Welcome to ‘The ESG Crunch’ with Tom Allport, a Q&A focused on Sustainability & ESG in the Built Environment.
This Q&A series is an opportunity for our Lead ESG & Sustainability Consultant, Tom Allport to discuss all things Environmental, Social, and Governance (ESG) with some of the leading players and decision-makers in the space. Each week we will ask burning questions centered around the critical role of ESG in shaping business strategies, fostering sustainable innovation, and driving societal impact. This series will provide a platform to share insight into how these leaders are integrating ESG principles into their organisations, navigating challenges, and advice for aspiring entrepreneurs looking to join the ESG & Sustainability industry.
CBRE Group, Inc. a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2022 revenue). The company has approximately 115,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Across our global Property Management business line we manage 2.9 billion square feet for our Investor clients across 40-plus countries.
How did you find yourself working in the ESG & Sustainability space?
I always knew I wanted to work within what was, at the time, the Environmental Management sector reading Environmental Science at University with a growing focus on the Human and Built Environment as the course progressed. I’ve always been fascinated by how societies evolve and how humans shape their environment and saw the field as a way of turning my interests into a career. While it’s incredible that it is now such a headline topic it certainly wasn’t always that way so it’s been a privilege to see the sector evolve and to take a lead role in establishing the approach of each organisation I have worked within.
What does your role at CBRE entail?
I lead the development and delivery of sustainability solutions and services across CBRE’s Property Management line of business globally in a role that really underlines the importance of focusing on existing real estate assets in our pursuit of sustainability on our sector. We work with a wide range of Investor clients from pension funds and REITs to private equity and family office clients each of whom are at various stages of understanding and adoption of sustainability, and across all regions globally, each of which have different drivers for adoption. As such, the strategy we have developed needs to be flexible enough to meet clients and teams where they are while bringing a degree of consistency to our management practice and accelerating understanding and adoption of sustainability as a value add proposition now, and into the future.
Could you share some insights into the ESG & Sustainability priorities at CBRE?
Our priorities are outlined in our annual Corporate Responsibility report but to summarise some of our key priorities we have organisational commitments to:
With ESG being so broad across industry and so nuanced within Real Estate, what specific focus do you and your team have?
We partner with clients at different stages of their sustainability journey so our focus is different for each. Some have already embraced the strategic advantages of ESG and are eager for their partners to enhance, for example, property management practices to better align with their objectives. To meet these requirements we offer a fully integrated sustainability service led by subject matter experts from within Property Management who coordinate all activity up and downstream at the properties and portfolios we manage on their behalf. Other clients are in the process of exploring ESG considerations and may need our support and guidance in assessing sustainability through a risk-based perspective, using data to identify potential risks and opportunities to add value, for instance through OpEx/NOI, or improved reputation.
What unique challenges and opportunities do you see with ESG in the UK compared to other global regions?
The sector is mature in the UK having benefitted from pioneering domestic legislation, adoption of European Directives, and active industry organisations. That said there is a challenge around how we strengthen legislation to align with policy to accelerate adoption and achievement of our national goals. The opportunities are far greater in my mind though, there is momentum in the industry to continue to improve quicker than legislation may mandate it which means that voluntary standards and schemes developed by the industry can set the standard overall, take the Task Force on Climate-Related Financial Disclosures (TCFD) for example. From CBRE’s perspective there is an opportunity for us to take what we have learned in the UK across our global organisation, my role was originally focused on the UK but the framework we developed can accelerate the improvements we see elsewhere which is super exciting!
Globally there is a skills talent gap in the ESG & Sustainability Real Estate sector, what skills are particularly important when developing and implementing the CBRE ESG Strategy?
Implementing an ESG strategy at its heart is a change management process which does require the means to be flexible while the ends remain fixed. I recently read The Solutionists by the amazing Solitaire Townsend who wrote of the need for ESG teams to include 3 key archetypes; the Architect, the Actioner, and the Accelerator. The Architect has a clear vision of what the end state needs to look like and some of the interim steps; the Actioner understands the steps needed to reach each milestone and the ultimate goal; and the Accelerator is able to inspire wider teams to accept the change, see the benefits, and understand what it means for them. Thinking in these terms helps address the skills/talent gap we are facing. Provided there are team members who understand the issues and how they relate to the sector they are working in, the team can be enhanced by bringing in enthusiastic non-specialists who bring different perspectives while they develop their subject knowledge. In some cases it is better to employ for attitude, and train for skills, to reach as broad an audience as possible, as quickly as possible.
How have your client’s ESG & Sustainability needs and priorities changed in the last 12-18 months?
Net zero still remains the number one priority and has arguably been responsible for the rise of sustainability across the corporate agenda. The focus on this area has highlighted issues around whether we know enough to understand exactly what net zero means, and whether the reality can live up to the ambition. We see ourselves very much as partners on this journey and recognise that the data we can access, and our knowledge of operational real estate is of central importance to advising and guiding client strategy. Away from net zero there has of course been a lot of discussion around occupier and customer experience, and health and wellbeing as the world adjusts to the new reality following the pandemic, and the changing expectations of the workforce. There is a rising awareness of and interest in biodiversity too which for me is long overdue given the inextricable link between the health of our planet and the health and productivity of our economies. As a purist it’s fantastic to see evidence of systems thinking becoming part of standard business thinking.
What challenges and opportunities does CBRE have with ESG & Sustainability?
As with any large organisation there are challenges around minimising duplication of effort while ensuring the right services are being delivered to clients no matter which part of the organisation they are engaged with. There are also challenges around consistency across our business in terms of ensuring we are delivering the right level of quality across instructions that span geographies. However, understanding these challenges means we can address them and one of our biggest opportunities is to work with such deep subject matter experts across the world to solve these challenges to improve our own services and the experience our employees and clients get. I can speak to this directly given my own time at CBRE and having seen what we built in the UK being extended into Europe and now adopted as the way we want to approach sustainability for our whole Property Management business, building it out with the support of teams across the world.
How have you found the market in 2023?
As active as ever, and busier than ever. We are seeing more interest that ever from clients to understand their impact, improve performance, and demonstrate their progress. My primary focus this year has been on bringing our sustainability services to market in the USA, adapting the UK blueprint to ensure it sets us up for success in delivering added value to our clients in the same ways we have seen in the UK and across Europe.
Finally, what advice would you give to aspiring ESG & Sustainability talent in today’s market?
I would suggest that those entering this space shouldn’t have a fixed idea of where they want to end up. By its definition this is an incredibly broad field so embrace being a generalist knowing that there will undoubtedly be opportunities to explore what you think your specialism might be. Along the way you might surprise yourself and pursue something entirely different.
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