Currently, ESG principles are beyond an industry trend; their implementation in real estate development is a necessity more crucial than ever.
How are sustainability and sustainable development criteria established in the industry?
As stated by the Mexican Ministry of the Environment and Natural Resources1, sustainability and sustainable development concepts are not synonyms. However, their respective meanings complement each other regarding companies in charge of industrial real estate projects.
Here are the reasons why companies must pursue sustainability and sustainable development for transparency and evidence of their endeavors to achieve these goals.
It is easy to attain the above since, worldwide, different certifications endorse the fulfillment of environmental protection and responsibility regulations. For instance, the Mexican Association of Private Industrial Parks (AMPIP) includes the following:
1. LEED2
(Leadership in Energy & Environmental Design)
It is a certification system with international recognition created by the U.S. Green Building Council.
Construction companies, real estate developers, and governments can submit buildings built for different purposes for evaluation and, after getting the seal, access the following benefits:
- Increase in property value.
- Operating cost reduction.
- Less greenhouse gas emissions.
- Energy and resource-saving.
2. EDGE3
(Excellence in Design for Greater Efficiencies)
It is a certification focused on the construction of efficient industrial spaces. This tool was created by the International Finance Corporation (IFC) for real estate developers; with it, they can easily identify costs and alternatives to energy saving, such as water and building materials. A specialized auditor verifies the strategies.
3. GRI4
(Global Reporting Initiative)
This certification program encourages real estate developers to submit a sustainability and social responsibility report. This document must have a statement of the organization’s values and commitments, the corporate governance model, and explains how the company’s strategy meets the needs of a sustainable global economy. Upon delivery of the report, the data exposed must be verified.
4. GRESB5
(Global Estate Sustainability Benchmark)
It is a methodology that evaluates ESG criteria in real estate development around the world. Its purpose is to be a tool for investment funds and financial institutions to validate their sustainability, social responsibility, and governance strategies. They can also evaluate the performance of portfolios, real estate, and infrastructure assets.
Sustainability in real estate development construction is a key step
The interest in implementing sustainable economic models has caught the attention of the industrial real estate sector since they can get higher profitability, improve efficiency in operations, and enhance energy saving.
A study by PwC6 shows that energy-efficient certified buildings can lead to significant savings.
Moreover, industrial construction complying with these requirements can be well ahead of legal requirements on sustainability.
At the same time, the circular economy’s principles, which in this case, involves building with recyclable materials, are a wise approach to comply with the sector’s environmental responsibility goals.
Therefore, about 70% of industrial parks7 in Mexico monitor the commitments adopted for sustainable development and sustainability, as indicated in a study conducted by AMPIP.
ESG criteria: social responsibility and investment strategy
The Environmental, Social, and Governance (ESG) criteria illustrate the commitment of the real estate developers companies while laying down a guideline for strategic investment. Its definition and implementation bring significant benefits, including:
- Greater investment attraction and access to sources of finance.
- Integral approach contributing to productivity and profitability.
- Social, environmental, and community well-being.
- Operations in alignment with the UN Sustainable Development Goals8.
- Promoting the construction of intelligent industrial parks.
Advance Real Estate: industrial spaces committed to sustainability
At Advance Real Estate, we apply ESG principles across all our operations and investments to face the future in the best possible way.
Our goal is to be the company that positively impacts the environment, people, and the community to which we belong.
Information source
- www.gob.mx/semarnat/…/diferencia-entre-sustentable-y-sostenible
- https://www.usgbc.org/leed
- https://edge.gbci.org/?language=es#:~:text=EDGE%20es%20un%20sistema%20de,en%20hacer%20edificios%20m%C3%A1s%20eficientes.&text=EDGE%20es%20una%20innovaci%C3%B3n%20de,del%20Grupo%20del%20Banco%20Mundial.
- certifications.controlunion.com/es/…/gri-iniciativa-de-reporte-global
- https://www.gresb.com/nl-en/
- www.pwc.es/es/…/hacia-modelo-inmobiliario-sostenible.pdf
- inmobiliare.com/sustentabilidad-tendencia-para-la-construccion-de-parques-industriales
- abd.ong/ods
- www.ampip.org.mx
- bioconstruccion.com.mx/certificacion-leed
- www.ifc.org/wps/…/home
