HOW TO GO FROM TALK TO WALK

BY RASHEQ ZARIF, CO-FOUNDER AND COO OF REWYRE

Achieving ESG targets has moved forth as a priority for most real estate investors, owners and operators in recent years. Social and environmental responsibility has catalyzed what were high-level conversations into the need for action around sustainable investments and operations. Alongside the incontrovertible data on global carbon emissions and a growing number of new regulations, the pressure to act is now greater than ever before.

However, pressure does not always equate to meaningful outcomes. Real estate continues to hold itself back with traditional business practices and processes, resisting the inevitable paradigm shift of digital transformation. Even those who want to make impactful changes to their business often don’t know where to start or see the goals as simply unattainable. We at ReWyre have been working on simplifying the challenge by helping real estate operators procure the right sustainable solutions.

The market is slowly waking up to taking responsibility for a more sustainable future. Whether this is because people genuinely care about the environmental impact on everyday life, or because people feel they have a financial obligation to ensure the safety of future generations, attitudes are aligning in the right direction.

New policies and regulations are helping change things too. Globally, we’re seeing standards heighten and scrutiny tighten as pressure from investors, governments and institutions increases year over year.

In New York, over 70% of New York's greenhouse gas emissions come from buildings. As a result, New York City has understood that sustainability must not only have energy monitoring and ratings but add emission limits and associated penalties for buildings.

The most significant result of this legislative push is Local Law 97. Under this law, most buildings over 25,000 square feet will be required to meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits coming into effect in 2030. The goal is to reduce the emissions produced by the city’s largest buildings to 40% by 2030 and 80% by 2050.

From 2025 onward, building managers who do not submit their reports on energy consumption will face severe penalties and fines. Buildings that surpass their annual emissions targets face sizable penalties: up to $268 for every carbon unit the building exceeds its limit.

Elsewhere, the Chicago City Council recently passed a revised building code requiring stronger energy efficiency and electrification standards for new buildings. This new code is aimed at supporting Chicago’s climate action plan, which has set a target of reducing carbon emissions 62% below 2017 levels by 2040.

These regulations support an ambitious national goal to reduce greenhouse gas emissions by 30% from 2005 levels by 2025 and 80% by 2050. The point is that sustainability is a required goal that we must all achieve.

New policies and regulations are an important step to transforming the real estate industry and achieving long-term net zero targets across the US. That in itself is significant and important, but complying with the new legislation will also result in a wide range of long-term benefits for real estate owners and operators.

By investing in energy management strategies and solutions, businesses can reduce their carbon footprint and make a meaningful contribution to creating cleaner and healthier environments for all those who work in and around their buildings.

Not only is this a more responsible way to manage real estate, but there is also an important point to make about reputation. Companies that demonstrate a clear commitment to sustainability will differentiate and make themselves a more attractive proposition for investors, tenants and the wider community.

Secondly, by reducing energy consumption, real estate owners will dramatically lower operating expenses, resulting in improved profitability. Firms that implement more efficient ways of managing utilities and operating costs, will ultimately improve their bottom line. On the other hand, regulations like Local Law 97 means that owners who fail to meet certain standards, face the prospect of severe financial penalties.

Adopting effective energy management strategies will also result in increased asset value and marketability. We are already beginning to see a clear link between companies that have deployed high-performance equipment and can demonstrate long-term sustainability, and asset value.

With more investors signing up to benchmarks like SmartScore, buildings that offer demonstrable carbon efficiency will see greater demand. Tenants are also paying more attention than ever to the environments in which they live and work. Increasingly, they want to be in buildings committed to sustainability and which offer a healthy environment for their teams. Owners and operators that can offer this will see an increase in tenant satisfaction and a decrease in tenant turnover, which again in turn has positive implications for asset value.

The benefits of implementing effective energy management strategies and solutions are clear, but the question remains: how do owners and operators move toward concrete, lasting and impactful action?

An initial step is to engage consulting and engineering firms, which can provide analyses of portfolios and suggest various measures to reduce carbon emissions. With the cookbook in place, the challenge lies in gathering the right ingredients and not ruining the recipe.

If owners and operators are to move from talking about sustainability, to implementing effective change, then technology needs to be a core part of any strategy. The plethora of technology solutions available means that enacting change is easier than ever. Innovative solutions can help firms measure current performance, set clear goals, identify opportunities for improving processes and then deploy technologies to do so. Technology providers can help drive lasting change across the whole real estate lifecycle.

That is where our platform, ReWyre, comes in. With over 100 technology providers on the platform, we connect real estate organizations to the right technologies for achieving specific outcomes. By making it easy to discover, procure and optimize the right proptech for every project, we’re helping real estate companies to take meaningful steps. We’re helping companies to stop talking and start walking.

Achieving ESG targets is not complicated. It’s about measuring current performance, setting future goals, implementing change and tracking progress. There are incredible technologies out there for every step of the process, helping the real estate industry to drive change across their business, the wider industry and our planet.

As the industry wraps its head around new legislation and growing social pressure, levying trusted technology is the way forward.