There’s no doubt that companies in the built environment have woken up to the importance of ESG, mobilising resources accordingly, and addressing a range of issues and themes within their sustainability strategies. Even so, sustainability strategies can range significantly in breadth and depth of coverage and there are some common inconsistencies and misconceptions. To avoid such inconsistencies, make genuine sustainability progress and avoid greenwash, there’s a need to encompass all stages of the strategy lifecycle.

In terms of breadth of sustainability strategy coverage, we are already well aware that not all ESG topics have been treated with equal importance. Carbon has historically been prioritised, owing to the widely understood significance of addressing emissions to combat the climate crisis. However, this is slowly changing, with clients showing an increasing interest in other topics such as social value, climate adaptation, diversity, equity and inclusion, and water consumption.

The target-initiative connection

In contrast, there are still inconsistencies in the depth of companies’ sustainability strategies, and this is just as important to address if we are to prevent greenwash. A common way that this manifests is via companies possessing a range of good quality targets, but very few initiatives, sub-targets and roadmaps that directly address these targets. For example, a company might aim to be net-zero by 2040, yet they give no indication of how to get there. In this case, it would be important to develop specific initiatives that address the target. This could be an objective to procure a proportion of renewable energy or a commitment to have assets with EPC ratings of B or higher. To help develop the feasibility of the target, the company might also want to establish sub-targets, like reaching a 50 per cent reduction in emissions by 2030.

Another way that inconsistencies can arise is when a company has a broad range of initiatives, but very little sense of where they’re leading in terms of a long-term target. For example, a company might be conducting water efficiency audits across all assets; they might even be looking to implement efficiency features like low-flow taps or leak detection systems. However, without a holistic target for water consumption reduction, it’s hard to know what the initiatives are working towards. This kind of strategy risks being considered a ‘scattergun’ approach, therefore having clear tangible targets is vital.

Knitting targets and initiatives together - the importance of reporting and transparency  

As sustainability literacy increases, people and organisations alike are demanding new levels of robustness to sustainability strategies; that’s where data comes in. To justify how implementations and initiatives are addressing these long-term targets, we need concrete evidence of progress and this comes from reliable data. If, after a year of improvements, an organisation’s monthly utilities consumption data shows that CO2 emissions have reduced, they can be confident their implementations are sufficiently addressing their wider target.

In summary, it's important to conduct both the early and intermediate stages of strategy development and ESG integration. Reporting is an equally important element of your strategy as it helps connect wider targets to implementations. Targets, together with relevant initiatives backed by robust data, will produce positive results.

Further information

Contact Will Chantry

The role of high-quality real estate data in an ESG strategy