The ESG Real Estate Challenge

This blog addresses a few important questions for CEOs, CFOs, and Boards of Real Estate companies to consider.

1. Is it possible to have green buildings?

2. Why Is This Important?

3. Is this a risk or Opportunity?

4. Should I start to incorporate ESG in my Business?

5. Where can I start on this ESG Journey?

So, let’s do a drill down of these questions Is it possible to have green buildings? Living In Israel, one is privileged to see much construction – a lot of high-rise offices , and residential construction. The first thing I notice is that there is a lot of concrete. I am going to repeat it – I see a lot of concrete. So, I ask whether it is possible to have Green Building, net zero buildings. Concrete is bad. Cement production alone is one of the worst polluters in the world, responsible for 8 % of global CO2 emissions. On the other hand, concrete is necessary.

This calls for Green Build Innovation - and additionally innovative methods and technologies that produce energy efficiency and effectively extend the life of buildings and/or their components.

Some examples: · Low Carbon concrete · Energy-generating glass facades · Integrated Solar Roof Panels · Energy Efficiency Utilization · Microgrids Green Build Verification Real Estate Companies need to start embedding Carbon & ESG Accounting Data in their assets, this starts in the Design & Development phase and continues in assessing existing Buildings .

This is extended to the full supply chain – sub-contractors, materials used etc. Why is this Important? With buildings being responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU2, Carbon reduction and sustainability in the real estate sector is a big challenge and opportunity. ESG has moved to the top of the agenda in the real estate sector and undoubtedly ESG sustainable investing are at the top of the agenda in the financial industry. The impact on real estate players is significant, ranging from regulatory and tax topics to strategic planning and operational decisions. Is this a risk or opportunity?

There is increasing Legislation and Investor and Customer demand for Sustainability Buildings – These are what are the top drivers

· Innovation needed to bring about change

· Energy, Water & waste Efficiency and Independence

· Sustainable Finance Disclosure Regulation (SFDR) in the real estate industry

· Increasing role of ESG in real estate M&A deals.

· KPIs for the real estate industry

· EU Taxonomy

· Meeting investors’ needs

· Social factors in real estate

· Governance factors in real estate

· Green building certificates & Leases

· Decarbonization of real estate

· ESG benefits all real estate stakeholders

I further urge to look at UN SDGs that are relevant to Real Estate .

Goal 11 gives rise to opportunities in Urban redevelopment, low-cost housing, building refits and more. As an experienced CFO with leading Real Estate players and having spent the last few years looking at ESG, I can equivalently state – that ESG is not only big Opportunity but also will result in your business saving Resources and Money with benefits to yourself and your tenants. Should I start to incorporate ESG in my Business? In an informal review of the Websites and Financial Reporting, many leading International Israel Real Estate Groups have not embraced ESG. There are tremendous opportunities here. Real Estate developers and owners can benefit much from adopting ESG. It does not have to be more expensive, and indeed with better Innovation planning, energy efficiency tools then there is potential for costs savings and business opportunities. Most countries have or are adopting green building Verification Standards, and these relent in the major markets of the US and Europe, Certification goes well beyond saying a home is energy efficient; it provides independent, third-party verification that a home, apartment building, or land development is designed and built to achieve high performance in six key areas: Site Design, Resource Efficiency, Water. So, with doubt the sooner who start to incorporate ESG the better. Where do I start on this ESG Journey?

1. Learn from what Leading Real Estate Players are doing.

Some Examples https://www.aroundtown.de/sustainability

https://growthpoint.co.za/sustainability/ .

2. Energy Efficiency & CO2 Reduction

This goes beyond your own building and energy efficiency. Green buildings and communities reduce landfill waste, enable alternative transportation use and encourage retention and creation of vegetated land areas and roofs. ... All of these strategies significantly reduce the carbon footprint of buildings and occupants beyond what energy efficiency alone does. While your Architect can help address these , it would be a good idea to choose a provider who has deep experience in this sector.

3. Data Extraction , Measurement and Reporting

You can not change what you do not measure. One of the key challenges is data, extraction, measureing and reporting the components to meet these standards.

Real Estate Companies need to start embedding Carbon & ESG Accounting Data into their assets, this is extended to the full supply chain – sub-contractors, materials usage etc. Improving energy efficiency in existing buildings plays a key role in achieving the carbon-neutrality by 2050. Companies will need to adopt a more circular economy approach and adopt Energy efficiency & waste assessments. To this end it is highly desirable to use a Carbon Accounting platform to measure the performance and problem areas. From this base, the use of innovative methods and technologies that produce energy efficiency and effectively extend the life of buildings and/or their components will need to adopt. The underlying starting point is Data, and all-one ESG Platform that covers: - Dara Capture, measurement and Reporting - Energy efficiency,CO2 reduction, co2 reduction - Green Build – Innovation and Verification - Analytics – Tenant , asset , and Portfolio view

Introducing GCX DASH

Based on my many year's experience as CFO, in my search for a solution, I recommend using a 3rd party digital ESG Platform solution. There is only a handful of these providers in the world. Recognizing the need for a digital ESG Platform, ESG3.O has teamed up with GCX— Dash. GCX DASH is a leader in ESG with a speciality in Real Estate, Hotel and Food sectors with a leading-edge data-driven digital platform with ESG monitoring and reporting capabilities. GCX also have a track record of energy savings and waste recycling for their client's Benefits of adopting GCX Dash The adoption of GCX Dash will enable your company to embrace ESG and meet the challenges of data, extraction, and reporting. In both the short and long term, this would prove time and cost-efficient and will pay for itself in cost and energy savings. GCX Dash presents an opportunity for your company to upgrade your ESG story or as a place to start or re-start. We invite you to find out how we can help you in your sustainability journey.

Please feel free to reach out to me by email at Info@upgrading.com or browse my blogs https://upgradingesg.com/, where we cover topics with a focus on ESG Accounting | Carbon Accounting | ESG Measurement | ESG Rating | CO2 Reduction | ESG Reporting