ESG - The REAL Value of ESG in Asset Valuations
“81% of institutional investors in the US plan to increase their allocations to ESG products over the next two years.” (PWC)
PWC’s recent ‘ESG Asset and Wealth Management report’, covered the latest in all things asset management, investments, and of course - the main word on the street, ESG. Not only that, it projected that ESG assets under management in the US will more than double, from $4.5 trillion in 2021 to $10.5 trillion in 2026 — spurred on by the Inflation Reduction Act, which commits $390 billion to fight climate change.
At Utopi, we have seen first hand the asset value increases associated with a greater sense of environmental and social awareness. Not only that but the greater access it can gain asset managers to green capital. And under SFDR Article 8 and 9, access to other green capital will quite simply not exist in the future to those asset owners, managers and operators who don’t prioritise ESG performance.
According to PWC’s report:
“With a keen eye on protecting their economics for an uncertain near future, many asset managers will look to evolve in many ways.
Large players will continue to scale and add new capabilities, including ESG solutions, distribution and technology capabilities, potentially through M&A options.
Niche managers are shoring up their expertise and client base, developing focused and differentiated value propositions.
Regulation (such as SFDR, EU CSRD and the Inflation Reduction Act), market headwinds, persistent inflation, rising costs and fee pressures – will require all asset and wealth managers to scale up and add market leading ESG solutions as they retain and target new investor segments (incl. high-net-worth clients), and meet changing investor preferences for alternatives and private market products.’
Utopi is the specialist ESG technology platform for multi-tenant real estate. We collect data, engage with residents, and report on how your buildings perform to ESG standards. Allowing you to act and increase your asset value, while reducing the environmental impact of your real estate portfolio.
The main challenge for owners, operators and developers is accessing reliable and granular data. This is often a manual task, carried out annually, and can be hugely time consuming. Our ESG technology gives you the data you need to measure performance in real-time, and in an efficient and simple dashboard.
This data can then be used to enhance scoring across multiple ESG accreditations and applies context to consumption data, helping you to reduce waste, and optimise performance. It has also proven a 20-30% reduction in cost and emissions… creating a clear return on investment.
For context, new research by BNP Paribas Real Estate showed that the Build to Rent (BTR) sector alone recorded a strong recovery in 2023, following total volumes in 2022, equating to around £4.3bn - hitting an investment record for its fourth consecutive year. UK BTR investment in Q1 2023 alone also exceeded £1.1bn - revealing investor appetite for opportunities across the sector. So the markets are busy, investment are at a high, now its time to think about long-term gain.
And with experts in Facilities Management saying 3/4 of all respondents say that reducing energy consumption and carbon emissions is the top ESG consideration most likely to impact property value… the writing is on the wall.
With global markets shifting towards a solid ESG focus, and a commitment to understanding and improving our environmental footprint; Utopi are uniquely positioned to offer a solution that not only helps ESG performance, but also improves the bottom line.
For more information on the value we offer, see more here - and if you have any questions about how Utopi can help you drive value for your asset portfolio - make sure to get in touch with our expert team.