ESG strategy - real estate development fund

 

how to create a real estate esg plan for real estate developers and investment funds

sustainable real estate development biofilico consultants

PHASE 1 / REAL ESTATE SUSTAINABILITY INVESTOR PACK (SIP)

Objective - Deliver an investor pack detailing the company’s existing sustainability credentials, how the business will limit its environmental impact going forward and promote human health both internally in its factories and in its modular properties.

This phase is about capacity building and setting a baseline for the work to follow in Phases 2 and 3. It is both a snapshot of the business’s existing sustainability credentials and a statement of intent for what is to come.

Key activities -

  • Internal stakeholder soundings: over the first two weeks we will e-meet with relevant stakeholders within the company to take stock of the current sustainability context and evaluate opportunities for future strategies, this will also lead into building the supply chain map

  • Environmental decision making: creation of a Sustainability task force, appointment of a senior Sustainability decision maker and consideration for personnel Sustainability incentives to foster a company culture of sustainability

  • Environmental policy development: a strategic document that outlines your environmental principles, priorities and objectives over the short (Phase 2), medium (Phase 3) and long-term. To align with GRESB best practices this SIP will consider the following: biodiversity, climate change, energy consumption, Greenhouse Gas Emissions, Indoor Environmental Quality (IEQ), material sourcing, pollution prevention, renewable energy, resilience, sustainable procurement, water consumption, waste management, the sustainable workplace and other CSR activities. 

  • Making the sustainability case for this particular business model: a robust business case for why this particular business model comes with distinct sustainability credentials, as well as what metrics can be used to quantify the future impact and value created by the company in this regard. 

  • Sustainable supply chain material map: a blueprint for further due diligence and opportunities to introduce sustainable building materials while maintaining existing quality / price expectations, including LifeCycle Assessment (raw material production, transportation, in-use, end of life). The resource will include a material map, proposed supplier compliance standards aligned to industry frameworks, identification of supplier engagement opportunities to enhance environmental and social impact. A map of raw material suppliers’ GHG emissions estimates (Scope 3 emissions = value chain impact). NB: this work will be further refined in Phase 2.

  • Product design enhancements: having reviewed your current modular product, we will make an initial set of recommendations for alignment with sustainability best practices, e.g. USGBC LEED Multifamily

  • Environmental baseline & capacity building: establish a baseline for measurement once the company is operational (factory and construction site), building the capacity and processes for capturing the environmental impact in Phase 2.

PHASE 2 / REAL ESTATE SUSTAINABILITY PLAN ROLL-OUT 



Objective - Implement and iterate the environmental policy laid out in Phase 1, establishing the company’s environmental responsibility program to conserve natural resources and reduce waste while promoting planetary and human health at each stage of the design, manufacturing and construction cycle. Begin initial tracking of operations.

KPIs - Carbon footprint reduction; embodied carbon reduction; energy reduction; water reduction; waste reduction; renewable energy use (?), sustainable supply chain enhancements, product design enhancements

Key activities -

  • Stakeholder engagement: Connect with facilities management, architecture, design and MEP teams, construction team, external suppliers

  • Energy, water and waste efficiency: Ongoing data collection, this would include office metering, factory metering and construction site metering, as applicable during this 6-month phase, leading to efficiency measures in line with USGBC LEED green building guidelines

  • Carbon footprint & embodied carbon: Map Scope 1 and 2 emissions for the manufacturing facility energy / water / waste consumption once operational, review machinery efficiency certifications, then implement an initial range of embodied carbon reduction measures (focused on the dominant construction materials in the case of embodied carbon), evaluate carbon offset options for other emissions. Identification & tracking of GHG (Scope 1 & 2) operations via energy bills, property, transportation fuel, machinery/equipment

  • Sustainable Supply Chain Materials: Life Cycle Assessments of materials with greatest impact, research into alternative building materials; evolution of a sourcing and procurement plan that prioritizes proximity and minimal environmental impact (with due consideration for quality and price expectations) - please note there is the opportunity to build upon this Environmental-oriented work with additional Social / human wellbeing and Governance / policy criteria here (for example in an eventual Phase 3, if appropriate) 

  • Product design enhancements: Ongoing proposals for environmentally-friendly design features in line with USGBC LEED guidelines that will enhance the sustainability credentials of MLS and each of its development projects

  • Sustainability management software: In the second half of Phase 2, there may be sufficient data pulling through each month to warrant a sustainable data management software subscription, initially we plan to manually collate GHG data, for ongoing data management efficiency however we would recommend evaluating / testing a software solution such as Planetly or Sustain.Life, for this allow approx. US$1k per month

environmental policy in esg real estate

Objective - effectively managing the company’s environmental responsibility, conserving resources and reducing waste while continuing to deliver the highest-quality sustainable products to customers 

KPIs - carbon footprint reduction; embodied carbon reduction;; energy / water / waste reduction; renewable energy use; # of homes built with a certified HERS® Index Score; % of installed water fixtures certified to WaterSense® specifications; # of homes delivered certified to a third-party multi-attribute green building standard

Key activities 

social policy in esg real estate

Objective - creating a diverse, inclusive and safe workplace that empowers employees to deliver the best results for our customers. Increasing access to high-quality, affordable sustainable homes . Leveraging the company’s talent and resources to support social impact and community development work. 

KPIs - workforce demographics, Total recordable incident rate (TRIR) and fatality rate, employee satisfaction, $ invested in social impact, # of volunteer hours, # of beneficiaries of social impact work, # of homes sold to qualified low-income customers, average # of training hours completed, # of employees trained  

Key activities 

  • Human capital management strategy - Diversity, Equity & Inclusion,  talent acquisition, career development & training, employee engagement & recognition 

  • Health & safety strategy - education, training and auditing, including Indoor Environmental Quality (IEQ)

  • Social impact strategy - partner selection, impact measurement, employee volunteering, corporate giving,  examples: partnership with Habitat for Humanity provide products + employee volunteering; special financing for low-income qualified customers 

  • Employee engagement survey 

  • Stakeholder engagement - materiality assessments, impact assessments, stakeholder consultations and discussions 

  • Building Certifications -  e.g. WELL / FITWEL / RESET AIR (each costed separately)

  • ESG management software - e.g.Brightest Platform - impact measurement, stakeholder engagement, volunteering, supply chain environmental management (approx. Us $6k per annum)


governance policy in esg real estate

Objective -  promoting the highest standards of transparency, integrity, and trustworthiness while maintaining a culture of ethics

KPIs - # of employees trained on ethics, # of security breaches, total diverse supplier spend, total hours of training provided to suppliers 

Key activities 

  • Policy development - corporate governance guidelines, code of conduct, supplier code of conduct, data privacy and security, procurement strategy 

  • Enterprise risk management program - include climate risk associated with the business 

  • Responsible supply chain management program - supplier conduct, ESG requirements, supplier diversity, auditing, sustainable material sourcing 

  • Compliance training and monitoring 

  • Data privacy and cybersecurity - customer data protection 

  • Reporting to stakeholders - annual report, ESG report (GRI US$6k, SASB, TCFD-aligned), GRESB benchmarking (costed separately)

  • ESG management software - Workiva for compliance reporting and policies (US $1k / annum per user)

 
ESGMatt Morley