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.
