ESG Software: Reporting functionality in demand.

MANAGING ESG COMMITMENTS

Performance Monitoring Lags Behind Policy Statements

MORE THAN HALF of respondents to a recent survey on environmental, social and governance (ESG) trends in commercial real estate and facilities management confirm that their companies have ESG commitment targets, but just one third have a plan and strategic process for monitoring performance and outcomes.

Building management software provider, Planon, draws the findings from 605 industry professionals in Europe and the United States, including 384 building owners/managers and occupiers, 177 investors and 44 service providers, who were surveyed in April 2022. Notably, about 20% of respondents indicated that most of their job activities/responsibilities are related to ESG.

Environmentally, the priority for more than 70% of respondents is on ‘resource efficiency’, ‘value and supply chain’ and ‘transportation’. Within the social dimension, the priority for over 70% of respondents is on ‘health & safety’ and ‘comfort’. Governance priorities appear more varied, but top picks included ‘compliance’, ‘carbon performance’, ‘project management’ and ‘disclosure’.

Other findings include:

Investment rationale For building owners/occupiers the number one selected reason for buying ESG-related software is ‘improving transparency and accountability’ (26%), followed by ‘save time and resources’ (23%). For service providers the main reason for buying ESGrelated software is to ‘save time and resources’ (32%). Real estate investors selected ‘improve transparency and accountability’ (24%) as the number one reason, but placed less importance on ‘save time and resources’ (12%).

All three categories of prospective purchasers placed similar importance on ‘identifying ESG improvement opportunities’ (21%, 22%, 24% respectively) and on ‘monitoring ESG performance over time’ (22%, 18%, 21% respectively) — i.e. data insights to identify areas in which they can improve their performance.

Products Sensors appear to be the most common hardware application, with 97% of respondents having sensors in at least some of their buildings and 65% reporting sensors in all buildings. There is also a significant deployment of meters within buildings, with a majority of businesses having energy (59%) and water (57%) meters in all or most of their buildings. However, there is less uptake of waste meters (40%).

PLATFORM PRIMER

Peter Altobelli, Vice President with Yardi Systems Inc., fields some questions about platforms for reporting and managing environmental, social and governance (ESG) data.

Q: What is available to help real estate owners/managers track and manage climate risk data and/or other kinds of data required for ESG reporting, both at the individual building level and across portfolios?

Software platforms that enable collection of data into a single location, then push this data to ESG reporting systems are most efficient. By eliminating the need to combine or integrate data across multiple systems, users can improve efficiency.

When seeking a platform for reporting ESG, it is important to choose a solution that will maximize automation, reduce any manual intervention in the data and automate key processes, such as: data aggregation; tracking of key data components; and automation of difficult calculations like Greenhouse Gas Scopes.

Q: What will be required to implement it?

First-time ESG reporters must perform a significant amount of work to collect and analyze data, then upload the data into a reporting system. Companies with longer-term experience in ESG reporting can often reuse previously reported data, making updates where needed.

ESG is a complicated and evolving field so having expert insight on what’s new can be an advantage when navigating the details of submitting information for reporting. Large real estate portfolios often have in-house expertise, while smaller ones tend to use third-party consultants to assist with the challenges of ESG reporting.

Q: How can it be integrated into asset management platforms and harnessed for financial and ESG reporting?

When ESG reporters have all data in the same system as their financial information, management is easier than when combining data from multiple platforms. Once all data is in a single system, combining financial and ESG data becomes a much easier task. On the other hand, combining data from multiple platforms usually requires more manual intervention, adding to the already significant effort.

When considering an ESG reporting platform, users should consider now many additional systems will need to be synched compared to what is built into the primary reporting system. Each additional data system that must be integrated will likely require additional translations/customizations and manual intervention to ensure data integrity is maintained.

For more information, see the website at www.yardi.com

Small-to-mid-size businesses tend to have the highest percentage of hardware across all or most of their business. That’s possibly because they have more resources available than very small businesses and less ground to cover than larger businesses and enterprises.

Integrated workplace management systems (IWMS), computerized maintenance management systems (CMMS) and computer-aided facilities management (CAFM) are the top focus of software investment, with 57% of all businesses planning to begin or augment investing in these products.

Reporting Needs Big organizations are most likely to report on ESG, with only 4% indicating that they are ‘not reporting currently’. However, small and medium-sized businesses aren’t far behind. Ninety percent of owners/occupiers indicated that they are ‘already enacting ESG reports’, with more than 70% indicating they are using ‘standard reporting methods’ to report or disclose their company’s ESG performance and 19% opting for a ‘custom reporting framework’

On average, respondents reported that their companies are using at least two reporting frameworks, and plan to add three new ones, showing a need for services that can offer high level reporting functionality. zz For more information about Planon, see the website at https://planonsoftware.com.

PROPTECH HARNESSED FOR ENERGY AUDITS

A British Columbia proptech company is touting its goal to create a net-zero plan for every building in North America. The approach harnesses analytics, geospatial imagery, an extensive library of digital twins for a range building types, vintages and systems profiles, and the intuitive learning of artificial intelligence to conduct energy audits on a mass scale.

The company, Audette, was part of the 2021 inaugural cohort of Google Canada’s cloud accelerator program for start-ups, and has recently secured investors and seed funding to propel its efforts. Enthusiasts argue that proptech will be indispensable to finding and enabling greenhouse gas (GHG) emission reductions in line with the hugely ambitious targets for 2030 and 2050, which will entail a 38-megatonne reduction within Canada’s building stock, relative to 2019 levels, over the next approximately seven years.

“Hundreds of billions of dollars are spent annually on energy audits and retrofit planning, and Audette is directly reducing those costs on a per-building basis,” says Allison Myers, Co-founder and General Partners with Buoyant Ventures, the lead investor among the company’s backers.

“It presents data at both the macro scale, for economic planning, and to building owners themselves, who use their records to create custom carbon step-down plans for their portfolios,” adds Vida Asiegbu, Principal with another key investor, Energy Impact Partners.

Uninvested onlookers likewise express hope that proptech will both ease and speed the net-zero pathway, but caution much will depend on building-level smart systems with open protocols, which are still far from universal. Nor can macro-level data address pertinent individual building characteristics.

“If the goal is to locate rooftops that could house renewable energy generation, for example, this kind of AI tool could make the choices clearer, but it is unlikely to identify where structures are sound enough for the additional equipment or if the grid can support the added loads,” says Andrew Pride, an engineer specializing in energy management and strategic sustainability plans. “There is a niche, where everything lines up, that will benefit greatly from these kinds of developments. For the rest, we still have human work to do to make them ready for the AI intervention.”

Proudly holding congratulatory messages from the three levels of government are (l-r) Kelson Group’s Alberta Property Manager Denise Cave, President Jason Fawcett and Canadian Certified Rental Building Program Director Ted Whitehead. (Photo: Dustin Delfs

Canadian Certification Program for renters and property managers unveiled in Edmonton and Northern Alberta

First Certified Apartment Building Rental Communities Celebrated In Four Different Markets

This September, Kelson Group became the first property management company in Edmonton and Northern Alberta to have its multifamily apartment buildings recognized under the Canadian Certified Rental Building Program (CCRBP); specifically, its buildings in Edmonton, Leduc, Sherwood Park, and Grande Prairie, AB.

The Kelson Group celebrated its first CCRB-designated buildings in BC in 2016, shortly after the program expanded to BC in 2015. Kelson Group President Jason Fawcett says its newest certified properties in Alberta represent a win-win for its apartment renters and all property management companies, noting, “Our objective with the national CCRBP-approved apartment building program is to provide Edmonton, Sherwood Park, Leduc, and Grande Prairie renters with the peace of mind and a clear quality assurance alternative when selecting their rental apartment home.”

CCRBP is North America’s first quality assurance program that specifically promotes and acknowledges quality for rental housing consumers, as well as professionalism for multifamily property managers and their staff. The program is a huge game-changer when it comes to the rental industry in Canada. Apartment shoppers who choose a CCRBP building enjoy enhanced peace of mind, knowing that their apartment community meets defined standards for quality and service.

In short, says Ted Whitehead, CCRBP Certification Director, “The designation means tenants can rent with confidence. With the added impetus of an increasing number of multifamily companies adopting Environmental, Social, and Governance (ESG) as a strategic business imperative, we expect that over the next 18 months this program will help build a national network of professional multifamily property managers whose focus will go far beyond financial measures to incorporate factors measuring the sustainability and ethical impacts of their investment.”

For a multifamily apartment building to qualify as a Canadian Certified Rental Building, it must meet five mandatory requirements: • Abide by the Program’s Member Code of Conduct • Adhere to the Program’s Mandatory Standards of Practice • Successfully comply with a mandatory thirdparty audit process • Have identified staff successfully complete the program’s training and education component. • Agree to market and identify their building as a Canadian Certified Rental • Building to prospective tenants.

“We are happy to have our members participate in this important ‘for-renters’ initiative,” said Donna Monkhouse, Executive Director of the Albert Residential Landlord Association (ARLA)” At the heart of the Canadian Certified Rental Building Program are 54 standards of practice and associated requirements to which all organizations and buildings must adhere. These requirements translate the concepts of environmental, social and governance into concrete measures that focus on environmental and social responsibility and enhanced corporate accountability.”

“We want renters to recognize that ARLA landlords care about their renters and the buildings in which they live,” Monkhouse adds.

A COMPETITIVE EDGE

In today’s competitive real estate marketplace, internationally recognized ESG benchmark programs like the Global Real Estate Sustainability Benchmark (GRESB) are taking on increased relevance and importance. Not only can CRB certification help enhance an organization’s GRESB benchmarking score, but now, in line with its national expansion, the program has moved from a recognized and approved green building certification program to officially becoming a GRESB Real Estate partner.

Explains Whitehead: “As all levels of government gain greater awareness of the ESG mantra across all industries, there is little doubt that they will soon be asking – or perhaps, demanding – what our industry is doing collectively on this front. Ours is the foremost ESGfocused accreditation program supporting the multifamily industry. And, with many of the REITs, institutional and investor-driven members leading the multifamily industry’s transformation to an ESG discipline, it became imperative to expand this program across Canada.”

“Adopting a strong multifamily ESG framework across the industry is necessary for the industry’s longterm regulatory survival,” he continues. “The multifamily industry provides apartment homes to one in three Canadians, or approximately 4.4 million people. When you take in these numbers and couple them with Canada’s strong public commitment to environmental stewardship and mending the social issues of the day such as diversity, equality housing shortages, income disparities.”

Whitehead says there is little doubt that there will be increased pressure on the multifamily industry to demonstrate what it is proactively doing to address these challenges on all fronts. To date, he adds nearly 13 per cent of multifamily industry companies in Canada have adopted a formal ESG way of doing business.

“That number must dramatically increase if we are to proactively state our case on these fronts,” Whitehead said. “The good news is that most professional property management organizations practice ESG-related activities daily and they just don’t think of them that way. We believe the Canadian Certified Rental Building Program provides a visible grass-roots pathway for professional property managers/ owners to move forward with confidence and success on the ESG front.”

Kamloops, BC-headquartered Kelson Group is the first property management company in Grande Prairie, AB to achieve Canadian Certified Rental Building Program (CCRBP) certification.

Kelson Group Property Management’s President Jason Fawcett and Alberta Property Manager Denise Cave unveil their CCRBP Living Green Together signage for residents at their Heatheridge Estates community in Edmonton, AB. (Photo: Dustin Delfs)