Navigating the ESG software landscape in real estate
As environmental pressures grow, the real estate sector faces increasing demands to adopt sustainable practices. With up to 40% of global carbon emissions coming from buildings, ESG (Environmental, Social, Governance) solutions are becoming critical tools for reducing the industry's environmental footprint while meeting investor expectations and regulatory demands. However, navigating the rapidly expanding landscape of ESG software can be overwhelming.
Remit Consulting’s Dutch office has analysed the market and uncovered five surprising insights about ESG software that every real estate company should know:
It's not just about energy: Many associate ESG solutions solely with energy efficiency, but these platforms often address broader environmental concerns, including waste management and water use. This expands the scope of ESG software beyond just energy reduction, allowing real estate firms to manage a wider array of sustainability goals.
Social and Governance often fly under the radar: While environmental metrics dominate ESG reporting, the social and governance aspects are becoming more important [Article 6 – Respond]. Tools that track tenant well-being or corporate governance can enhance a company’s sustainability efforts, though they are less developed than environmental-focused solutions.
Data quality is critical: In the world of ESG, data is everything. Poor-quality and incomplete (often estimated) data can lead to faulty insights. To combat this, many ESG platforms are adopting "data-agnostic" approaches, integrating data from multiple systems with the aim of having complete and auditable data sets [Article 5 – Respond] to help ensure that key decisions are made using accurate and reliable information.
ESG-specific solutions offer tailored insights: Specialised ESG platforms provide deep insights, particularly for energy management and sustainability strategies. However, they often require bespoke implementation efforts, including consultancy services. For companies looking to fine-tune their sustainability strategy, these solutions can offer unmatched value.
Established platforms are catching up: Traditional real estate software providers are increasingly integrating ESG functionalities, often through acquisitions. This means that companies can now manage their core real estate operations alongside their ESG metrics in one unified system, without overhauling their existing platforms.
Conclusion
With ESG becoming a priority, it’s crucial for real estate companies to choose the right software solutions to support their sustainability goals. Whether focusing on data management, compliance, or energy efficiency, the right tools can make a significant difference.
To assist you on your ESG Software journey, we have produced six separate articles on the subject. Follow the link to access the documents: ESG Research.