ESG principles and how to deal with them

The real estate market is constantly evolving and so is demand. The principle of sustainable investment, which takes into account not only the financial aspects but also the sustainability and social impact of the investment, will be reflected in the real estate market and the world of office buildings in the coming years. How to prepare?

ESG principles

ESG stands for environment, social and governance. It is a system of sustainable investment that aims to build our future responsibly. So, what exactly falls into these areas?

1. Environment

It takes into account the carbon footprint and tries to minimize it. If the project poses any danger to the environment, it cannot be considered responsible. ESG projects always seek to preserve the landscape and do not associate with deforestation. They use renewable resources for implementation.

2. Social

Everyone collaborating on an ESG project receives an adequate salary and is treated humanely. In addition to employees, emphasis is also placed on other members of the company. The project should never endanger or harm any people or animals. The development associated with a given project must not have a negative impact on the community. The social side of things is as important as the material side.

3. Governance

When it comes to governance, the company should use accurate and transparent accounting methods. The management structure is also key. There should be no conflict of interest in the members of the board of directors. Shareholders, in turn, should be able to vote on important issues while having a transparent overview of the payment of bonuses and the remuneration of the highest paid executives.

In addition to executive remuneration, fair remuneration of other employees is also considered. This includes, for example, equal pay for employees of all sexes. Significant pay gaps between regular employees and management are common not only in corporations.

The company's management according to the ESG principle is committed to reconciling these differences. Any violation of these areas automatically excludes the project from the ESG principle.

Buildings
for the future

Sustainability is an often-used term that involves the responsible use of resources and their conservation for future generations. Living in accordance with this principle means thinking about the future, leaving the planet in a condition suitable for future generations ecologically, economically and politically.

Sustainable buildings are built with an emphasis on quality materials, carbon neutrality, efficiency, water management and durability. There is practically no investment in older complexes and developers are actively targeting carbon neutrality and building certification.

Prioritizing efficiency

In the future, it can be expected that the market will also affect the efficiency of buildings. Energy-efficient houses are less difficult to operate, and in a few years, they may be cheaper to insure than inefficient buildings. The energy efficiency certificate will thus become not only a marketing advantage, but a necessity.

A dark age is coming for the owners of "unsuitable" real estate. The buildings are regarded as a technological unit and their operation is reflected in the company's annual management. Thanks to current technologies, operating costs are easily measurable.

If you do not have a certified energy-efficient building, you will have a harder time selling it for the price you want on the market today, and that goes for renting too. And remember that in the case of buildings, the product is formed through the lease. If you don't have a tenant who is on the same page with you, you don't even have value in the building

— Daniel Matula, Managing Director of CAPEXUS —

Big goals require big investments

Companies in the Czech Republic plan to invest approximately CZK 117 billion in the environment and social sustainability by 2025. Owners of buildings built in the past 15 years are awaiting major renovations. Thanks to the connection with ČEZ ESCO, CAPEXUS is also ready to supply companies with complete internal equipment on a turnkey basis, from design through implementation to solutions leading to compliance with ESG principles.