How can property managers improve ESG performance in 2023?
Environmental, Social, and Governance (ESG) considerations have become increasingly significant across all business sectors, particularly in the real estate industry. This means that property management companies need to adopt sustainable practices to future-proof their properties and ensure ESG compliance.
In this article, we’ll explore why ESG is important, the role of ESG in property management, how to manage the lifecycle of buildings and assets, and how Computer-Aided Facility Management (CAFM) systems can support ESG requirements. Other topics we’ll cover include:
- What is ESG and why does it matter?
- What is the role of ESG in property management?
- Why is ESG important in property management?
- How do CAFM systems support ESG requirements?
- How does building lifecycle management impact ESG?
- How does asset lifecycle management impact ESG?
- What are the next steps for property managers?
What is ESG and Why does it Matter?
ESG is made up of three pillars, centred around sustainability: environmental impact, social responsibility, and corporate governance. Essentially, this is important because it focuses on a business’ societal impact, ensuring that they contribute to a more sustainable future.
ESG considerations have gained prominence due to increasing investor and stakeholder expectations, as well as regulatory requirements. Ultimately, the overall aim of ESG practices is to enhance sustainability, minimise environmental footprints, promote social equity, and improve governance standards. Now, more than ever, it is vital that companies set clear, measurable goals to ensure ESG compliance.
What is the role of ESG in Property Management?
Property management companies play a key role in ensuring ESG compliance throughout the lifecycle of a building and its assets. Property management companies can improve their ESG performance by:
- Implementing sustainability strategies.
- Optimising energy usage.
- Enhancing occupant well-being.
- Maintaining high governance standards.
With ESG becoming a topic of major importance in the property management industry, putting realistic processes and systems in place is a necessity for real estate managers and companies.
Why is ESG important in Property Management?
There are many reasons why ESG has become an important business consideration in property management. Below, we’ve highlighted three key benefits of having a high ESG score from a property manager’s perspective:
Property management companies who ensure ESG compliance will attract investors because it reduces risk and is generally more financially viable, particularly in terms of asset value.
Improve asset value.
Sustainably built properties are often higher in market value because tenants and investors prefer buildings with a good ESG score.
Enhance tenant satisfaction.
Many tenants now actively look for properties which ensure ESG compliance because they value sustainability and socially responsible property management.
How do CAFM Systems Support ESG Requirements?
CAFM systems play a pivotal role in supporting ESG objectives because they provide comprehensive tools for data collection, analysis, and reporting. Essentially, these systems make life easier for property managers who want to track and improve the ESG score of their properties. There are many benefits to using a CAFM system, particularly in the context of property management.
CAFM systems enable companies to efficiently monitor, manage, and optimise their operations with a focus on facilitating sustainable practices. This centralised platform enables property management companies to:
- Establish ESG goals and monitor progress throughout the building and asset lifecycle.
- Collect and analyse data on energy consumption, occupant well-being, and other ESG metrics.
- Optimise energy usage, enhance tenant satisfaction, and ensure compliance with ESG standards.
- Implement strategic improvements, retrofits, and upgrades that align with ESG principles.
- Generate comprehensive reports for stakeholders, demonstrating ESG performance.
CAFM empowers property management companies to stay in line with ESG compliance in a way that’s simple and effective. It also makes it easier to engage investors and stakeholders with data that’s accurate and up to date.
The Elogs CAFM system is integrated with Prosure360 which gives you full visibility over your supply chain allowing you to effectively measure your ESG and net zero goals. To find out more about our CAFM system, book a demo today.
How does Building Lifecycle Management impact ESG?
Building lifecycle management and ESG are intrinsically linked in the world of property management. This process plays an essential role in reducing environmental impact and enhancing sustainability.
However, sometimes lifecycle management can be a difficult process to streamline. That’s why CAFM systems have been designed to support key aspects of the building lifecycle, such as:
Operations and Maintenance
CAFM systems allow property managers to monitor energy consumption, optimise resource usage, and implement proactive maintenance practices. This leads to:
- Reduced energy waste.
- Improved operational efficiency.
- Cost savings.
- Enhanced tenant satisfaction.
Renovation and Retrofitting
CAFM systems show which aspects of a property require upgrades or renovations; this enables property managers to enhance energy efficiency, reduce waste, and improve the building’s overall ESG performance.
How does Asset Lifecycle Management impact ESG?
Managing the lifecycle of assets such as equipment, fixtures, and appliances, is another important part of mitigating ESG risks. As with building lifecycle management, CAFM systems can make this process much easier by:
Asset Tracking and Monitoring
CAFM systems give property managers the ability to track assets, monitor their performance, and identify opportunities for optimisation or replacement.
By implementing preventive maintenance schedules, provided by CAFM, property managers can extend the lifespan of assets, reduce energy consumption, and minimise waste.
Asset Disposal and Recycling
CAFM systems can also identify assets that have reached the end of their lifecycle; using this data, property managers can ensure the responsible disposal and recycling of assets at the right time and in a sustainable way. By tracking asset disposal practices, companies can adhere to ESG goals and minimize environmental impacts.
What are the next steps for property managers?
Now that property managers understand the importance of integrating ESG principles into their operations, they need to understand the benefits of CAFM systems and use it to their advantage.
Although CAFM is a software solution, we see it as a people-focused platform that helps make property managers’ lives easier. By using CAFM for building and asset lifecycle management, property managers and companies will be able to ensure ESG compliance, contribute to a more sustainable future and position themselves as responsible industry leaders.
Although CAFM sounds like a technical solution, we are firm believers in maintaining the human touch with our clients. That’s why our CAFM system is backed by an in-house, 24/7 Service Desk who proactively own jobs all the way, ensuring nothing gets dropped.
If you’re ready to improve your ESG performance, make the most of CAFM and request a demo today.