07 Jun 2023
Following the continued development and growth of our Environmental, Social, and Governance (ESG) services lines during the past few years, we are pleased to announce that Delta-Simons has been shortlisted for the Second Annual Global Sustainability Consulting Awards by Environment Analyst.
Environment Analyst, specialist intelligence and market data on the environmental and sustainability/ESG consulting sector, stated that entries for the 2023 Sustainability Consulting Awards had been overwhelming with high-quality submissions coming from around the globe. As one of only three shortlisted for the ESG Innovation Award - SME, this award signifies to our clients and the industry, our commitment to the development of trusted, innovative products and services designed to protect people and the planet.
The ESG Innovation Award showcases a key new service offering we have brought to the market - our ESG Benchmarking Assessment tool.
Sustainability Unit Director, Rob Molyneux, Client Services Director, Graham Duffield and Associate Water Services Consultant, Alex Perryman provided a detailed insight into our ESG Benchmarking Assessment tool development process and why this unique assessment is essential for developing accountable, realistic ESG and Science-Based KPIs.
Environmental, Social, and Governance (ESG) is taking on an increasing significance with the growing alertness and demand for action amongst consumers; highlighting the responsibility, commitment and action needed to accomplish positive climate action and build a sustainable, resilient future. For the real estate sector, the ESG agenda is being driven by investors and tenants in tandem with the continual development of regional and global ESG standards and frameworks.
The Risk Of Stranded Assets
ESG, along with EDD (Environmental Due Diligence), can be used by building owners to showcase their assets' credentials to potential purchasers. Investors can use the knowledge gained through ESG activities to maximise their assets' value in line with changing legislation and market expectations, and to ensure that their assets do not become a ‘stranded asset’.
It is widely accepted that real estate assets with better ESG credentials command more value in the marketplace. In research conducted by Knight Frank, London offices with a BREEAM “outstanding rating” had a 12.3% stepped-in increase. On the other side of this performance, a Deepki survey found that 66% of real estate investors had seen a decrease in the capital and rental value of their portfolios based on poor sustainability performance.
“Boreal was delighted to work with Delta-Simons on our recent UK transactions. The team supported us with environmental phase 1 studies and peer reviews, flood risk assessments and ESG benchmark assessments. In a fast-paced market, where transactions typically close within 15 days, the Delta-Simons team have proved they are able to produce thorough, bespoke analysis under significant time pressure. As an ESG-focused investment manager, Boreal highly values Delta-Simons’ input to inform both our acquisitions and ongoing asset management. We look forward to continuing our work with them.”
- Emma Waterhouse, Associate, Boreal
What Is ESG?
ESG refers to how businesses operate within and towards the environment and people they interact with, recognising both negative and positive impacts and seeking ways to improve. It involves incorporating environmentally conscious business practices, robust social responsibility, and corporate governance commitments into a company's operations. The term is broken down into its three main components: Environment, Social, and Governance.
'E' - Environment - This component focuses on a company's impact on the physical environment, including its use of natural resources, how its operations affect the environment, and how it influences consumers' behaviour towards the natural world.
'S' - Social - This component involves considering and managing a business's impact on people, including relationships with employees, suppliers, consumers, communities, and other stakeholder groups.
'G' - Governance - This component involves the framework for decision-making and accountability, including the creation of company policies and the distribution of rights and responsibilities among different stakeholder groups.
ESG provides a framework for businesses to approach sustainable and socially responsible practices, focusing on what is most material to themselves and their stakeholders without overselling their progress. As ESG issues increasingly play a role in business decisions around mergers, acquisitions, and development, companies must provide an overview of their ESG risks and opportunities, along with their approach to mitigating or adapting to these risks and their financial implications. Transparency on sustainable and socially responsible practices is critical for the survival of companies as external audiences, key stakeholders, and financial communities focus on their progress towards ESG goals.
ESG In The Investor Market
The current market is saturated with performance management metrics for live and operational buildings, such as the WELL™ Building Standard, BREEAM and GRESB. However, no such tools were available in the transactional due diligence market. This is a key stage in a building or asset’s lifecycle and one where ESG consideration is crucial to driving market change.
Being at the forefront of sustainability consultancy in the real estate sector, we identified a need and created a solution, our bespoke ESG Benchmarking Assessment. A tool for driving ESG change in large-scale UK and European real estate transactions.
ESG Benchmarking Assessment Tool
Our innovative ESG Benchmark Assessment provides a baseline of current performance for an asset and its future management. Many key investor clients have embedded “Due Diligence” for ESG into their corporate ESG Strategy, and this product has been welcomed by Clients as a way to meaningfully deliver on that commitment. We have included in our response a case study for one such multi-national real estate investment client.
Through our ESG Benchmark assessment tool and consultancy service, clients receive a detailed interview with the tenant or property manager, with questions based on a range of global reporting frameworks, which create a set of criteria specifically applicable to real estate. A data room review allows for performance to be summarised across the ESG themes to create bespoke and unique “Impact Dials”. Finally, an action plan is provided to identify mitigation and improve target scores on the impact dials for the asset.
The Benchmarking Assessment includes: