What is ESG Data?
Definition
ESG is short for 'Environmental, social, and governance', which are a set of standards for businesses to report on their social and environmental impact. Typical metrics include carbon footprint, organizational diversity, and corporate governance transparency. More specific examples include:
1) Environment:
- Energy-saving and renewable energy usage
- Carbon reduction and net-zero progress
- Water conservation
- Safe disposal of waste
- LEED, BREEAM, and WELL property certifications
2) Social:
- Employee wellness
- Benefits packages
- Encouraging individual development
- Ethically sourcing resources
- Paying reasonable wages
3) Governance:
- Diversity of the board
- Corporate social responsibility
- Using benchmarking tools such as Global Real Estate Sustainability Benchmark (GRESB)
Why it Matters
Commercial real estate investors are embedding ESG considerations into every investment as ESG is becoming a prominent industry trend. According to CBRE's 2021 Global Investor Intentions Survey, 60% of respondents said that they have already adopted ESG criteria as part of their investment strategies.
ESG data will help benchmark portfolios, improve transparency, and inform a more accurate insight into how the company is performing from a financial perspective. Also, a leading online data collection platform called Bright Data found that over 76% of US's organization's investment decisions are impacted by ESG factors.
