They used to say money makes the world go round -- and while that might still hold true, a pretty powerful contender is rising on the horizon: data. Dubbed as the new oil, data has the power to almost move mountains -- if not physically, then definitely metaphorically.
There's virtually no industry that has not been touched by data. From healthcare to the media, logistics to finance, data helps companies understand human behavior and patterns in order to enhance their services or products.
Real estate makes no exception: it needs data to thrive. But while other industries might have it easier on ensuring quality data collection, the real estate world is still somewhat lagging behind.
What's happening -- and more importantly, how to fix this issue?
Keep reading and find out more.
What Is Sustainability Data?
Sustainability data refers to the compilation of information on environmental, social, and governance factors that may affect a company's operations. This data is used to measure a company's impact on the environment and society, as well as its corporate governance practices.
This type of data is becoming increasingly important for companies in all industries as consumers and stakeholders emphasize sustainability efforts more. Companies must prioritize sustainability to remain competitive and provide customers with what they want and need. Yet, if the data they collect isn't accurate, they can't actually show it to the public -- and thus, they cannot prove their genuine interest in developing sustainable real estate.
Why Is Sustainability Data Important for Real Estate?
According to NIQ, 69% of the global population believe sustainability is important. Since real estate plays a massive role in shaping our environments and communities, it's crucial for the industry to prioritize sustainability efforts.
In the light of these facts, sustainability data is important for real estate from two main points of view:
- It helps the real estate industry grow (because data fuels innovation and creates opportunities)
- It shows the industry's genuine commitment towards sustainability (companies can provide proof of their efforts, which increases trust and brand reputation)
Additionally, using sustainability data in real estate can also lead to cost savings through resource management and improved efficiency. It can also attract environmentally conscious investors and tenants, which can bring financial benefits for companies.
“As the significance of ESG data skyrockets in corporate and commercial real estate, firms must elevate their data management approaches. Real estate executives will need to utilize technology to automate and iteratively improve data quality to effectively navigate the landscape.” (Amelia Feehan, Industry Analyst, Verdantix)
How Do You Collect Quality Sustainability Data?
Collecting sustainability data can be done using various methods, such as surveys, audits, and self-assessments. However, the key to ensuring quality data lies in proper measurement criteria and processes.
Let's take them one by one.
Some of the most important measurement criteria to consider in collecting quality sustainability data include:
- Relevance: the data must be relevant to the specific sustainability goals of a company and its industry.
- Accuracy: the data must be accurate and based on reliable sources.
- Completeness: all necessary aspects of sustainability should be covered in the data collection process.
- Consistency: the same measurement criteria should be used consistently over time for accurate comparison and analysis.
Additionally, when collecting sustainability data, you must make sure you follow a consistent process across the board, every time. For example, if conducting surveys, make sure the questions are clear and unbiased, and the sampling method is appropriate for your target audience. Also, if you need to compare data in the future, make sure the data collection methods, sample size, and target audiences are comparable.
Sustainability Data Quality in Real Estate: 6 Challenges
Maintaining data quality in real estate sustainability research can be problematic sometimes -- but even if it may come with challenges, they are not insurmountable. Here are some of the most important hurdles you might encounter when scaling your sustainability data collection efforts.
One of the most significant challenges in sustainability data collection for real estate is accessibility. Many organizations might not have access to certain data sets, which can hinder their ability to collect accurate and relevant information. This can be due to a lack of transparency or standardized reporting processes within the industry, and it can also be due to privacy concerns.
To overcome this challenge, you need to build strong relationships with data providers, collaborate with multiple organizations, and advocate for transparency in reporting standards. You also need to be consistent, both when it comes to how you collect data and how you process, manage, store, and delete it.
You can't compare apples and oranges. Aside from the fact they're fruit and round, there's not much resemblance -- which is precisely the kind of issue you might encounter when collecting sustainability data in real estate. Different countries have different regulations, and even if two companies operate in the same market, they might have completely different practices.
What's more, if you're not consistent with your data collection practices and criteria, you might end up with data that cannot be accurately compared in the future. To ensure comparability, make sure your criteria are clear and consistent, use standard measurements whenever possible, and pay attention to local regulations.
Incomplete data is another common pain point among sustainability researchers. Some companies may be more transparent in real estate; therefore, data collection can vary significantly between organizations and markets. As such, it becomes almost impossible to paint the whole picture of what is truly going on with the evolution of a real estate firm's sustainability efforts.
To overcome this challenge, you must prioritize data completeness in your analysis and communicate with your data providers to fill in any gaps. You can also consider using secondary data sources when needed.
Data privacy concerns might sound like the kind of thing only some businesses and business departments should worry about. But, in the end, data privacy legislation and regulations affect everyone.
In real estate data collection, data privacy can hinder the success of your data collection efforts by reducing transparency and limiting access to information. It can also make it slightly more complicated to start collecting data in the first place -- particularly if you need to harmonize data across multiple countries with different privacy laws.
Some of the best ways to deal with this challenge include following all relevant legislation and regulations, fostering trust between data providers and consumers, and implementing proper security measures for handling sensitive information. More than anything, the golden rule of staying compliant across different geographical regions always lies in keeping your customer at the center of all your data collection and management best practices.
Inaccurate data is another pressing challenge in sustainability data collection. It might occur due to human error, outdated information, or even intentional data manipulation. Additionally, different companies and industries may use various methods for collecting and reporting data, which can lead to discrepancies.
To ensure accuracy in your data collection efforts, you need to have clear measurement criteria and processes in place. Make sure the sources are reliable, and check the data for inconsistencies or outliers. If you notice any errors, communicate with the data providers to correct them as soon as possible.
Data veracity refers to the trustworthiness or reliability of data. In sustainability data collection, this can be a significant challenge due to the complex nature of information and its sources. For example, companies may self-report their sustainability efforts, leading to potential bias in the data. Additionally, external factors such as societal pressure may influence how companies report their sustainability performance.
To address this challenge, it is important to include multiple data sources and consult with external experts to ensure the accuracy and objectivity of your findings. Additionally, implementing robust validation processes can help identify any potential biases in the data. Maintaining transparency and open communication with data providers is crucial for ensuring the veracity of sustainability data in real estate.
How Sustainability Data Is Connected to Digital Transformation
They say all roads lead to Rome.
But in data collection (of all kinds), all the best practices lead to tech.
You can't really collect data effectively and securely without the help of technology -- and real estate sustainability efforts make no exception from this rule. As such, you need to make sure you use the right tools to collect information about how sustainable your real estate developments are:
- How much energy do buildings use?
- What is the carbon footprint of a property?
- How do tenants use the space, and what are their sustainability behaviors?
- How do materials and resources get used and allocated?
- What are the overall emissions from transportation, construction activities, etc.?
Technology can provide answers to these questions and more. By using smart building technologies, IoT devices, and data analytics tools, you can collect accurate and real-time data insights to enhance your sustainability efforts in real estate.
For instance, if you run office buildings and you want to make sure you collect all the essential info about the environmental-friendliness of said offices, you could use Yarooms' Sustainable Workplace feature. More specifically, our tool allows you to measure the CO2 emissions
- Generated by the use of office facilities
- Generated by employee commute
- Generated by working from home
All of this data can prove invaluable in developing better, more sustainable workplaces that keep the planet cleaner. It can also provide you with enough material to build sustainability campaigns around it, to show potential customers what your brand's values are, and to attract the attention of investors. Last, but not least, as an employer, it can make you more attractive to employees, as sustainability strategies can drive more employee engagement.
Yarooms collects all this data by measuring how many employees are in the office and what is their average energy consumption. The software also allows you to switch on a commuter mode, which measures how much CO2 you have saved by working remotely on given days of the week.
The Bottom Line
Measuring sustainability efforts is more than just important -- it's crucial for how we want to move forward: as businesses, as a society, and as individual inhabitants of this planet.
To ensure that we have reliable data at our disposal for making informed decisions, we must overcome challenges such as privacy, accuracy, and veracity in sustainability data collection. By following best practices and using technology to aid us in the process, we can achieve our goals of creating a more sustainable future for all.
So let's start collecting data responsibly, transparently, and securely - for the benefit of our planet and future generations. And let's use that data to drive positive change towards a more sustainable world.
After all, it's not just about being compliant with regulations; it's about doing what's right for the environment and our global community.