The real estate sector is responsible for 35% of global CO2 emissions

The real estate sector continues to feel the pressure to improve transparency around the environmental impacts of buildings to satisfy demands from investors and regulators (such as the EU Taxonomy, CSRD).

In this context, real estate organizations (defined here as companies whose main activity is to acquire and own buildings, construct new buildings, or renovate existing buildings) will have to meet the threshold requirements set by various regulations and include sustainability information in their ESG reporting. For instance, when renovating buildings, these organizations must address environmental aspects such as

• Compliance with maximum water consumption
• Recycling of construction materials
• Limitation of waste generation during construction and demolition processes
• Compliance with pollutant limits in construction materials and components
• Measures to reduce air pollution, etc.

Digital platforms can support ESG data management and disclosure

Real estate organizations should be aware of their buildings' carbon footprints. In this context, collecting data for monitoring and reporting ESG indicators, such as energy consumption, requires reliable data management systems. In response, many ESG data management and reporting software solutions tailored to the needs of the real estate sector have emerged. These solutions promise to streamline and automate data collection and reporting processes.

Vendors frequently customize their platforms to meet regional ESG regulations and considerations. Many offer built-in features to automate reports for national regulations or certifications. Buyers should verify that the vendor’s regional expertise matches the location of their portfolios to effectively fulfill their requirements. Vendors in this area include Alasco (HQ in Munich), Deepki (HQ in Paris), and Measurabl (San Diego), among others.

Additionally, the CSRD directive (EU focus) introduces the so-called Double Materiality Assessment. Organizations subject to this directive must evaluate and disclose not only the environmental impact of their operations but also the financial impact of environmental issues on their balance sheets. In this context, vendors like Measurabl have integrated physical climate risk data into their ESG platforms to help users assess their exposure to heat stress, flooding, and other factors at the asset level.

Considering ESG consulting services for additional support

External ESG consulting services dedicated to the real estate sector, such as those provided by Capgemini, TCS, NTT DATA, Deloitte, KPMG, and Schneider Electric, can provide additional support. These services help organizations navigate complex regulatory landscapes, develop tailored sustainability strategies, and implement effective ESG practices. Consulting services can include:

• Advisory services regarding ESG strategy & roadmap; setting targets, decarbonization goals, and programs; conducting maturity assessments and risk assessments; and identifying areas for improvement. Plus, designing roadmaps and governance structures to achieve quantified GHG emission savings within the client’s organization.
• Sourcing advisory and implementation of digital platforms for ESG monitoring, controlling & reporting. This can be custom-developed, a proprietary solution, or a third-party solution (such as Alasco, Deepki, Measurabl, etc.).
• Helping track supplier data and facilitate ESG-based procurement/collaboration decision-making.

Consultants offer expertise in compliance, risk management, and performance improvement, ensuring real estate companies meet their ESG goals efficiently. By leveraging these services, real estate organizations can enhance their ESG reporting and achieve better regulatory compliance.

Conclusion

In summary, the real estate sector plays a significant role in global CO2 emissions and faces increasing pressure to enhance ESG transparency. Here, digital platforms and ESG data management solutions tailored to regional regulations are essential tools for real estate organizations. Additionally, external ESG consulting services from firms like PwC, EY, and KPMG provide crucial expertise and support.

Would you like to find out which IT service providers can help their clients reach their environmental objectives, and how they do it? Have a look at our most recent RADARs on this topic. PAC has evaluated the IT provider landscape in Europe and assessed providers’ approaches, offerings, and capabilities in a PAC INNOVATION RADAR series on "Sustainability-related IT Consulting & Services”. We have analyzed the specific strengths and weaknesses of 22 IT service providers based on over 30 predefined criteria. The results have been published in 9 PAC RADARs, with each addressing specific customer needs, including 3 PAC RADARs covering France, Germany, and the UK, respectively.