Skip to main content Skip to footer

What is ESG in Asset Management?

alt=""

Building owners are now looking at ESG requirements to respond to both their tenants, employees and shareholders.


While ESG is getting a lot of coverage these days, it is still an alien concept to many. ESG stands for Environmental, Social and Governance. This may be a bit confusing and misleading for some of us, so we are summarising this in the following few points:   

- Environment covers all things related to the physical environment. This is what most people assume when a conversation focuses on sustainability. This covers everything from hazards, pollution, mitigation strategies for wastewater, handling of waste and rubbish, consumption of electricity and the likes, i.e. "being green". 

- Social factors are all items that impact potential working conditions, human rights, health and safety aspects of real estate and its surroundings. This can be from designing and operating parks to open spaces, social activities, space engagement etc. 

- Finally, Governance refers to how a company, owner, corporate or even statutory authorities are implementing the management of these factors. Likely in the form of commitments, charters, and company regulations, such policies around governance are a crucial element of the conversation. 

Building owners are now looking at ESG requirements to respond to both their tenants, employees and shareholders. The maintenance of a building directly impacts the bottom line, and the ability to pivot and react to a fast-changing market is essential to the future of business practice.  

"Engaging with ESG is increasingly important. However, this needs to be checked against roadmaps to success."

It is great to see commitments to ESG. There is a need to structure and understand how to reach lofty ambitions. Without a strategy and a process, all that is seen is greenwashing and the most critical point is to measure success against objectives. 

There are several tools we can use to measure all these. A great tool to measure the energy efficiency of a building's operations is the Energy usage intensity (EUI) indicator. The reporting standard GRESB also creates a structured, well-recognised and well-respected process of data collection and reporting. It is essential to be able to measure the output of an asset before being able to solve any of the issues. New technologies allow asset managers to look at their buildings and assess how they perform and therefore create an opportunity to design a strategy to ensure the assets are being run effectively. 

This is not just tied to 'doing the right thing' anymore – there are real, tangible benefits to owning and investing in ESG real estate. This combination of factors including better covenants, lower operating costs (with an investment into the technology), future-proofing, ensuring 'stickiness' of existing tenants, reduced workload and social pressures and improved immediate geography leads to better marketability, less attrition and therefore improved returns. 

Liked what you read? Subscribe to our mailing list for more thought-pieces on the latest in commercial real estate.

---

Article enquiries

Contact our Colliers Editorial team here.


Related Experts

Stephen Bruce

Executive Director & Head

Real Estate Management Services

Singapore

As Head of REMS Singapore my role is to develop and drive the REMS business and team for wider success. My passion in real estate started young with a focus on asset management and later into consultancy. I have over 17 years of experience working for an on behalf of landlords throughout the Asia region. I have worked closely across portfolio landlords and single-strata landlords alike. A core focus has been how to improve the productivity, efficiency and service delivery for assets to ensure we can acheive the best possible outcome.

I have worked across several disciplines across real estate - a focus has been on asset management and property management for and behalf of Landlords. A great passion is how we can alter the industry towards adoption of ESG policies, methods and deliverables in tandem with management operations. With new technology now a major focus in real estate, the industry has become more exciting than ever before.”

I am a passionate believer of real collaboration and encourage cross department learning as much as possible. A win for one team should always create a strong and positive opportunity for another.

As a father of 2 young girls I am constantly on the look-out for new and exciting adventures to expose them to. A keen tennis and hockey player, I can often be found hitting a ball somewhere.

View expert

David Berger

Sustainability Manager

Real Estate Management Services

Singapore

David is a Sustainability Manager for the Real Estate Management Services (REMS) team in Singapore where he is focused on implementing ESG initiatives across the built environment. 

David has over a decade of experience improving building performance through innovative energy efficiency and sustainability solutions. He believes that buildings should be efficient, healthy, comfortable, and accessible for all stakeholders. David has expertise in conducting energy audits across building typologies, performing building-related research, working with certification programs, assessing technical solutions, and creating sustainability plans.

While ESG issues may seem intimidating, David believes they represent key opportunities to improving the operations, performance, and health of buildings and organisations.

View expert