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How to accelerate ESG progress in commercial real estate

by Ana Lopez
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Paul Scialla, founder and CEO of Delos. Paul is an expert in the field of indoor environmental quality and healthy buildings.

Discussions about the impact of environmental, social and governance initiatives often focus on the desired benefits of environmental sustainability. If we are serious about delivering direct benefits to people and improving human sustainability – the “S” or social category in ESG – we need to look within.

The link between indoor air quality and human health and well-being is well established, and evidence of that link continues to grow. Logical, because it is often said that many Americans spend money about 90% of their time indoors, and indoor air quality can be up to five times worse than the air outside.

The benefits of improving the overall quality of the indoor environment (known as “IEQ”) go far beyond the positive effects of cleaner air. Thermal comfort, circadian lighting, noise reduction, water quality and biophilic design are also possible influence health, cognitive function, productivity and well-being – key factors contributing to employee satisfaction.

As the ESG landscape and the post-pandemic workplace continue to evolve, investing in human sustainability is not just the right thing to do; it is increasingly becoming a business requirement. Creating work environments that support human health and well-being can help combat burnout, increase productivity, and recruit and retain talented employeesa company’s most valuable asset.

Furthermore, one Survey 2022 of more than 5,000 employees and job seekers commissioned by employment agency Indeed provided a good indication of how attitudes towards work have changed since the pandemic. Forty-six percent of respondents said their expectations for happiness in the workplace have increased over the past year. The survey also found much more loyalty among employees who reported higher levels of well-being in their current job. In fact, 87% of respondents who were satisfied with their well-being in the workplace said they would likely stay with their employer for at least another year, while only 16% of employees with low levels of well-being reported that level of satisfaction. loyalty. This shift in employee expectations coincides with higher ESG expectations among employers, investors and the public.

These aligned trends have implications for both commercial real estate and major employers.

Building owners can heed the call to action by creating healthier buildings. By doing so, they could see a significant return on their investment. In response to one questionnaire conducted by Dodge Data & Analytics in 2016, more than 70% of building owners said their investments in healthier buildings improved their ability to rent the property, and 79% said healthier buildings positively impact satisfaction and engagement of employees. More than 60% said the investments increased the overall value of the building.

An essential step to improve people’s indoor well-being is to collect data on IEQ factors such as temperature, occupancy, ambient noise and air quality. This data can provide valuable information to guide improvements and help improve efficiency.

A future-oriented Article from 2018 published in the scientific journal Sustainability defined smart real estate as “a property or land that uses various electronic sensors to collect and provide data to consumers, agents and property managers that can be used to efficiently manage assets and resources.”

It is a good definition and the technology to collect and deliver data is advancing rapidly. Many newly constructed commercial buildings contain state-of-the-art sensors that measure a wide range of factors related to health, well-being and energy consumption. Unfortunately, I’ve found that building owners and operators of older buildings are often reluctant to use this type of information to improve indoor air quality because of the cost and disruption associated with large-scale upgrades. For example, older buildings may need an entirely new HVAC system to improve air quality.

New technologies are one element that can help solve this problem. Owners may consider using smaller, local air purifiers that limit the scale of necessary HVAC upgrades. (Full disclosure: My company offers this kind of solution just like others.) Room owners and operators can also take other simple steps to increase employee comfort and satisfaction, such as making temperature data accessible so employees can dress accordingly for their comfort level or clearly defining quiet and collaborative zones in the office so that employees can choose a space that best suits their work needs.

Technological developments, when they occur, and better IEQ transparency for employees can benefit the environment and represent a major step forward for the “S” in ESG.

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