Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
Picture this: It’s late Friday afternoon right before Easter break. As a facility manager, you’ve just completed your final meeting for the quarter with the tenants, briefed the security team and now you’re looking forward to going home on time for a warm, tasty dinner. However, a pending task on your list interrupts your plans: you still need to send out the energy reports for last year — a task you have been putting off for a long time. So, reluctantly, you trudge back to the office, open up the computer, pull up the Building Management System, export all data to Excel individually, format the file, write a nice mail and then send the figures out. On your way home, you realize you’ve forgot about the EV-charging station across the street, which — of course — is to be included manually to your Excel. But it’s getting late. So, you decide to address it first thing Monday morning — after the holidays.
This scenario underlines the prevalent misconception in the real estate market: A Building Management System is enough for ESG Reports. In reality the opposite is true. Building Management Systems are primarily designed for facility management rather than thorough data collection. They are focussed on convenience and comfort — not reporting. The outcome? A lack of accuracy, incomplete data, absence of remote control access, and missing alerts for irregular or abnormal consumption patterns. Let’s delve into why a local BMS needs to be supplemented by Utilities Data Monitoring for a robust ESG reporting.
The invisible challenge: Data completeness and granularity
A typical BMS often overlooks various consumption sources, significantly impacting a company’s environmental footprint. The LEED rating system by the US Green Building Council demands the tracking of all energy sources. BREEAM provides extensive energy monitoring guidelines that recommend consumption tracking for components rather than complexes. Studies show time and time again, that stressing data analytics and smart technologies drives operational efficiency and sustainability in real estate — yet to this day 76% of real estate businesses rely on Excel spreadsheets. A BMS often fails to deliver this level of granularity. The lack of detailed tracking often results in incomplete and unreliable information for owners and investors alike. Moreover, organizations such as BREEAM, GRESB and CRREM adjust their scoring requirements progressively. That makes clear distinctions between data sets a soon-to-be necessity for the benchmark. The lack of quantity and quality in data impedes the identification of inefficiencies or areas of overconsumption.
Differing local BMS technologies stretched out across European real estate portfolios and a lack of standardization inevitably pile up the challenges in ESG reporting. While BMS can generate basic operational reports, the detailed data crucial for ESG reporting often falls outside their capabilities. And we are not even considering the harder to track and often overlooked importance of water consumption and air quality monitoring. Guidelines from institutions like INREV, GRESB, and CRREM underline the importance of clear, accurate, and consistent reporting, ideally annually. Most BMS fail to meet this critical requirement.
The pathway set by CRREM for real estate decarbonization emphasizes the need for detailed data for strategic carbon reduction planning. Achieving the 17.5 out of 100 potential points that GRESB assigns for the quality and completeness of ESG data becomes a formidable task with limited BMS data collection. However, if complete and reliable data sets were available, they could significantly improve a company’s scoring in CRREM, LEED, or BREEAM alike — killing multiple birds with one stone.
Utilities data monitoring is redefining ESG reporting
Bridging the gap between BMS capabilities and ESG reporting is not a task to be underestimated. So, how to solve this matter?
Industry pioneers like WDP, a European logistics and distribution real estate company, lead the path towards a clearer and reliable energy data flow — using Utilities Data Monitoring. WDP manages an extensive portfolio of over 300 sites in 6 countries. Their journey towards ESG reporting was burdened by challenges many peers face: lack of standardized data reporting, time-consuming manual data collection, language barriers with facility managers, and more. In their pursuit to improve their ESG reporting, WDP adopted nanoGrid’s end-to-end water- and energy-monitoring platform.
The shift towards a comprehensive energy management platform not only ensured a real-time, standardized, and automated data flow but also led to a deeper level o monitoring for granular consumption data. This facilitated cross-site benchmarking with mere clicks, which previously were 12 phone calls, 8 meetings and 26 mails away. It improved ESG reporting and simultaneously provided obvious energy savings potential once the data was accessible. WDP’s successful transition from a conventional Building Management System to an Energy Management System has set an inspiring precedent for the market. By leveraging technology WDP overcame the complexities of energy data management. The water-and energy-monitoring platform now plays an integral role in developing one of the industries most accurate and most effective ESG reporting.
Laggards to leaders: The inevitable shift towards energy management platforms
In a data-driven age, Building Management Systems remain an essential component of the sustainability puzzle. But they are unlikely to offer the whole picture. Supplementary to tools and strategies that Energy Management Platforms provide, a BMS can be a great way to address local building needs — but not holistic reporting ones. Meeting the rising ESG standards, making data-driven decisions, and demonstrating the commitment to sustainability towards external stakeholders require taking matters into their own hands.
As legislation narrows regulatory requirements in favor of its net zero goal, the need for clearly discerptible data in ESG reporting and scoring models will grow. This drive leaves the implementation of an Energy Management System not just as an option, but a necessity. While longterm maintenance of meters is an uphill battle, the addition of a Hardware-as-a-Service devices, which selected providers offer, can relieve real estate companies from the hassle and ensure automated, effortless energy data flow for years to come.
Recapping: Investors have to be on the lookout for frontrunners rather than laggards. 87% already fear being greenwashed, while 95% of investors use ESG data for making investment decisions. For European real estate business, this means that analyzing specific energy profiles is way more effective than prematurely moving to investment-intensive initiatives such as solar panels or rainwater treatment plants. After all, in the fast-paced world of real estate, data is not just a tool for efficiency; it’s the compass guiding towards sustainable business practices. The question is: are you willing to lead or are you fine with being forced to play along?
This article was written by Vishal Arora, Sales Director at nanoGrid.
