“SBTs in real estate must be based on a detailed understanding of your asset’s performance…”
It was a pleasure to speak at the 2nd ESG & Data Management in Real Estate Forum yesterday (14th September, 2023) in Amsterdam. Among other speakers, It was heartening to hear of responsible investments being prioritised by pension funds and a promise to use voting rights against boards who fail to commit to Science Based Targets (SBTs). It was a good segue into my own talk on ‘The Future of ESG Data Management – Data from the Ground, Up’.
If you don’t understand the underlying space dynamics of your assets, just how can you create, commit to and measure those SBTs?
First, though, its important to unpick the label ESG – too often the label becomes detached from the thing its trying to describe. Put simply, Environmental, Social and Governance data needs to describe how we treat the planet, its resources and its people. It needs to be proactively used to make better decisions that improves the quality of human lives, limit negative impacts. The great thing is that it is also proven to enhance value for investors.
Traditional approaches to ESG tend to be backward looking, aggregated and summarised, and intermittent. Such data has a role to play, no question, but the approach misses opportunities to create change and make improvements in the daily operation of the asset. There are numerous structural weaknesses working with this summary data -it disguises the detailed, variable operation of a building and resident behaviour; it ignores the distributional patterns that emerge over time and makes comparison across assets challenging; it often hides data quality and integrity issues; it lacks specific context and often intermittent and sample-based data collection inhibits trend analysis.
Utopi’s approach to individual space-level and continuous real-time data collection breaks through this summary’s disguise and enables investors and operators to enhance the operation, cost and value of their assets. Crucially, this high-definition data can also be put in the hands of residents so that they can also become a significant agent of change on the path to Net Zero.
To date, we’re monitoring over 20,000 spaces and have collected over 3 billion ESG data points. And this data is being used to set targets and enable change in 4 crucial ways:
1. Enabling site teams to effect changes in real time – spotting and reacting to anomalies in environmental variables and energy usage.
2. Engaging with residents to drive sustainability behaviour change – driving individual and collective action to reduce energy consumption and carbon emissions.
3. Identifying correlations, distributional patterns and behavioural archetypes – identifying outliers, intervention strategies and comparative asset performance.
4. Enabling better design through data – taking our detailed space utilisation data to inform future building design.
And we’re only really getting started. Our data set will grow exponentially as we continue to add further assets to the Utopi platform. The analytical potential of this data to provide a detailed understanding of the real-time performance of residential real estate increases daily.
So, back to our SBTs. Granular, individual-space level and dynamic data, enables a scientific, targeted and strategic approach to optimising asset performance. Without this level of understanding, targets are more likely to be set in hope than expectation.
Author, Andy Doyle – Chief Product Officer at Utopi.