Creating portfolio impact: Meeting the challenges of compliance and reporting in a rapidly changing digital landscape

In the fourth of a new series of blogs discussing Schneider Electric’s approach to Responsible and Responsive real estate, we talk to Mathilde Petriat of GRESB and Stefano Corbella of Coima about tackling the challenges around compliance

Firms trying to take a responsible and responsive approach to real estate are facing a bewildering panorama of standards and requirements that often change in different geographies and even alter annually. “The fact that much of the industry is playing catch-up when it comes to sustainability in real estate doesn’t help,” says Julian Tharsis, global sustainability reporting, compliance & analytics director, Schneider Electric.

Sustainability is increasingly a compliance issue, not just a matter of staying competitive. So it’s important to get clear on how to measure a building’s performance, and stay on top of the guidance and legislation – Julian Tharsis

As a compliance specialist, Julian knows that the issue can be a less popular aspect of an ESG strategy. “People breathe a collective sigh when compliance comes up, it feels like nagging,” he says. “The term implies duty, it implies work. But there are multiple benefits to facing reality and being on top of it.”

Mathilde Petriat, chief customer success officer of benchmarking firm GRESB, says that GRESB was born out of a desire to “define a common language to assess sustainability issues and bring transparency to the markets”. She adds: “This reporting can obviously be a burden, sometimes, but reporting can also be a great tool to really engage between investors and managers.

We see especially in the very challenging markets, that access to capital for instance is easier for those who have a lot of transparency around their sustainability strategies – Mathilde Petriat

“So we really believe that we are an actor of change in the way that we can promote what’s really happening in a very standardised, harmonised way, and a very accessible way to investors.”

Adds Julian: “With programmes such as GRESB, the important thing at first is just to take part. You don’t have to be at the highest level, but only once you start can you understand your strengths and weaknesses and make improvements.”  He notes: “Your first report might not look great, but having the information about how to grow, which data needs to be better, is vital.”

Stefano Corbella, sustainability officer of Italian real estate firm Coima adds a landlord’s perspective. “The data parameters are growing fast across the E, the S and the G. It isn’t really a level playing field, and data collection can be very fragmented and at times, difficult to access. For example, as a landlord, we have full access to own consumption figures, but we have to ask the tenant for their data.  Maybe in the future we will be able to collect that information without continually asking, but until then, it’s a challenge. Other EPC data is also affected by access issues, or building age.”

If we provide an efficiently managed building that will save money, tenants will stay in the building much longer compared to other properties – Stefano Corbella

Once the data has been acquired, other issues emerge around data analysis, Stefano notes. “There is no common quantity of data that is collected, so you have to dedicate some resources to that if you want to completely understand what is happening in your property and drive efficiency across your portfolio,” he remarks.

Last year, energy price spikes in Europe led to lots of conversations with tenants about their bills going up five-fold. Then attention around energy consumption increased a lot. We found ourselves going through the data with tenants, and sharing actions to improve efficiencies.” This kind of approach benefits both landlord and occupier, Stefano says. “If we provide an efficiently managed building that will save money, tenants will stay in the building much longer compared to other properties. Our strategy therefore involves putting ourselves at the forefront of managing buildings in a very efficient and professional way.”

Mathilde is sympathetic to the challenges facing landlords today. “For GRESB, it is different as we simply get the data reported to us. But we see the challenges that participants face in getting hold of this data,” she notes. However, as the data recipient, GRESB has developed ways to share good practices, such as “those who have installed smart meters, who have building management systems in place, which can really help track data live, and simplify tasks rather than filling in spreadsheets by hand”. Furthermore, she notes that “those who have an API connection directly to the GRESB platform see the data stream truly automated which is a huge win for them.”

These kinds of efficiencies encourage greater adoption and in turn, improvements, she concludes. “We want people to spend more time analysing the data, in order to take action, than on collecting it.

“At GRESB we are actively working on building new dashboards and insights based on the vast amount of data that we have, to provide market participants with actionable insights for improving the quality of their portfolios.”

Adds Julian: “Having the right technology to facilitate these processes is crucial. We are here to help our customers spend less time collecting and reporting data and more time taking action. We are constantly striving to improve that data flow.”

AI is the new topic of debate with the industry weighing up its pros and cons – Stefano Corbella

In terms of future technology, although real estate owners already have many efficient tools at their disposal, interest remains in what might come next. Says Stefano:  “AI is the new topic of debate with the industry weighing up its pros and cons. We are testing it out in some properties, aligning it with the building management systems we have to help automatically analyse data.”

Stefano thinks that AI “will not replace but support other technological systems” in the long run. He adds: “Correlating data with financial outcomes is what makes it valuable. There are learning curves everywhere but I believe that this will be the focus of the next 5-10 years to really drive the industry forward.” He compares the automotive industry, which has been “going through digitalisation process much faster than the construction industry, for example”.

For Mathilde, the next frontier for compliance will be the speed of regulatory change. “The Energy Performance of Buildings Directive might enforce a common digital database where you have the energy consumption of everybody in the building. That would really help streamline this process.” She adds: “Sometimes we lack this regulatory push to make sure that everyone feels that they have to do it. That would really help managers so they don’t have to run after tenants.”

Adds Stefano: “Regulation can be a positive thing – the EU taxonomy made a difference. These kinds of common goals help us to have useful conversations with our investors about using capital to drive sustainability and future proof their investments.”


Schneider Electric: Enabling Responsible and Responsive Real Estate

The real estate sector faces the urgent challenge of minimising its carbon footprint to comply with government regulations, reduce operational costs, and satisfy the evolving needs of occupants and stakeholders. Download our eGuide to explore how our solutions deliver real impact for our customers across key focus areas: sustainability acceleration, energy management, asset performance and operations, user experience and portfolio strategy. Find out more about Schneider Electric here.


About Author

Isobel Lee is a real estate reporter and editor, with regular contributions to PropertyEU, the Wall Street Journal and MIPIM's official publications. Based in Rome, Italy, she is also a food and travel writer.

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