ESG key investor concern for fund managers and investors in the Australian property sector

Environmental, Social, and Governance (ESG) is now a major boardroom topic for fund managers and investors in the property sector. Shopping centres, airports, museums and office complexes have always understood the importance of these three important obligations. But they have moved beyond important to critical measures of a building’s performance.

Investors in these properties are acting swiftly to either halt their investments or completely withdraw if building managers and owners do not ensure that they manage these large, valuable assets responsibly and address environmental, social, and sustainability governance.

But managing large buildings is incredibly challenging. The key to overcoming those challenges is data-driven collaboration.

Green energy not enough

Ten years ago property owners countered the inefficiencies and environmental costs of building operations by purchasing carbon offsets or purchasing ‘green energy’. Fund managers are now demanding a more proactive approach.

The purchase of green energy or other types of offsets, while commendable, does not solve the problems of energy wastage. Investors are now demanding that building owners do much more to help the Australian property sector reach zero net emissions. Rather than purchasing green energy or some other type of offset, the expectation is that owners take responsibility for the energy they actually consume.

That means understanding what plant and equipment is using energy and understanding whether that equipment can be optimised to run more efficiently or if a business case can be made to replace the equipment.

Collaboration is the key

The plant and equipment used to run a building is incredibly complex. In most cases, the data needed to understand whether a piece of equipment is running well or poorly is difficult, or even impossible, to access. Typically, the information needed to detect a problem, assess it and then plan and execute a remediation plan requires a combination of on-site observation and intuition.

But the plant in a large building - everything from chiller units through to the motors required for an elevator - is a rich source of data. The problem, until recently, has been that the data is difficult to acquire, analyse and normalise.

Fund managers need a helicopter view of how their entire portfolio of properties is operating and for their team to be able to drill down when an issue occurs to identify the root cause. That information can then be conveyed to the right technician who can easily share information with other experts to ensure the problem is rectified in the most efficient and effective way possible.

Early adopters reap the benefits

When businesses such as GPT Retail, QIC Global Real Estate and Charter Hall installed the CIM PEAK Platform, they saw immediate benefits. Equipment that was not running at its best was identified through the PEAK Platform with the fault sent directly, from PEAK, to the service technician.

The technician, once on site, took photographs and collected data and easily shared that with other technicians or staff that were needed to resolve the issue.

The fund manager could then easily see that energy consumption is optimised, negating the need to purchase offsets and reducing the overall operating cost for the property.

Quantifiable benefits - not guesswork

When QIC Global Real Estate deployed the PEAK Platform at Eastland Shopping Centre, it was able to reduce power use by over 15% with no additional capital or operational expenditure. For a fund manager, this improves the return on investment substantially and fulfils ESG obligations.

The GPT Group was able to reduce its energy consumption by almost 9% by using PEAK to find and action inefficiencies across a portfolio of properties. That translates into significant cost savings and minimise the need to purchase offsets or green energy.

PEAK gives fund managers greater oversight on the operation of their investment as well as reducing the environmental footprint of the building and delivering a higher degree of tenant and customer comfort.

Buildings are large and complex. Managing them without timely and accurate data becomes an exercise in guesswork and intuition. The PEAK Platform gives fund managers the tools they need to see what is really going on so they can identify faults and opportunities to optimise operations.

This enables teams that report to the fund manager to allocate tasks to the right person faster and allows teams to collaborate from a common set of easily shared data. Instead of needing to offset wasted energy use by purchasing green energy and through carbon credits and rebates, actual energy consumption is reduced.

For more information on how the PEAK Platform works, click here to get in contact with one of our experts.