If your property has a high ESG Score, it will Be 7-10% more valuable and be more attractive to lenders, tenants & purchasers
What is ESG?
… And Why Should You Care as a South Florida Commercial Building Owner?
- Environmental
- Social
- Governance
You can see a breakdown of the topics for each of the major components in the figure below:
First, a few facts:
- 50%+ of all annual carbon emissions come from either the operation of commercial buildings or, their construction
- 292% more sustainability-based loans were issued to purchasers in 2021 over 2020
- +7% is the average increase in value of a commercial building with a High ESG Score
Now, let’s dig into each of those three letters:
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The Environment
Buildings Generate Almost 50% of Annual CO2 Emissions
Both commercial and residential buildings have a massive impact on the environment in a variety of ways including reduction of biodiversity and sharply increased carbon emissions (pollution). Here are specific examples of what I am talking about:
- Commercial Buildings with Poor Energy Efficiency (usually to outdated equipment: HVAC, furnaces, etc.)
- Constructions Logistics & Materials, & Materials Transport (Semis, Dump Trucks, Cement Trucks, Crane Operation, Unsustainable Building Materials, etc.)
- Improper Waste Management
- Over-Reliance on Plastics
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Social Impact
The Social component of ESG is most concerned with providing for and/or the enhancement of Wellness initiatives in three ways:
- Physical: Nourishing a healthy body through exercise, nutrition, sleep, etc.
- Mental: Engaging the world through learning, problem-solving, creativity, etc.
- Social: Connecting and engaging with others and our communities in meaningful ways.
This informs architects and builders on how to design spaces that encourage physical fitness & outdoor activities as well as thoughtfully designed interior production spaces that can be both private (when needed) and collaborative/inclusive.
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Governance (Management) of Your Tenants Matter
Since March 2020 (Start of COVID), ESG-Related Discussions & Reporting at Board Meetings Has More Than Doubled.
- Board Composition
- Shareholder Rights
- Accounting Transparency
- Separation of Chairman & CEO Roles
So what does Governance have to do with Commercial Real Estate?”.
Good Question.
ESG, first and foremost, is a decision and management framework. A prospective tenant may want to know that the Landlord’s company adheres to ESG if it is a larger corporation. Conversely, Landlords may use elements of the Governance framework to assess the quality and risk level of prospective tenants beyond their financials.
Getting An ESG Score for Your Building
To get an ESG Score for your South Florida Commercial Building we will have to come onsite to inspect your building and collect some information from you. Once all of that is done, we provide you with an ESG score and remediation plan to increase the score if necessary. If those remediations are made, we will rescore the property at no additional charge. Our evaluation will primarily focus on the Environmental & Social elements of ESG as it relates to your South Florida Commercial Building.
For More Information or to Schedule an ESG Building Inspection Call
561.810.3537
