Explore the six steps for creating a robust and successful ESG strategy and the key questions to consider.
Is Your CRE ESG Program Built for Success?
Whether your organization is focused on initiatives that align to the UN Sustainable Development Goals (SDGs) or financial performance and risk management that align to ESG efforts (or both) it is critical to have a holistic program that extends beyond environmental (E of ESG). While environmental spans areas such as energy consumption, waste, and water usage, Social and Governance (S and G of ESG) are increasingly important to a well-rounded plan. The six steps outlined in this report are designed to help CRE departments and organizations with their full ESG efforts.
6 steps to help you define your ESG program:
1. Structure for Success
ESG can start as a top-down team effort that crosses many functional departments or as a bottom-up grassroots effort pushed by a single person. In whatever form the program begins in an organization, for it to sustain, evolve, and thrive over time, the advocates for its success must ensure the six structural and operational elements are addressed.
2. Identifying Goals & Opportunities
Once the most material issues to your organization and its stakeholders are understood, and your current state has been captured, you are able to determine in what areas your goals should focus, and what metrics would constitute achievable targets. The process of determining these targets should include everyone who will be involved in meeting them, to ensure that they are realistic and that there is real commitment to achieving them. If an organization has not completed a materiality assessment CRE departments can still proceed with developing an ESG Program aligned to organizational goals.
3. Prioritizing Initiatives
Once your goals and opportunities have been identified at the corporate or department level, it is important to outline what actions need to be taken to accomplish them - particularly those that will provide the greatest impact and can be successfully implemented. This can be challenging for many organizations.
4. Implementation
The best-intentioned plans can fail without proper execution. Success depends on visibility to ongoing performance and selecting the right experience and talent. Many times, this includes internal talent supported by external subject matter experts.
5. Measuring Performance
ESG initiatives require quantifiable data and measurement to substantiate the outcomes of objectives that a company is striving to achieve. This figure is an example of linking and aligning a real estate goal to a company objective. The action or initiative to positively influence the outcome happens between the CRE departmental goal and metric.
6. Reports
Determining the standards on which the company will report and the data it will share for those reports will help map its goals and initiatives. For example, a company may elect to participate in the Global Real Estate Sustainability Benchmark (GRESB) or the Carbon Disclosure Project (CDP). This should drive data collection, in addition to operational improvement requirements.
If you have any questions or would like to learn more, please connect with our consulting advisory team. We provide everything from ad hoc services to long-term project support with dedicated, on-site resources, depending on the client need.
