If you are a real estate manager, entrepreneur or enthusiast, it is important to appreciate that ESG is becoming a crucial factor for success in this industry. ESG highlights a company's focus on sustainability, with the focus on three main areas, environment, social and governance. In the real estate industry, ESG is attracting great interest because every stakeholder, from property buyers to tenants, wants their decisions to have positive impacts on the environment and society. They want to feel part of the global society making a big impact in addressing issues like global warming and climate change, which have refused to go away.
So, "how do you take advantage of ESG real estate and related services to rapidly grow your company?” It is time to embrace operations and responsible/ sustainable commercial or residential properties management. Keep reading to learn about the main benefits that come from adopting sustainability in the property industry. We will also highlight the main strategies that you can employ to make your real estate services more sustainable to win the support of more stakeholders.
The Benefits of ESG Real Estate
The idea of environmental, social and governance (ESG) real estate has created a new way of evaluating and evaluating both commercial and residential properties. As evidenced by the increased participation in the GRESB real estate assessment, property or building companies cannot be left behind as other parties focus on making the planet a better place. The lovely thing is that adopting real estate sustainability services comes with a long list of benefits, including the following:
- Helps to Extend the Utility of Materials
One important area of sustainable houses or buildings is the materials that are used in their construction. Developers who use sustainable materials in their real estate work and emphasise recycling help increase the utility of materials. This helps to reduce the rate of harvesting new materials and to also reduce the pressure on the environment. This is an excellent way to preserve the resources available today for future generations.
Another method of extending the utility of materials is renovating old buildings to achieve two things.
- Renovating an old building helps to make them last over a longer period. This is an excellent model for sustainability in that your real estate firm will not need to build new properties. You will save the cost, reduce energy loss, and grow profitability of the company.
- Use the materials from the old buildings to make new ones. For example, the blocks, metallic parts, and wooden rails might still be reusable. Note that for your real estate to be considered sustainable, the materials do not have to be used directly in the same industry. If they can be recycled and used in other industries, it is still possible to save energy and reduce negative impact on climate change.
- Keeps the Cost of Real Estate Operations Low
To create a green building, developers have become very innovative. They come up with creative designs that help to optimise the available natural resources to help keep the cost of operations low. For example, your ESG real estate strategy might target buildings with large windows to allow light to easily pass into all the rooms.
This can help to reduce the cost of power that could have gone into lighting, heating or cooling such houses.
Another method of keeping the cost low is using green energy to promote sustainability. When you adopt renewable energy models, such as solar by installing solar panels on a building, the cost of lighting and heating will come down significantly. Such an asset would also be of great interest for investors in commercial real estate. The buyer will also enjoy a reduced carbon footprint and limited negative impact on climate.
- Helps to Win More Customers
Whether you have commercial houses designed with green facades, recycled materials, or additional solar panels installed on the roofing, the chances are that a lot of clients will be interested. They will want to be associated with the progressive designs because they will ultimately keep their bills low and enjoy living there.
You will realise that most environmental, social and governance (ESG) investors are willing to also pay more for your properties. They appreciate that sustainable technology and assets can be expensive in the short term, but the reward will be impressive in the long term. Therefore, ESG will help you to win more investing clients, grow sales and profitability.
- Easy to Interact with the Environment
Many are times when people travel for hundreds or thousands of kilometres to interact with nature. It can be a visit to that beach, jungle or nature reserve to see wildlife. However, a good ESG real estate plan can help to make this an everyday experience. By introducing plants or ensuring the natural vegetation is not disturbed during development, such buildings guarantee users of good connection with nature.
Think of a building with large potted plants and carefully done lawns.
This might be all that investing clients might need to see to make the decision to work with you. It might also be an excellent tool for clients to sign a longer tenancy agreement, agree to move to your house, or buy the property.
Tips for Improving Sustainability in Real Estate
The benefits that we have listed above are only a few of what you should anticipate from ESG real estate strategy. The list can be way longer, including a stronger brand for your company, ease in compliance with different regulations, and reduced negative impact on the environment. To enjoy all the benefits, including making your buildings the preferred investment by customers, you need to make the real estate company sustainable. Here are some useful tips to consider:
- Make Sure to Have a Clear Plan for Sustainability
To stand out on matters of ESG and sustainability, it is paramount to always have a good plan for it. Therefore, identify the main risks & opportunities, areas of interest, set a specific goal and a management plan for achieving it. This is the plan to counter possible negative impacts or issues that stakeholders want to see when making decisions to associate with you.
- Report Your Efforts to Promote Sustainability in Your Real Estate Company
Many investors and clients in the property market will want to know your ESG rating before committing to buy or occupy a house. You should provide a comprehensive ESG report every year so that stakeholders can read through to know the main issues your company focused on and its performance. They also check the ESG sustainability rating-related data of the company and compare it with others before making the investment decision.
When proved to be a sustainable company with accurate data, clients will be willing to pay more for your properties. They will want to be associated with your company because it is causing no risk to the community or the environment. They could even be the link that will draw more customers to your company.
- Support ESG-Related Initiatives
In addition to efforts that directly touch on your properties, good ESG real estate initiatives should also target the people or reduce community-related risks. You might want to consider a plan to support the homeless in the neighbourhood. Such initiatives make more people develop interest in making your properties part of their investments to help transform the world into a better place.
Whether your real estate company is new or has been in operation for some time, sustainability can help it to stand out from the competitors. It will be an excellent idea to add it as an important component of the company’s menu for clients to easily see it. The menu should highlight current ESG undertakings and easy-to-verify information.
Make sure that the info in the menu and your real estate pages is also available in other portfolios for more stakeholders to read and appreciate.
Remember that your sustainability journey should always feature accurate data and reports that demonstrate the company’s efforts by following ESG reporting principles, such as accuracy and materiality. This is only possible when you use good ESG reporting software, such as diginexESG and diginexCLIMATE, to capture data accurately and prepare accurate reports.
Contact us at Diginex.com now for the best apps and professional services in ESG real estate.