To the point: Indispensable ESG requirements in general and in the real estate sector

To the point: Indispensable ESG requirements in general and in the real estate sector

2 min Lesezeit
Published on: 26. April 2023

A term we read all the time and which often raises question marks: ESG. Therefore, we want to show what is behind these three letters.

ESG stands for Environmental, Social and Governance. It relates to the criteria that investors and companies consider in order to promote sustainable and responsible business practices. These criteria have become more important over the past few years as investors and companies increasingly recognise that sustainability is an essential component of long-term success.

Holistic planning for the perfect ESG strategy in the real estate sector

In the real estate sector, ESG criteria refer to the environmental impact of buildings, the social impact on teams and communities, as well as to how operations are managed by the company that owns or manages the property. To see exactly what the legal requirement means for real estate projects, let us look at the three columns separately.

The environmental criteria refer to the ecological footprint of buildings. This includes energy efficiency, the use of renewable energy, environmentally friendly building materials and the implementation of water management systems. With the help of an intelligent ESG strategy, investors and companies should ensure that buildings are constructed in an eco-friendly way and have as little impact on the environment as possible. This includes, among other things, compliance with environmental standards and regulations.

Social criteria describe the impact of buildings on the communities in which they are located. This includes issues such as access to affordable housing, integration of disadvantaged groups, job creation and investment in local infrastructure. Real estate projects should make a positive social contribution and have a positive long-term impact on the community. In doing so, those responsible can also enlist the support of ESG consultants who have the necessary expertise at all levels of ESG requirements.

It is about the way of how the company that owns or manages the property is run. This includes issues such as corporate governance, transparency, ethics and compliance. Companies that own or manage real estate should be managed ethically and responsibly and adhere to appropriate governance and compliance standards, as required by the EU taxonomy, for example.

Why are ESG criteria important in the real estate sector?

Sustainability is important in every area – just as it is in real estate. For investors and companies in the real estate sector – they promote their long-term, sustainable success – on the one hand in the form of better returns and especially in a valuable contribution to our environment and nature. Investors are increasingly looking for sustainable real estate projects meeting ESG standards. Companies that integrate ESG into their business practices are able to create long-term value for their shareholders by minimising risks and identifying opportunities associated with sustainable business practices.

workcloud24 understands itself as partner to achieve ESG-compliant and sustainable value enhancement. Based on this conviction, the ESG consultancy accompanies investors or tenants on their way to ESG certification.

Did you like the article?

Learn more about ESG compliance?

Enter email and speak with an expert.

More contributions