Balancing the scales - ESG

in the Life Sciences real estate sector

Since its inception, the Life Sciences sector has got used to walking a very thin wire when it comes to meeting the extraordinarily high expectations of the public and government, and doing so in a responsible way. It’s been a delicate balancing game. So what happens when the rules and expectations of what constitutes responsible change? And can real estate help?

The fact is that for decades, any less savoury side of Life Sciences has been, to some degree, tolerated. In a sector with high emotional and ethical stakes, a company that develops life-saving vaccines might also dabble in animal product testing. Game-changing drug breakthroughs might fairly bring the occasional regulatory standards scandal. Faith in science might permit genetic modification. Each development brings its own debate, and each is couched in its own notions of corporate responsibility, each judged on its own terms.

Everything has changed however with the new macro demands of environmental, social, and corporate (ESG) goals. In order to attract sustainable capital investment, firms in every sector are reckoning with their own capacity to respond to the largest environmental challenges facing the planet, all while meeting the needs of society and getting to grips with ever-increasing governance demands. And at the cutting edge of ESG adoption, companies are scoring against matrices such as MSCI ESG Ratings to judge management and performance.

In this context, it’s interesting to consider the ways in which Life Sciences firms can leverage their real estate to help with scores. And how developers and operators are making their bricks and mortar o er more sophisticated, so it is easier to do so.

Within the Life Sciences sector, desk based R&D operations might automatically benefit more than manufacturing warehouses when it comes to comparing environmental impact (considering power draw, for example) but all firms can adopt tech to measure and control their physical energy use or manage waste e ectively. And with their instinctive tendency to conglomerate, Life Sciences workspaces can even address the social limb of ESG more easily than other sectors. A well-designed Life Sciences campus space, with options for sustainable travel and meeting spaces, can foster its positive impact on its employees and nearby communities, all the time developing firms’ human capital and attracting an incentivised and engaged workforce. Transparent governance practice meanwhile raises the ethical bar above firefighting discrete headlines, and this only increases public trust for the sector as a whole.

The benefits of a properly conceived, articulated and measured ESG strategy are plain for the planet. By using the opportunities available in property development and proptech however, they also speak to deepening relationships between the Life Sciences and the real estate sector – the building not just of new products but a whole brave new world.