How Smart Building Technology Can Support ESG

26 April 2023

ESG Really Matters

ESG (environmental, social and governance) is a set of standards by which a company is measured. The standards evaluate impact on the environment, on society and measure how accountable and transparent a business is.

ESG really matters. When a company performs highly in ESG, stakeholders know that it values sustainability across its activities, and respects social issues, such as diversity and equality.

In addition to demonstrating strong values, ESG has been proven to have a positive impact on a company’s worth. Studies have shown that businesses who rank highly across all three ESG categories perform better overall – particularly during a period of crisis.

Introducing Accountability with Governance

Sustainability and corporate social responsibility have undoubtedly been front of mind in recent years (addressing the ‘E’ and the ‘S’), with companies, regulators, and stakeholders focusing on their impact in response to issues such as climate change and diversity and inclusion. But for many, the ‘G’ is a new concept.

The governance part of the model is all about holding businesses accountable. Companies are ‘judged’ and become responsible for substantiating their claims. It’s all very well declaring that you have met your environmental targets – but how exactly are these goals being measured, and by who?

Many see this as a force for driving positive change across numerous industries. And by supporting risk management strategies, such as ensuring employee well-being programmes and health and safety practices are in place, ESG allows companies to mitigate risk and become more resilient in the face of adversity.

The Rise in Smart Building Technology

So how does Smart building technology help companies achieve elevated ESG targets?

Smart buildings have been around for a while, and many businesses are aware of the operational efficiencies they can offer. IoT enabled devices provide data on just about any touchpoint, meaning the technology can save money in almost every conceivable area.

In the Middle East in particular, over the last decade there has been an explosion in the number of commercial spaces that employ automated operations, with the high-tech spaces saving businesses vast amounts of money.

But in 2020, faced with a global pandemic, the focus shifted. It was no longer about just saving money, and that’s when the additional benefits really became apparent.

Beyond Money Saving

During the pandemic, companies realized that the advantages of Smart building technology went far beyond cost efficiencies. The tech allowed them to immediately and effectively offer safe and sustainable spaces. Of course, these offerings had always been there – they just hadn’t had to focus on them.

ESG was at the forefront of everyone’s minds, and smart tech made it easy.

In the months that followed, commercial buildings really had to shift things up a gear. As people returned to work, businesses were under scrutiny to offer safe, hygienic spaces. Factors such as air quality, temperature, and social distancing had to be managed properly, and Smart building technology made it possible.

Not only did the tech allow management to measure these metrics and create efficiencies where needed – it also informed companies how they were performing against their ESG claims, introducing a level of accountability that was desperately needed during the crisis.

Achieving the ‘E’ and the ‘S’

The environmental and social benefits of Smart building technology are clear to see.

Let’s take occupancy sensors as an example. Smart technology can track the movement of people within any given space, at any given time. Environmentally, this means that AC and lighting can be adjusted when spaces aren’t in use, reducing your carbon footprint and saving money on bills. Socially, by tracking occupancy, buildings can manage people numbers, adjust distancing protocols to avoid over-crowding, leaving occupants feeling at ease and boosting well-being.

Data driven cleaning is another tool that offers clear advantages when assessing environmental and social factors. With a wealth of data available to FM teams about how much a space has been used, they can reschedule cleaning rosters to be as efficient as possible, meaning less environmentally harmful cleaning products and a more efficient use of manpower. If a space has seen heavy traffic, cleaning can be intensified, providing healthier, more comfortable and more productive spaces – addressing the social aspect of ESG.

What about the ‘G’ in ESG?

Crucially, Smart building technology is allowing companies to back up their ESG claims. The tech allows companies to be environmentally conscious and help them to treat their workforces in an ethical way – but it also allows them to PROVE it.

With an abundance of data, which is up-to-date and accurate, for the first time, companies can be completely transparent.

By offering data that can be used in such effective ways, and combining it with AI, it can inform automated decisions, user-friendly reporting and facilitate the most proactive outcomes and reactions. And by measuring results against user, stakeholders or regulators expectations, companies can match their performance against standardized industry benchmarks and accountability can be introduced.

What Next?

The benefits that Smart building technology offer to ESG are clear to decision makers. But getting FM teams on board and embracing the change is key to making it work.

How can companies facilitate the change? Well, the providers of the technology have designed the dashboards and interfaces with the end-user in mind. They are intuitive and designed to not to overwhelm the client. With such a wealth of information on display, readability is key, followed by a clear explanation of what needs to happen next and why.

With the right learning and training systems in place, adoption can – and should – be a straightforward and hugely beneficial process.

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