Nearly all players in the commercial real estate market share the view that the pressure is growing on corporate leaders to have an ESG-compliant stock and operation. But the majority of them stop at „E” i.eg. being more energy efficient and environmentally friendly. This was one of the takeaways of last week’s Budapest ESG Meetup, organized by Property Forum in partnership with workcloud24.
In his presentation, Áron Horváth, Head of Sustainability at CBRE referred to a recent survey made by his firm on the attitude of corporations towards ESG. It turned out that 52% of the respondents think this is an obligation and only 48% consider it as a business driver. Nearly 40% would pay a premium for a building with superior resiliency. However, the majority agree that regulations are materially different, will impact assets and will not go away.
He named the top challenges: poor availability of quality data, costs exceeding benefits and benefits not entirely clear. „ESG costs money and low-cost measures can not bring significant first improvement on underperforming assets”, he said. The expert also noted that green certification has a positive effect on office rents and a negative impact on vacancies in Budapest. During the panel discussion, Zsombor Barta, Head of the Hungarian Green Building Council admitted that certifications can be instruments of greenwashing and added that having a green stamp will not change the company itself.
The second presenter of the event was Andreas Kozma, Founder & CEO of iREMS International AG. He argued that no real ESG compliance can be achieved without integrated and constantly updated data management. Their special dashboard manages and updates all collected data on energy consumption, other technical features and financial conditions, including price changes. He spoke about advantages: the automated data collection minimizes data entry errors, transparency is provided by a single source of truth, and if dashboards are managed properly operating costs can be reduced significantly.
Following these two presentations, there was a special panel discussion about the current processes regarding the implementation of ESG in Hungary and across the CEE region.
According to Gábor Helembai, Counsel at Taylor Wessing, regulations are the biggest driver to make real green operations and increase the share of green buildings. Mr Kozma disagreed saying that high energy prices are the main concerns and force corporate boards to take quick steps to save money.
Mr Barta named a third driver: risk mitigation. He also added that the new EU Taxonomy gives a high-level definition of ESG standards but the realisation of those goals depends on corporations. „For many stakeholders, ESG as a topic is a mystery and foggy. The majority of them are not cooperating. On the other hand, regulations are far behind the practice in many EU countries and hinder day-to-day operations”, he stated.
Csaba Zeley, Managing Director of ConvergenCE emphasized that ESG is about returns and it is not as expensive as thought among corporate leaders. Some minor but important technical changes can make huge progress but agreed that these steps bring only short-term benefits. He referred also to the elements „S” and G” which he thinks are about attention to employees and the surrounding physical and social environment. „Companies focus only on the "E" element, meaning mainly energy saving. They see it as the easiest part to manage and monitor. But this is a mistake, you have to focus on all elements," he said.
Mr Horváth said a proper cost-benefit analysis is needed to have a clear picture, otherwise, corporations are not able to move on and source the money to carry out modifications. Finally, Mr Barta cited examples of when remodelling and refurbishing existing buildings can bring huge benefits. „This is also important and gives real returns,” he said.
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