ESG

Sustainability is quickly becoming a priority for governments and businesses across the world. Amidst the adoption of reduced emission targets, a key area of focus is investment in and deployment of renewable energy (RE), which is a key solution to decarbonisation and achieving net zero emission goals.

Businesses throughout all industries are increasingly looking towards RE, whether to meet the applicable regulations in their jurisdictions, or to utilise the available green incentives. However, to effectively assess the implementation of RE solutions, businesses must first traverse the RE-related policies, restrictions and green financing in their respective jurisdiction. An added dimension of complication is added if the business operates across country lines, as the policies and focus of each country may differ.

To help businesses navigate the policies and laws affecting the RE sector, Rajah & Tann Asia published the Guide to Renewable Energy in Southeast Asia which provides an overview of the RE landscape in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, where Rajah & Tann Asia has its geographical footprint.

This Guide summarises the salient legal and regulatory issues in each jurisdiction that businesses should be aware of in their implementation of RE, including the regulatory framework and sectoral policies, RE programmes, government incentives, and key issues in the RE sector.

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Navigating complexity, driving ESG strategy integration and adding long-term value to organizations

In today's rapidly changing world, sustainability has gained significant importance, especially so in the built environment, which contributes an estimated 40 percent to global carbon emissions making rapid decarbonisation of real estate essential if we are to limit warming increases to the 1.5C threshold to mitigate the worst effects of climate change by 2050.

As businesses increasingly recognize the importance of sustainability and responsible business practices, the need for a Chief Sustainability Officer (CSO) or Head of Sustainability has emerged as a crucial position within organizations to drive change, navigate complexity and unlock the true potential across environmental, social and governance (ESG) dimensions. The role itself is new, with over 60% of respondents in a recent survey conducted by CBRE and the US Green Building Council noting their role was only created in the last three (3) years.

Sustainability—sometimes used interchangeably with ESG—encompasses such a wide and broad spectrum of issues, ranging from climate change and human rights to board diversity and corporate governance. A fast moving regulatory and legislative environment with increasing reporting and compliance requirements, mounting stakeholder pressures, climate change risk mitigation and adaptation, and rapid technological change - all combine to make the world of ESG Increasingly complex and challenging to navigate.

A CSO (or head of Sustainability) therefore plays a pivotal role in navigating complexity, integrating ESG considerations into an organization's overall strategy and ensuring that sustainability becomes an integral part of decision- making to add ongoing value to the organisation.

In the Asia Pacific region, the role of CSO is rapidly gaining prominence as investors display increased appetite for sustainable portfolios and occupiers seek energy efficient and healthy buildings in line with their own net zero and sustainability commitments. With increasing new regulations requiring even greater sustainability disclosures, the role of a CSO is becoming mission critical, and the hunt for talent in APAC is on.

So, what are the priority focus areas for CSOs? In a recent CBRE and US Green Building Council survey of over 67 APAC Built Environment Chief Sustainability officers, respondents indicated that they have a broad remit, with key responsibilities identified as conducting ESG monitoring and reporting (96%) and to implement Sustainability related projects (85%).

Increasingly, and importantly, the CSO serves as a bridge between the organization and its stakeholders, including investors, customers, employees, and communities. Internally, they must collaborate with various departments to develop and implement sustainability initiatives, identify opportunities for innovation and efficiency improvements, and build organisational capabilities.

Eighty-four percent (84%) of survey respondents noted managing stakeholder relationships and fostering cultural change (76%) as key elements of their roles. They must develop and maintain transparent communication channels, addressing stakeholders' concerns and expectations, both internally and externally.

CSOs also indicated concerns regarding future regulatory changes and the nascent stages of understanding risks that climate related disasters pose to their portfolios. They acknowledge much more work needs to be done to promote the long-term benefits that sustainability adoption has on corporate branding, talent attraction and climate risk mitigation. Embedding Sustainability takes time, strong business acumen and stakeholder management – and a powerful desire to make a positive change recognising that people, planet, and business performance are interdependent.

CSOs have a broad remit to track ESG project progress and enhance transparency

In response to the tighter regulation of sustainability-related disclosure, the primary focus of CSOs is ESG monitoring and reporting, as well as implementation of related projects.

CSOs are also responsible for fostering corporate change to promote and align with their company's ESG goals. This includes assisting different business lines to develop ESG capabilities and acccountability.

As many CSOs tend to focus on implementing internal corporate priorities, relatively fewer are engaged with lobbying policymakers on related policies. However, as the path to decarbonisation involves significant regulatory change and policy support, this is an area CSOs cannot overlook.

At CBRE, we have witnessed the benefit of having the clarity of leadership and direction with our first Chief Sustainability Officer Rob Bernard, who joined CBRE last year with 20 years of experience working at the intersection of sustainability, business and technology—including serving as Microsoft’s first Chief Environmental Strategist. His leadership has galvanised the integration of sustainability across our business globally to better serve our clients and deliver on our own commitment to achieve net zero carbon emissions by 2040. We are positioned to simplify complexity so that we can accelerate sustainability progress through clear and executable strategies for our clients. We do this for clients big and small, global, regional, and local.

We have significantly invested in tools, partnerships, technologies, and services that have the power to drive change at scale and transform the industry for a sustainable future. And we also recognise that to champion sustainability within the built environment, our efforts begin at home as we tackle the very same challenges faced by our clients.

The role of the CSO will continue to evolve as sustainability matures, and organisations that have invested in this role are better placed to manage risk, drive cost savings and operational efficiencies, engage stakeholders, foster innovation, and promote employee engagement. The CSO is multi-faceted and affects all parts of the organisation, reflecting the wholesale change that is needed to gain a competitive advantage as we transition to a decarbonised world. The role is critical in creating long-term value, enhancing brand reputation, and positioning their organisations as leaders in sustainability and ESG practices.

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CBRE Asia Pacific Research and the U.S. Green Building Council have jointly launched the Asia Pacific Real Estate Chief Sustainability Officer Survey, which provides insights from landlords and investors across the region on how they are addressing the ESG imperative, the role of the CSO in achieving their goals, and their companies’ level of preparedness in achieving net zero, as well as any obstacles that are hindering progress.Key findings include: 

• Having a CSO or Head of ESG is seen as essential: More than 80% of sampled landlords and investors have established designated roles for such functions in Asia Pacific.
• Asset owners’ net zero target is 20 years later than occupiers: About half of the surveyed asset owners cited 2050 as their target to achieve net zero. However, a separate CBRE ESG survey finds that many multinational occupiers are aiming to reach net zero by 2030.
• Adoption of green-certified buildings is accelerating: Asset owners will increase the number of green buildings in their portfolios in the coming three years, although availability of green office space lags market demand.
• Asset owners have widely adopted green finance: 75% of surveyed asset owners have adopted green financing for capital-heavy construction and acquisition of green buildings, with Sustainability-Linked Bonds also proliferating.

This report was originally published in https://www.cbre.com/insights/reports/asia-pacific-real-estate-chief-sustainability-officer-survey

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In today's dynamic business landscape, where environmental concerns are at the forefront of global discussions, the Indian real estate sector has embraced a transformative shift towards sustainability. One of the pioneering Indian sectors – real estate is revolutionizing the industry through Grade A ecosystems of green office spaces while contributing to a thriving economy. India is currently ranked third in the world with more than 752 LEED-certified properties after China in Canada, basis USGBC Annual list.

A holistic, sustainability-driven, Grade A ecosystem is fostering business growth across India, through several initiatives:

Setting Industry Standards for Green Office Ecosystems
The real estate industry’s shift towards sustainability is marked by a growing preference for green office spaces that seamlessly blend eco-consciousness with industry-relevant standards. These spaces are designed with a deep consideration for energy efficiency, resource conservation, and reduced carbon footprint. By incorporating advanced technologies and innovative architectural designs, green office spaces not only promote a healthier environment but also set a new benchmark for industry standards, inspiring others to follow suit in creating sustainable workspaces.

Sustainable Practices at the Core
Getting these green standards in place requires collaboration. Real estate professionals, architects, environmental experts, and regulators need to join forces. They will need to establish clear metrics for energy usage, water management, indoor air quality, and all-around sustainability. Certifications offered by esteemed organizations like LEED & IGBC add weight, serving as a seal of approval for genuine green credentials. As the demand for sustainable workplaces surges, these green office space standards are pivotal. Those who construct and use these spaces are shaping a cleaner and greener future.

Preferred Choice for Organizations and Employees
Grade A green office spaces' success transcends mere adherence to environmental benchmarks; they have evolved into the favoured choice for both organizations and employees. In today's professional landscape, there is profound esteem for spaces that harmonize with sustainability-oriented principles. Consequently, employee preferences for eco-conscious work environments influence organizational decisions significantly. Abundant greenery, natural illumination, and fresh air collectively exert a positive influence on the overall work milieu, fostering heightened creativity, engagement, and job satisfaction.

Fostering Business Growth
These practices have not only resulted in positive environmental impact but also spurred humungous business growth and aided economic growth. The adoption of sustainable practices has led to the creation of jobs in various sectors, ranging from renewable energy installation to eco-friendly construction materials.

The influx of businesses into these spaces has led to increased foot traffic in areas within these ecosystems, benefiting local businesses such as cafes, restaurants, and retail stores around. The growth of these businesses, in turn, generates employment opportunities and contributes to the overall economic vitality of the region.

In conclusion
On the path to sustainability, the Grade A ecosystems within green office spaces adeptly strike a harmonious equilibrium between modern infrastructure and ecological accountability. However, the influence of these spaces extends beyond environmental preservation. Responsible businesses prioritize eco-friendly and healthy workspaces that align with their values, ensuring sustainable growth in demand for these thoughtfully designed environments.

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