In every Board meeting, analyst call, shareholder meeting, etc. ESG policy (Environmental, Social and Governance) is a major topic. Not only are all direct stakeholders concerned – customers, employees, suppliers – but now corporate governance and regulatory authorities are demanding measurable action. Starting in 2023, the European Union plans to issue fines for failure to show progress to “net zero”. In the United States, federal and state governments as well as the large shareholder proxy firms are developing more rigorous ESG standards, inspections, and penalties.
There is one immediate, measurable action every Board can take to demonstrate both commitment and progress against ESG goals: reduce carbon footprint and improve environmental safety of existing company real estate – offices, factories, medical care, and retail/distribution sites.
Consider these facts:
It’s a huge, low hanging opportunity to make ESG progress
The solution – capture, analyze, act on existing data
Sure, you can ask employees to just turn off the lights. But ESG policy goes well beyond the electricity bill – it requires programs that encompass water, gas, air quality, building security, mobile asset tracking, etc. Does this require major capital investments to upgrade and retrofit buildings? ABSOLUTELY NOT!
The “hidden asset” across all your commercial real estate properties is DATA. Every building a company owns, or leases has HVAC, lighting, lifts, security, and increasingly bio-safety monitoring equipment. Over the past 10-15 years, all this installed equipment has become “data enabled” by vendors to monitor equipment performance and drive maintenance. In a typical office building, there are 1000s of environmental equipment data points produce every 5 minutes. In a hospital, for example, there could be over 100,000 data points being produced every 5 minutes.
The secret is to capture, analyze, and act on this data to reduce carbon footprint – building by building across your entire real estate portfolio. Today’s combination of IoT (Internet of Things) chips and data analytics technology (cloud processing, Ai, machine learning) makes this a lot easier and actionable than ever before. Now, with very little capital investment and in a matter of months, leadership teams can get:
This ESG technology is not pie-in-the-sky; it’s here today.
3 Questions Boards should be asked of their Leadership Teams
I suggest CEOs and the Boards start by asking these simple questions:
Entire companies and industries are rallying around ESG goals; it is time that we applied the latest technology to create not just a sense of urgency but also a cost efficient, measurable approach to environmental management.
Integrated Smart Solutions, LLC — DBA KTERIO
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