How can PropTech help with the ‘S’ and ‘G’ in ESG?

Unless you’ve been living under a rock for the past couple of years, you’ve probably noticed that everyone is talking more and more about ESG. 

ESG stands for environmental, social and governance, and these criteria are pivotal to the way today’s businesses operate. It’s all about a company’s business model and how its products and services contribute to sustainable development.

With increasing action from governments, companies and investors, it’s a complete no-brainer to start focusing on ESG sooner rather than later.

How can PropTech help with ESG?

People are definitely starting to realise how important PropTech is when it comes to ESG. We’re seeing that smart technology can not only help with ESG data collection and reporting, but can improve ESG performance across the board.

I’ve noticed that there is plenty of stuff out there about the ‘E’ element, and rightly so – PropTech can be hugely valuable when it comes to improving energy efficiency in buildings. However, there tends to be less of a focus on the ‘S’ and ‘G’, so this article highlights how PropTech can help with these factors too. 

How can PropTech help with the ‘S’ in ESG?

The ‘S’ in ESG often tends to be neglected – probably because social aspects tend to be much harder to define and measure. Luckily, indoor air quality monitoring has emerged as an easily quantifiable step to optimise employee health, wellbeing and productivity. 

Using IoT sensors, companies can monitor key parameters, like temperature, humidity, CO₂, TVOCs and PM2.5. Smart alerts can be used to notify you when these factors exceed optimal levels, and automatic changes can often be made via a Building Management System (BMS).

Instead of making unsubstantiated claims about improving employee wellbeing, companies can get the data they need to prove they are actually doing something meaningful to help their employees.

How can PropTech help with the ‘G’ in ESG?

Before I explain how PropTech can help, I think it makes sense to give a quick overview of what the ‘G’ in ESG actually is. 

It’s all about understanding how a company is governed – how it makes its decisions, how its board of directors is established, operates and is remunerated, how it manages risks, how it deals with shareholder’s rights – the list goes on. 

There are no two ways about it: to achieve good corporate governance, you need good data. 

And what is absolutely key is that this data can be made readily available to all shareholders and stakeholders. In the world of governance, transparency, disclosure of information, and accountability are all incredibly important. 

PropTech gives companies access to high quality data about a huge range of factors, and a smart building platform allows this to be presented in a way that is simple to understand, and easy to interpret and make decisions from.

The right platform can also help to break down dreaded data silos and bring data from different systems into one place. This is a great way to create more streamlined and collaborative processes, and ensure that records are transparent and accessible.

One of the biggest challenges with ESG reporting is collecting good quality data – PropTech solves this by providing a cost-effective way to collect, aggregate and display data.

How can PropTech help with the ‘E’ in ESG?

Although the main purpose of this article is to show how PropTech can help with social and governance factors, it wouldn’t feel right to pass on the opportunity to highlight why smart tech is so great when it comes to the ‘E’ in ESG.

Companies need to focus on improving their energy efficiency, especially with the introduction of regulations like Streamlined Energy and Carbon Reporting (SECR).

Smart technology can monitor performance, detect inefficiencies and make automatic adjustments via a BMS. It’s a quick, easy, and cost-effective way to reduce consumption and meet your targets.

Where things get really clever is when you have a software platform to bring all of this data into a single place so that you can track performance. This makes it easy to see if targets are being hit, or if steps need to be taken to improve efficiency.

PropTech and ESG: the future

In the coming years, I think we will see ESG becoming a key driver of PropTech adoption. More and more companies will be looking for a way to collect and measure ESG metrics, and there will be a huge need to improve ESG performance.

PropTech and ESG go hand in hand, and they will both continue to rise on the agenda for investors and companies alike.

For anyone interested in learning more, I’d thoroughly recommend our PropTech Guide to ESG: it’s hefty, and very insightful.