ESG criteria

DateSeptember 14, 2021

What are ESG criteria?

When it comes to assessing a company’s extra-financial performance, three factors come into play:

  • Environmental criteria, which measure the company’s direct and indirect impact on the environment based on greenhouse gas emissions, environmental risk forecasts and waste management
  • Social criteria, which evaluate the company’s impact on its stakeholders in different areas: staff training, prevention of work-related accidents, respect for employees’ rights, social dialogue, the supply chain, as well as gender parity and minority representation among employees
  • Governance criteria, which looks at how a company is managed (anti-corruption, pay transparency…) and whether there is an audit committee

What is the purpose of ESG criteria?

ESG (Environmental, Social and Governance) criteria are now key to evaluating any company, providing a full picture of its extra-financial performance:

  • environmental impacts
  • asset sustainability
  • stakeholder relationships
  • the ethical impact of investments
  • the economic impact of investments

Why implement an ESG strategy?

Companies today are facing a number of new challenges:

  • increasing regulatory pressure
  • growing scrutiny from stakeholders
  • the need to advance their environmental transition

Did you know ?
Today, 80% of institutional investors include at least one ESG component in their action plan.

At this point, portfolio managers have two investment options: assets that are already high performing, or low-yield assets with strong potential for improvement.

Regulations may be the main driver behind ESG, but an effective strategy has non-negligeable advantages:

  • sending a positive signal to stakeholders
  • enhancing the company’s brand image
  • evaluating and improving assets’ extra-financial performance

How to carry out ESG reporting?

Guiding your ESG actions successfully and communicating on results require solid indicators and reliable data… but collecting this data can be complex and time-consuming.

The first step is to set up automatic ESG data collection for all your assets and properties  – common and private areas alike.

Best practice
Have your tenants sign a one-time consent form for consumption data retrieval, to avoid the need for yearly access requests.

Once your information sources are centralized and you’ve got a clear picture of your portfolio, optimize your indicators! Use the power of machine learning algorithms to verify information automatically, estimate missing data and generate indicators.

Finally, take the opportunity to review and reinforce your ESG strategy, identifying areas for improvement from one year to the next. With today’s tools, assessing your ESG performance and sharing results has never been easier!