Why landlords must take the lead in real estate ESG
Thursday, 6th October 2022
Sylvie Sasaki, Sustainability Director at CBRE, tells us why she believes landlords have the chance to unite the building ecosystem and improve the industry’s ESG performance.
As the real estate sector comes to terms with the need to achieve carbon neutrality, a worrying number of businesses are finding it hard to turn sustainability targets into meaningful action. And all the while, the clock is ticking on the industry’s 2050 deadline for net-zero emissions.
Meeting that target is important, and not only for the companies concerned. 39% of the world’s carbon emissions come from real estate.
We caught up with Sylvie Sasaki, Sustainability Director and UK ESG Lead at CBRE, who told us landlords can play a decisive role in sustainability across the sector as a whole.
Why do you feel landlords are especially important in real estate sustainability?
Sylvie: “A building is like an ecosystem. You have the landlord, the owner or investors, and the tenants. It’s a big network and we all need to collaborate. The landlord can be the top voice that brings us all together.
A lot of landlords don’t understand how powerful their contribution could be.
“But to do that, landlords need to become a bit more visible. It’s easy to think that by achieving metrics like the GRESB score, the BREEAM rating, or a wellness rating, the job is done. Green certification is a good thing, of course, but often a landlord has the opportunity to go further and take ownership of their ESG agenda.”
How can a landlord go beyond green certification, and take the lead in ESG?
Sylvie: “You need to be clear about the sustainability story you want to tell – which will give you the confidence to initiate the conversation. Ultimately, we’ve all got the same end goal and for a tenant, it makes a huge difference when their landlord is proactive.
“The first step is sharing data between landlord and tenant; gas, electric, water, and waste. Without that, you’re working with thin air – it’s difficult to pin down what you need to do. But a lot of the time landlords and tenants are still reluctant to share that information, and that can be a problem.”
What are the benefits of landlord and tenant transparency over ESG data?
Sylvie: “There are mutual benefits. Of course, the tenant gets all sorts of quick wins around energy efficiency and reduction in costs.
“But the value for the landlord is maybe not always communicated well enough. There’s growing evidence about how strong ESG performance can add value to the building and help make the asset more climate resilient. And as the 2050 deadline approaches, there’s the chance you’ll avoid a stranded asset.”
Are there broader reasons to share data beyond sustainability targets?
Sylvie: “That initial collaboration is quite a simple first step, but its impact can be significant. There’s a symbiotic relationship here. The landlord and tenant aren’t just sharing data; they’re sharing trust and buying into the concept of running a more sustainable building.
“In our view, a really engaged landlord can absolutely lead to better ESG performance.
“The benefit of that collaborative approach, being open about shared goals, extends to motivating the occupants to make the building as green as it can be. And keeping the workforce engaged with ESG is a really good way to attract and retain talent and create a positive corporate culture as well.”
How can landlords nudge tenants and occupiers to work more sustainably?
Sylvie: “It depends on the individual you’re engaging with. Each person will have their own role and objectives, and those determine what hooks them into the ESG agenda. Your challenge is working that out. When you know what the driver is you can think about regular communication or incentives.
“Role models are important too. Within a team, there could be someone you’ve never noticed before who’s actually doing something really cool. Finding that person and raising their profile can be really powerful and give you something to build on.”
If a landlord is ready to take action on sustainability, where should they start?
Sylvie: “You need to make a plan. First, understand your baseline – where you’re at right now – and then work out where you want to get to. Then think about when you want to get there; how aggressive do you want your own target to be? What’s realistic with the resources and support you have behind you?
“Obviously, there’s a global limit of 2050. But in reality, the sooner you can achieve net zero the better – in all sorts of ways.”
We’re grateful to Sylvie Sasaki at CBRE for her time and insights. Over the coming weeks, we’ll be publishing more independent expert advice on turning sustainability targets into meaningful action.
If you’re a landlord, and you’d like more guidance on getting started with real estate sustainability targets, feel free to download our new guide: Sustainability targets for real estate – where should you begin?
It features more advice from Sylvie, as well as other leading figures in real estate ESG, like JLL and Unite Students.