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Sustainability & ESG

Sustainable Performance of Real Estate Portfolios

ESG requirements, EU-taxonomy, decarbonization and supply uncertainty: the call for a sustainable real estate portfolio challenges real estate management. We help you identify opportunities and challenges, and design and implement strategy to create a sustainable real estate portfolio that supports your long-term success and meets regional ESG requirements.

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A Changing Real Estate Landscape

Transformation pressure in Real Estate Management is on the rise

Rapid changes in socio-economic, legal, and financial frameworks are challenging organizations to adapt. In response, society, politics, individuals, and institutions are increasingly demanding comprehensive management practices that address environmental, social, and corporate governance (ESG) concerns.

The market is heavily impacted by issues such as climate change, energy policy, and extreme weather conditions. To stay competitive, companies and their portfolios must demonstrate resilience by implementing sustainable solutions.

As real estate experts, we closely observe these changes in the market and society, understand the growing pressure on real estate to become more sustainable, and are well-versed in the increasing regulatory requirements.

Experience and knowledge form the basis for our consulting services.

Daniela Toscani
Manager

„Incorporating sustainability into business strategy is non-negotiable in today’s world. Understanding that asset performance and actions along the entire value chain are linked to the goals of environmental, social and corporate sustainability is crucial for the successful implementation of ESG in its entirety.“

Sustainability is becoming a key success factor in entrepreneurial activities

Sustainability has become an increasingly pressing issue, as the current geopolitical situation highlights the ongoing importance of sustainability in the future. The real estate industry has yet to take a leading role in developing and implementing sustainable solutions, but it has the potential to make a significant impact towards achieving the goals set in the Paris Agreement on climate change.

Current Trends to Catch Up With:

Emphasizing Renewable Energies and Energy Independence

Investing in renewable energy sources and energy independence can lead to cost savings and reduced carbon emissions, while also promoting market and supplier autonomy.

Adopting a Circular Economy and Life Cycle Thinking

Instead of resource-intensive construction, the real estate industry should focus on repurposing and recycling existing materials and structures, and considering the entire life cycle of a building.

Prioritizing Biodiversity and Water Conservation

Ensuring the preservation of natural resources and biodiversity is an essential aspect of ecological sustainability strategies in real estate management.

Incorporating Climate Risk Management

Changes in weather patterns, impending rental bans or redevelopment constraints present financial risks that must be identified, assessed and effectively managed.

Focusing on the Needs of People

Real estate management must adapt to the changing needs of its users, including hybrid working, enhanced space quality, multifunctional areas, and user-oriented amenities.

Investing in Impact

Growing demand for sustainable and socially responsible products calls for new business models that prioritize the creation of positive social and environmental impact.

Enhancing Transparency through Digitalization

New reporting requirements and the need to disclose ESG-relevant key figures require accurate management and transparency of ESG data through the use of digital tools and platforms.

Keeping up with Compliance and Regulation

Increasing requirements from EU regulations, compliance, governance, and customer expectations are changing the scope of management tasks and require organizations to stay up-to-date with the latest regulations and compliance standards.

Learn more about sustainability in Real Estate:

Real Estate has a Special Duty

Enabling Transformation

As one of the largest contributors to emissions in comparison to other sectors, the real estate industry has a significant responsibility to take action on environmental sustainability (E).

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Real estate must actively work towards achieving corporate social responsibility goals and taking social responsibility for the transformation process for both the industry and its users.

Sustainable real estate management is a pressing issue for corporate real estate managers, institutional investors, and operators alike. In this context, both users and the real estate industry are presented with challenges, but also clear opportunities to establish themselves as leaders in sustainability and corporate responsibility.

Real estate must contribute significant value to ESG target achievements

CREM as a catalyst for sustainable portfolio transformation

The current landscape of the real estate industry, shaped by factors such as the pandemic and climate risks, highlights the limitations of traditional corporate real estate management roles as mere providers and operators of space.

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To stay competitive and meet the changing needs of the industry, CREM must take on a more active role in driving sustainable transformation within the organization. This includes the ability to navigate, lead, and optimize the real estate portfolio to be more adaptable and responsive to changes in the market.

By embracing this new approach, CREM can become a strategic partner in the C-suite, acting as a catalyst for sustainable change in the portfolio, influencing cultural change within the company, shaping the implementation of corporate strategy, and positioning the company for long-term success in a rapidly changing market.

Value Creation in the Real Estate Industry

Make Sustainability a Competitive Advantage

The holistic incorporation of sustainability and environmental, social, and governance (ESG) factors will be a key differentiator in the real estate industry, both now and in the future.

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Sustainability and ESG criteria will play a crucial role in determining value and securing returns for real estate investors and stakeholders.

To achieve a competitive advantage, it is essential to integrate relevant ESG factors throughout the entire value chain, from market research to product development and property management, and to provide transparent reporting. This means not only considering ESG at a strategic level but also the product and operational level. Additionally, incorporating support and management processes, implementing IT and risk management systems, and raising employee awareness and involvement are important factors in achieving a sustainable and competitive real estate business. By making ESG a central part of the business strategy, real estate companies can create long-term value and stay ahead of the curve.

Real Estate Management of the Future

Managing the Risks of the Stakeholders

A (pro)active approach to managing corporate risks can be achieved by incorporating sustainability in a company’s DNA, its core values and practices.

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We differentiate between:

  • How can we identify physical risks early on and implement effective countermeasures?
  • What tools can we use to mitigate transitory risks?

Advancing and Future-Proofing through ESG

From Shareholder Value to Stakeholder Value

The transition from traditional shareholder value to sustainable stakeholder value is gaining momentum through the integration of ESG considerations, and must be embraced and actively implemented by market players.

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This new multidimensional approach, which differs from the previous focus on maximizing efficiency and profits, necessitates a change in mindset among all involved and represents a cultural shift. It must be supported by comprehensive measures beyond implementation in order to effectively realize ESG in practice. This includes a commitment to transparency, effective governance, and stakeholder engagement. By prioritizing stakeholder value, companies can create long-term value for all stakeholders, including shareholders, employees, customers, and communities. This approach will ultimately lead to a more sustainable and resilient business.

Professionally Shaping the Sustainability Transformation Process

As a strategy consultancy, we leverage our extensive knowledge of the market and products to help you fully embrace sustainability and ESG factors, and take the necessary steps to become a leader in this area.

As a Minimum Viable Product, we will work with you to:

From Strategy to Operational Results

TME Transformation Management Experts offer comprehensive consulting solutions that drive results. We specialize in guiding clients from strategic planning to operational success, enabling transformations through a targeted focus on value-creating changes.

SUSTAINABILITY STRATEGY Strategic Positioning Sustainability Assessment, maturitymodel & frameworks Sustainability Strategy Sustainable Fonds- &Product Strategy STRUCTURE Future Proof Solutions Organizational Integration Governance Models & KPIs Target Operating Model IMPLEMENTATION Measurable Results Global Roadmap &Implementation Measures Digitalization & Tools ESG Data Model & Reportings Change Management Sustainable Investments OPERATIONAL SUPPORT End-to-End Solutions Smart Solutions |Steering Instruments Interim-Management &Program-Management Energy Procurement Managed Services Smart Metering

Further Fields of Competence

Our Sustainability team closely collaborates with our experts in other fields of competence to provide a holistic perspective:

Investment Advisory

Investment Strategy, Manager and Product selection, and Compliance Requirements

Portfolio Transformation

Sustainable Portfolio and Workplace Strategies

Performance & Agility

Organizational Integration, Governance Models, Target Operating Model, Change Management

Customer Centric Services

Decarbonization Concepts in Operations, ESG Implementation in Facility and Property Management

Digitalization

Digitalization Strategy, Data Governance, Master Data Management

Our value to your organization