Sustainability, energy, and climate change are some of the most relevant topics that are not only increasingly becoming the main topic of many debates across industries but are also leading to the development of effective strategies. But what exactly does sustainability mean? While in everyday language we associate the term primarily with longevity and environmental protection, "sustainable development" refers to an intact environment, the preservation of biological diversity, low consumption of resources, a high quality of life for people, and, above all, a reduction in CO2 emissions. In the field of securities trading, the term “sustainable capital investment” is heard more and more often together with the ESG criteria. But what exactly are the so-called ESG criteria and what do they say? Or how do they relate to sustainability?
How to master the "Renovation Wave" for a better tomorrow?
At the end of 2020, the European Commission unveiled its ambitious proposals as part of a "renovation wave", clearly demonstrating the importance of urgently addressing sustainability gaps in existing buildings. The European Commission also reported some very significant facts:
- 85% of buildings in the EU were built over 20 years ago, and 85-95% are expected to still be standing in 2050.
- By 2030, 35 million buildings could be renovated and up to 160,000 additional job places should be created.
- The European Commission aims to at least double renovation rates in the next ten years.
The EU Renovation Wave strategy aims to speed up the renovation processes in the next ten years and thus to improve the energy performance of buildings. This is expected to result in reduced CO2 emissions, the accelerated economic recovery of COVID-19, job creation, and more efficient use of energy resources. In order to achieve the intended results, there are so-called ESG standards that must be met.
The ESG criteria include properties that a company or investment must meet to be classified as sustainable. In short, sustainability means that the world's natural resources are used carefully and that environmental protection and human rights are respected. Also, the new regulation of the EU, which came into force on March 10th, 2021, and calls for the disclosure of sustainability efforts, is again putting pressure on large companies and capital investors. Accordingly, ESG is an abbreviation for the three terms environmental, social, and governance. But how do these terms relate to one another, how do they cover the aspect of sustainability?
The Environmental aspect mainly concerns the protection of the environment and climate by means of strategies against climate change and the minimization of the carbon footprint. This is achieved, for example, through energy-efficient building management, careful/prudent water management, wastewater disposal, and short delivery routes.
The Social area deals primarily with human dignity and the working conditions of employees. This includes, for example, the creation of a fair workplace or freedom of assembly and trade unionism.
Criteria for sustainable Governance (corporate management) are, for example, the introduction of control bodies (e.g., supervisory board), targeted measures against corruption or diversity, and equal opportunities.
Sustainability as megatrend in the real estate industry
The environment is most relevant for the real estate industry. Due to the high energy consumption and the heavy reliance on fossil fuels such as oil and gas, real estate is a key element in implementing a more sustainable energy supply. Buildings are therefore under great pressure to decarbonize. They must reduce their CO2 emissions by more than 80 percent compared to 1990 because they account for 1/3 of global CO2 emissions. During the COVID-19 pandemic, it has also been shown that, despite the uncertainties, sustainability issues are becoming increasingly important. It is therefore the aim of politics and society to link aid measures for companies to conditions of sustainable action and economic activity. In this way, COVID-19 can become a catalyst for ESG in the real estate industry. When it comes to real estate, issues such as efficient wastewater use, and flood protection are also important. In the case of new buildings, attention is paid to energy efficiency during the construction of the building. There are already many smart technologies for this in the Proptech industry.
Sensorberg attaches particular importance to sustainability
In accordance with the trend and the urgent need, Sensorberg also implements sustainable processes and approaches in order to design new as well as existing / older buildings in accordance with our vision to be climate neutral. Because we are also aware that sustainability is not an option or prestige but an inevitable obligation! For this reason, we have also placed a Head of Sustainability at Sensorberg in order to focus this topic with particular attention and to take sustainability into account in various corporate strategies for 2021.
So far, there are already numerous intelligent technologies with which we can implement the ESG criteria. And there are many more to come! Let's look forward to a better future with efficient ideas! In our next blog post you will find out which technologies and solutions Sensorberg has developed to ensure the ESG criteria, so stay tuned!