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.
In the light of climate change and other pressing ecological problems, sustainability has become one of the most important global issues. For the real estate industry, the significance is huge as buildings use more than 40% of the world’s energy and generate more than 36% of global CO2 emissions. Now that real estate owners and occupiers start to reduce that damning footprint of energy consumption, sustainability is now a top risk priority for the sector — not least because of new ESG regulations.
Demand for ESG analytics is growing as “sustainable” assets boom
In this regard, the Global Real Estate Sustainability Benchmark (GRESB) has established itself as a leading tool for assessing and improving the environmental, social, and governance (ESG) performance of real estate portfolios and assets.
GRESB collects and evaluates ESG data from participating real estate entities as part of an annual assessment process. The assessment covers a wide range of topics, including energy and water consumption, greenhouse gas emissions, waste management, sustainability certifications, tenant engagement, and corporate governance.
Participants submit data on their portfolios and individual assets, allowing them to benchmark themselves against peers and industry standards.
The data collected is validated, scored, and analyzed by GRESB in order to generate various performance and reference indicators. GRESB provides both individual scores and overall scores for different regions, countries, and property types.
Data collection: the N°1 challenge of the ESG compliance
The challenge for asset managers is that the ESG data they need is spread over different sources of data and documents, and it’s presented in various formats, following different methodologies and with different levels of verification. It’s a huge data challenge.
But there are several new technologies that are helping asset managers better manage the data to provide the right dataset for ESG reporting.
Artificial Intelligence: A powerful solution to master the ESG data collection process
Artificial intelligence can be a powerful tool to streamline and optimize the data collection process. For example, at Stonal, our platform uses natural language processing and Artificial Intelligence (AI) with machine-learning algorithms to review hundreds of thousands of real estate documents daily. Clients are then able to identify the data that needs to be communicated and sort it for the export.
Our mission at Stonal is simple: to provide significant owners and managers of real estate assets with reliable data on their properties. As such, we increasingly make use of AI and machine learning, not to replace analysts with algorithms, but to increase the interest and the value of their work. AI helps with locating ESG-relevant data, and it can help with extracting that data; but it cannot provide the bottom-up assessment of a company to understand, for example, whether its climate strategy is robust enough.
What an AI platform such as Stonal’s can provide is a centralized datalake, which uses a very structured model customized for the real estate industry, with clear rules in terms of data collection and verification. It enables asset managers and asset owners to easily access structured sustainability data.
Anticipate future changes towards a decarbonized, more sustainable, and resilient economy
The industry has immeasurable capabilities at its disposal to have a very positive impact on the sustainability agenda, but it needs to be empowered through data to channel that capital towards a decarbonized, more sustainable, and resilient economy.
Anticipating future changes is the foundation for sustainable growth of your assets and will help you comply with environmental regulations. AI technologies and applications, such as Stonal’s, allow owners and managers of real estate assets to have a complete and reliable knowledge of their properties. They can then effectively feed the accurate data to industry-leading platforms like GRESB, contributing to a transparent, committed, accountable real estate sector.
This article was written by Robin Rivaton, CEO at Stonal.
