A majority of businesses aim to scale. In real estate, there is much opportunity with being one of the most lucrative industries globally. Scaling brings common challenges that, if ignored, can harm your organization’s success. With changing stakeholder needs leading to the increasing presence of ESG in real estate being top of mind, the ability to uphold requirements when scaling is something every professional should prioritize.
ESG in Real Estate
ESG in real estate is extremely cross-departmental and data-intensive. With buildings as major emission sources, decarbonization plans are crucial. The C-suite and board are involved in strategy and oversight, sustainability or financial teams in charge of reporting, to operational or property management teams taking charge of data collection and executing retrofits and other initiatives. The social part of ESG could have interactions with other departments as well. It is important to note that due to the relative newness of ESG integration, governance may be very dependent on how the organization chooses to structure roles.
While we will get to the ESG-related challenges while scaling soon, it is important to note the benefits that a focus on ESG can bring to the world of real estate.
- Reduction of Operational Costs: can lead to a reduction of 30% of water usage, 40% of energy usage, and 10% to 30% of overall building maintenance costs.
- An Increase in Returns and Valuation: a “higher percentage of real estate companies exhibited an increase in returns and valuation when their ESG performance rose compared to when it fell.”
- Risk Reduction: with the increase in climate-related risks, preparing and mitigating these risks through ESG initiatives can lead to a more prosperous future for owners.
- Increased Tenant and Employee Satisfaction: for the social side of ESG, paying attention to the wants and needs of employees can have great returns for company culture, productivity, and tenant satisfaction.
Those listed above are not the only benefits of ESG in real estate. Research consistently demonstrates that prioritizing ESG can boost profits and enable scalable operations.
Data Challenges While Scaling
Many of the professionals we talk to looking for a solution are doing so when they have recently scaled or are looking to scale soon. Why is this? While ESG data management solutions can offer advantages to businesses of all sizes, they offer a particular advantage when scaling.
When scaling, additional properties added to your portfolio mean more properties to monitor for ESG purposes. With a small portfolio, justifying the manual collection, normalization, calculation, analysis, reporting, and decision-making based on data is feasible. As your portfolio grows though, the time and resources needed to manage this data increase substantially. Errors rise and often, more time is spent managing data than using it for meaningful changes.
Small issues can add up fast. If you are lagged by manual processes you may not be able to prevent risks and address challenges before they arise. Take emissions tracking and monitoring for example. Manual data management may cover yearly emissions but could hinder identifying easy fixes to cut emissions, boost energy efficiency, and streamline operations.
Even more problematic, with more data there is a higher likelihood of human error when managing it. No matter the size of your portfolio, if you don’t have high-quality data to work with you will run into issues. With incoming regulations, you may not be prepared to have your information audited and you run the risk of inaccurate market valuations. Without reliable data, ESG issues cannot be adequately evaluated or addressed. You also risk issues with investors if they perceive the information you are providing as inaccurate.
The Automation Solution
Luckily, due to technological innovation, these challenges can be solved by embracing innovation. With the power of AI, ScriptString can automate data collection, aggregation, and cleansing leaving you with high-quality data to report and make decisions on.
No more worrying about manual errors, turn the time it takes your employee’s reporting time from months to weeks. With real-time monitoring of your full portfolio, you can make decisions throughout the year and track progress to ensure your goals are met.
Our executive dashboards make it easy to enhance stakeholder engagements by providing them with a quick view of what is going on. Additionally, when it comes to compliance you can rest assured that the process will be easy with a built-in audit trail.
Say goodbye to spreadsheets and embrace automation. Contact us today to see for yourself how ScriptString can simplify your organization’s data management as you scale.
