Employees discussing in sustainable workspace

ESG Objectives: From Cost Factor to Investment Issue

Transform your ESG objectives from a cost factor into an investment issue. Read this blog to find out how facility management can do this.

40% of worldwide carbon emissions can be attributed to the built environment – making for a larger carbon footprint than that of the transport sector or industrial activity. Such numbers underline the urgent need for more sustainable buildings. New legislation adds another dimension and transforms ESG (Environmental, Social and Governance) from cost factor into an investment issue, with a leading role to play for facility management.

Whether legislation is the right trigger for driving sustainable business or not, the law does make for an interesting business case. Until recently, many organisations were hesitant to commit, as sustainability was mainly seen as a cost factor. But once you get going with ESG, it becomes clear that it really is an investment issue.

5 reasons to set corporate ESG goals

There are five good reasons for adopting ESG principles:

  • We must all contribute to a sustainable future.
  • Reduced energy consumption translates into lower costs.
  • Avoid fines: with the EU Taxonomy and CSRD guidelines, organisations that fail to meet the set targets risk penalties.
  • Affordable funding: banks will give priority to green organisations and apply more favourable interest rates. Investors are looking for green, future-proof and profitable investments right now, and access to funding will depend on how sustainable your business is. This means that an ESG label will give you a competitive advantage.
  • The battle for talent: Gen Z, future generations, and even prior generations, value working for an organisation that is sustainable and socially responsible.

Facility management in the driver's seat

Under CSRD legislation, organisations are required to report their ESG activities. These are audited annually, making your ESG objectives an integral part of your annual report. This changes the position of facility and real estate management. The role of facility management used to be exclusively supportive, but it can now directly influence aspects on which the organisation must report, giving it a key role in primary processes that are crucial for reaching the organisation's ESG objectives.

It's up to facility and real estate managers to translate the corporate ESG goals into practice. This requires in-depth knowledge of the properties and usage of buildings. Organisations need consumption and emission data per portfolio, building, space or even asset. These metrics can then be used to pinpoint the most urgent impact areas, after which targets can be set and monitored.

4 improvement projects

There are four ways to create more sustainable buildings:

  • Reduce the number and surface area of your buildings Especially since Covid 19 and related developments, many areas have become heavily underused, with only a 10% usage for outliers. This means you are not only unnecessarily adding to CO2 emissions, but you are also paying for lighting, heating, and cleaning of areas you don’t need. Software can give you a detailed insight into how your buildings are being used.
  • Electrify your assets to replace fossil fuel.
  • Generate your own energy For example, by installing solar panels or sourcing green electricity.
  • Digitise and automate, thereby enabling efficient facility services.

Process optimisation

The successful execution of any of these four improvement projects starts with monitoring and optimising processes. IoT solutions – possibly in combination with energy management software – will be a great help here, as they result in fewer errors, lower costs, less waste and more efficiency. The same goes for maintenance: with the aid of a Building Management System (BMS), you can link your usage data to your maintenance process – and make maintenance predictable and automated. Not only is this safer and more economical for the users of your building, but you will find that a well-maintained asset is 30-60% more sustainable.

Opportunities for facility management

In conclusion, we see many opportunities for facility management. By aligning your facility services better with the actual usage, you can diminish the carbon footprint of your real estate portfolio significantly. And by translating your insights into practical actions, you can reach your ESG objectives a lot quicker.

Redney Janssen - Planon

Redney Janssen

Business Development Director ESG

Redney Janssen, the Business Development Director for ESG at Planon, is at the forefront of driving sustainability and operational efficiency in the digital era. With a bachelor’s degree in Business Informatics and over 15 years of IT project management experience, Redney brings a unique blend of technical prowess and strategic vision to his role.

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