, an upcoming release of our SIERA platform will feature a CRREM-aligned Net Zero Carbon (NZC) feature to supply transparent, science-based decarbonisation pathways that aim to save energy, cut carbon emissions, and set targets for future timeframes for both environmental elements. 

Accessing and tracking sustainability data helps your real estate business anticipate changes in energy consumption trends to proactively respond to disruptive energy markets or supply chains. This informs smart financial budgeting. When selecting a market-leading sustainability software platform, it’s important to focus on automated sustainability data monitoring to keep up to date on changing energy costs. It’s a key driver for adaptive and resilient energy-saving decisions. Added to this, when your current performance and potential new improvements are clearly outlined in your sustainability software platform, alongside cost-savings, your business can better prepare, adapt, and control its energy consumption. 

It’s also crucial to ensure your energy-saving efforts are informed by accurate and reliable data, so pay heed to the adage “garbage in, garbage out” – low quality data generates inferior data insight. Sustainability software can review energy consumption data for all your assets to find data gaps or inconsistencies, and then recommend steps to address these weak points to deliver robust energy data collections worth their weight in gold. 

Visualise your energy data to maximise energy savings 

Sustainability software visually represents your valuable energy consumption, waste, and carbon emission data insight to display visual energy profiles. And handy dashboards highlight abnormal consumption trends or events for immediate attention. For example, SIERA detects anomalies in utility consumption patterns, which could relate to damaged or inefficient appliances using more energy than necessary. By finding these energy-draining operations and areas of waste, your real estate business can optimise its energy usage, reduce its energy waste, and improve its overall environmental impact. 

Track your energy emissions data to optimise your NZC roadmap 

Sustainability software helps real estate businesses capture, track, and measure scope 1, 2, and 3 emissions to accurately measure GHG emissions and achieve climate commitments. According to Closing the Climate Action Gap by BCG, only 9% of organisations measure their total emissions comprehensively, while 81% omit some scope 1 and 2 emissions, and 66% do not report any scope 3 emissions. Organisations also estimate an average error rate of 30-40% in their measurement. Without a complete understanding of your emissions, it can be difficult to set meaningful reduction priorities and track progress. 

Likewise, the GRESB 2022 Real Estate Assessment Results reveal a “slight decrease in energy, GHG, and water scores as a result of real estate portfolios returning to a pre-COVID-19 state of operations” and highlights that the “like-for-like (LFL) increase in energy consumption is most significant in Europe (3% LFL consumption change)” for real estate and investment funds. Going forward, energy and water consumption need to be kept in check. Sustainability software automates GHG data ingestion, tracking, and performance to set achievable reduction targets, helping businesses streamline operations and processes to advance climate commitments. 

Reducing direct and indirect emissions and saving energy consumption is also achieved by implementing physical energy-efficient measures. For example, lighting sensors and motion detectors identify uninhabited areas to control the right amount of light at the right time (daylight harvesting) and switch off idle electrical equipment. Investing in renewable energy sources like UV Solar or purchasing renewable energy from offsite wind turbines is key. Encouraging fuel-efficient vehicles, carpooling or alternative transport, and installing onsite EV (Electric Vehicle) car and bike charging stations helps. Implementing waste reduction and recycling, promoting sustainable practices across supply chains, installing insulation, energy-efficient windows, and high-efficiency heating, ventilation, and air conditioning (HVAC) systems all contribute to energy-saving, but these tactics are beyond the scope of this blog. 

Report your energy data for energy-efficiency compliance 

Conserving energy in your commercial assets also promotes compliance with energy-efficiency regulations and standards. Automated sustainability software generates auditable energy consumption reports and audits to find energy-saving opportunities. In England and Wales, regulations for Minimum Energy Efficient Standards (MEES) mandates that all new commercial property leases must reach a minimum E energy rating or risk penalties. These fines can range from 10% of the property’s rateable value, with a minimum fine of £5,000 and a maximum of £50,000. Starting April 2023, these minimum energy ratings and penalties will apply to all (not only new) leases. Furthermore, MEES is expected to become more stringent over coming years, uplevelling the threshold to a minimum C rating by 2027 and a B rating by 2030. 

To comply with these regulations and avoid penalties, it’s crucial to evaluate your real estate assets now and find those that fail to meet current or imminent new standards. Planning and budgeting for energy-saving upgrades and obtaining necessary approvals are core considerations. Sustainability software can supply Energy Performance Certificates (EPC) to prioritise your energy-efficiency measures, improve your asset value, and mitigate fines. 

Step beyond energy saving to build better assets 

Investing in sustainability software is a smart strategy to save energy and associated consumption or waste generation. It reduces your costs, improves your sustainability performance, and shows your commitment to protecting our planet. At EVORA Global, we’re always developing our SIERA sustainability software and expert consultancy services to help make your buildings more productive, profitable, and resilient to change. 

Don’t fall behind in sustainability technology. Contact the SIERA team (hello@sieraglobal.com) to find out how SIERA can reduce your energy consumption and carbon emissions to future-proof your real estate assets. 

GRESB 2022 is almost here! Are you ready?

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At EVORA we are already preparing our clients and ourselves for the next GRESB cycle. Because, like spring, it is just around the corner.

Every year, the GRESB portal opens its doors on April 1st and closes them on July 1st. During this time, the wires to Amsterdam run hot and there are many sleepless nights for some participants. “If it weren’t for the last minute, nothing would ever get done”, as Mark Twain said.

So, what are the challenges and key deliverables of a GRESB submission?

Data. Data. Data.

Data Coverage is a big deal at GRESB and nearly one-third of the points are linked to consumption data such as energy, carbon, water and waste data. Even if data collation sounds simple, it is not in real life. Data coverage on asset-level can be particularly challenging, especially in the absence of AMR (Automatic Meter Reading). However, data collection alone is not enough. It is crucial to understand the data and to identify inconsistencies. This is where our in-house developed software SIERA enters the scene; not only for GRESB submissions but generally to better understand how efficient buildings are within a portfolio.

SIERA was specifically developed for the real estate investment market. It is a platform that enables a highly effective collection of quantitative and qualitative GRESB data, including comprehensive automated verification and intelligent modelling to achieve accurate and transparent disclosure of asset-level performance data. The SIERA GRESB module enables direct submission to the GRESB portal.

GRESB started requiring asset-level performance data (in the sense of consumption data such as energy, water, greenhouse gases, and waste) last year. Previously, this was at the fund level, which of course means that the data reported to GRESB is now much more detailed. This has not changed anything for SIERA users. However, we at EVORA believe that this is not the end of the journey. Our gut feeling tells us that GRESB will increasingly cover the topic of resilience in the future. And here, too, the Net Zero Carbon Module of SIERA offers the opportunity to create simulations that are aligned with the science-based targets of the Paris Agreement, for example.

But GRESB is not only about performance data, and neither is SIERA. When it comes to providing data on efficiency measures taken in terms of water, energy and/or waste, SIERA offers another very helpful feature: the software collects data by using surveys specifically aligned to the GRESB question set. The surveys can be sent individually for each building to, for example, the responsible property manager who may answer the questions online. The responses are sent directly to SIERA so that the overall picture of the condition of an asset becomes more and more complete.

But coming back to the GRESB cycle.

The picture is as complete as possible, which means all available and relevant data is checked, prepared and verified and finally pushed through the GRESB portal. What happens next? The adrenalin level drops, and we wait until October. But do we really?

In fact, in October, the GRESB results are released, providing not only an overview of how the submitted fund is positioned from a GRESB perspective but – and this is where it gets exciting – also where the fund stands relative to its peers.

Additionally, strengths and weaknesses, as well as potentials, are made comprehensible not only through figures, but also through a series of descriptive graphics.

And what happens in the meantime? We at EVORA will provide our clients with an outlook of the predicted score (as far as it is possible) and an overview of the identified gaps and potentials so that the client has the chance to decide about possible improvement measures in terms of ESG at the half-year. It is important because the same applies to GRESB: standing still leads to falling behind.

However, an ESG strategy should not be a reaction to the GRESB results alone but should exist and be implemented across the board. The GRESB results will help to stay on track and SIERA can support your decision making.

So, the “plan – do – check – act” wheel for ESG measures ideally rolls on continuously and independently of GRESB deadlines. In this way, an ESG strategy can be implemented effectively so that it again has a positive impact on GRESB scoring.

As well as being a GRESB Global Partner, EVORA is also a GRESB leader. In the 2021 cycle, we were supporting over 150 submissions, which is equal to 20% of all Europe’s submissions.

We at EVORA are happy to support you in optimising the ESG & GRESB performance for your fund and your company, and in getting your ESG wheel rolling!

Interested in finding out more? Contact our experts today.

EVORA Global strengthens team with new hire

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EVORA Global is excited to welcome Helen Cave-Penney to the newly created role of Head of Growth, Europe. Helen will be instrumental in driving the continued development and expansion of EVORA’s proprietary ESG software, SIERA across the UK and Europe.

Helen brings with her 18 years of experience, having spent the last 2.5 years as Head of UK Sales at Coyote Software, a commercial real estate software company. She has spent over 13 years in the real estate industry providing strategic business development and sales within companies such as BNP Paribas Real Estate and CBRE.

As EVORA continues to position itself as the leading ESG advisor and software provider to the real asset investment markets, driven by its purpose to accelerate the flow of capital to ESG investment, Helen will support its strategic growth plans with specific focus on the rapid global expansion of its ESG software platform, SIERA.

Chris Bennett, Co-Founder and Managing Director said:

“I am incredibly excited that Helen is joining our business in such a key role. Helen’s wealth of experience of commercial real estate and investment, combined with a depth of knowledge and enthusiasm for PropTech, perfectly positions her to support the market and our clients evolve their ESG investment strategies through technology.”

Helen added:

“I am excited to join such a forward-thinking company such as EVORA at such a pivotal time when ESG strategies are so important to the real assets market. EVORA’s already strong position as the leading ESG advisor and software provider offers huge scope and potential to grow globally and I look forward to becoming part of the journey with a great team.”

Software as the foundation for investment grade data (IGD)

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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

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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

Forward-looking ESG data

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To integrate climate risk and sustainability into financial decisions, we need to standardise metrics, improve data quality and ensure that it is forward-looking as well as measuring past performance. For climate risk, this is an essential part of the TCFD Recommendations for integrating climate risk as an investment risk.

Climate risk is divided into three categories:

  1. Transition risk
  2. Physical risk
  3. Litigation risk

They all have forward-looking components. In ESG data terms, we can use historic data and data models to project future implications. We can do this more easily for the E in ESG because we know that we’re operating within planetary boundaries so we know there are limits. The Stockholm Resilience Centre (2015) monitors the nine planetary boundaries shown below.

Whilst this illustration doesn’t show us overshooting the climate change planetary boundary, that is because we haven’t yet. We are on track to do so with our present rate of greenhouse gas (GHG or carbon) emissions. That is why, in 2015, the UN Paris Agreement was signed by 195 states. This Agreement set us on a course to reduce emissions to Net Zero Carbon (NZC) by 2050, which keeps global warming well below 2°C, and ideally 1.5°C, to prevent catastrophic, non-linear climate change.

Over the last two years, many real estate companies and investors have committed to a Net Zero Carbon target and some have a pathway to get there. For most fund managers, they have not yet had time to project out a NZC pathway for their fund and real assets.

A science-based NZC pathway can show a clear route to reducing emissions each year. We need to be over halfway to NZC by 2030. However, local markets will move at different speeds depending on their starting point today; the local regulations; the cost of energy and carbon emissions; and, to some degree, the local awareness of a changed climate and how this forces climate adaptation. Climate adaptation will be required to protect against extreme weather events, which have become fiercer and/or more common over the past decade increasing insurance losses and premia.

These climate risks are the reason why ESG data needs to be forward-looking.

At EVORA Global, we have developed our SIERA software to be forward-looking on climate risk. We have worked on two new modules. The first is focused on NZC and transition risks and this is already available. The second builds on our partnership with Moody’s 427 physical climate risk assessment, which is used by our consultancy team. This will enable users to see both sets of climate risk in one place, associated with each asset and fund.

The screengrab below shows the NZC module, shows a real estate portfolio and the fund’s NZC pathway. This uses asset energy data from the last 9-12 months to calculate carbon emissions for the whole building. Based on asset type and location, it then automatically projects a science-based NZC pathway out to show the required emissions reduction. The tool can then be used to run different scenarios for emissions reduction based on what is know about each asset.

There are other features within the NZC module so do get in touch if you’d like to organise a demo

EVORA Global announces the hire of Ayosha Orth as Associate Director – SIERA Business Development, to further drive its expansion across Europe

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EVORA Global is delighted to announce the hire of Ayosha Orth as Associate Director, SIERA Business Development. Ayosha joins EVORA Global in a pivotal year for ESG, and for EVORA, in which we celebrate our tenth year of business.

Ayosha will work closely with EVORA’s management board, the SIERA software business and the European consultancy teams to support and improve customer needs through technology enabled consultancy services and leading software products. Ayosha has a strong real estate background, especially in DACH and southern Europe, having worked for many years in the field of business development and ESG data management, most recently as Senior Business Development Manager for Measurabl. Ayosha’s multilingual skills, practical approach and understanding of Europe’s real estate investment managers’ needs, means he is a great fit for EVORA’s further expansion plans across Europe.

“I strongly believe that investing in real estate has changed for good and ESG has become part of the zeitgeist. Europe’s real estate investment managers are looking for the successful combination of innovative and tailored ESG solutions both on software and consultancy basis to deliver net-zero goals and integrate climate risk mitigation measurements into their real estate life cycle. EVORA Global successfully provides exactly those tools to meet and exceed customer specific needs. I am thrilled to be joining the most integrated and purpose-led sustainability consultancy in real estate at such a significant time.”

Ayosha Orth, Associate Director

“We are delighted to welcome Ayosha to the EVORA team. With ESG rapidly accelerating up the priority list for real estate investment, Ayosha, with his unique mix of real estate and ESG experience, paired with EVORA’s leading combination of ESG consultancy and software, provides the perfect pairing to support the market navigate through this complex and exciting agenda.”

Chris Bennett, Managing Director

EVORA Global leads HECF to winning coveted ESG award

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EVORA is delighted to have supported our long-standing client Hines European Core Fund (HECF) in helping them win the 2021 PREA Real Estate Investment Management ESG award, beating 59 other Funds to the prestigious title.

The awards recognise PREA members at the forefront of environmental, social, and governance (ESG) issues within real estate investing and provides the industry with examples of best practices.

EVORA works closely with HECF to define and develop their sustainability vision across a diverse range of buildings throughout Europe. With a current AUM of over €2 billion spanning 30 assets, HECF has investments in 15 cities across nine countries.

Testament to EVORA’s depth of knowledge and experience in ESG strategy development, complemented by HECF’s commitment to sustainable investing, the Fund was able to commit to the following ongoing actions.

  • Utility data collection program in order to understand, monitor and optimise building operations.
  • Maintain 100% green building certification coverage (many of which are BREEAM In Use assessments conducted by EVORA).
  • 100% landlord-procured renewable electricity (backed by guarantees of origin)
  • Science-based target to reduce greenhouse gas emissions by 42% by 2025, and 60% by 2030 across the portfolio, against a 2018 baseline.
  • Net Zero by 2030 for landlord-controlled emissions.
  • On-site renewable solar thermal panels providing hot water at two assets – Caleido in Stuttgart and Via Crespi in Milan.
  • Numerous tenant and community engagement programmes and initiatives.

“Yet another one for HECF’s trophy cabinet! And once again we are proud and grateful to have played a key role in both strategy and delivery. Particular thanks on the EVORA side go to programme lead and Managing Consultant Sarah Harvey who’s rock-solid project management and technical skills were both critical ingredients to this success. Also, thanks to our team of software developers – led by Sonny Masero and Nick Hogg – whose routine enhancements to SIERA keep extending our reach and impact”.

Oliver Pye, Director