We spoke about collecting and organizing ESG data, reporting to GRESB, shareholders and more, and preparing for CSRD and SFDR among other things. If you speak Dutch, be sure to check out my episode here. Otherwise, I've collected a summary of highlights below.
Factors leading to the founding of Scaler:
- When I was setting up my consultancy Cooltree about 6 years ago, it already struck me that there was a big gap in the market of how organizations are organizing their ESG data. Consultants play a big role in the market, but our hands-on services simply can’t be scaled for everything that needs to be done, especially around reporting requirements like GRESB, to investors, SFDR, EU Taxonomy, GRI, INREV/EPRA, TCFD, CSRD..
- Two years ago, I was looking for a platform to automate a number of processes, but nothing on the market could do everything I wanted. And even with my 8 years of experience and knowledge in ESG, data and real estate, I couldn’t find the insights I was looking for when logging into the available solutions.
- The existing data platforms seem to be built specifically for one role, an ESG Manager. But in order to embed ESG practices within an organization, we have to make these insights accessible to a wide range of stakeholders: the C-suit needs to understand this data next to their financial data, especially with CSRD forthcoming; technical managers need to understand which regulations are in place so they can manage their operations accordingly and ensure CO2 emissions decrease, for example; etc.
Thoughts on the current state real estate market:
- Even though steps are being made in the right direction, we have to make the entire sector sustainable, and that is a tall order. Action should have been taken yesterday, and we should have already had our plans ready before that.
- I’m happy to see net zero commitments being made for 2050, 2045, etc., but we need to start looking more carefully and more critically at developing realistic roadmaps that can get us to these goals. And we have to make these plans quickly to prepare fiscally for upcoming regulations, take advantage of available subsidies, and ensure that we have the right skills and knowledge within our organizations.
- Real estate has been more or less the same for the past 100 years, but now we are going through a big transition in the drive to push the sector toward sustainability, which involves a number of challenging things like transitioning your entire team toward these objectives and practices, collecting data and making sure it is all in order, arranging the financing for retrofit and improvement measures, getting tenants involved, and looking at your divestment strategy.
- I’m positive about this challenge when I think about the opportunities that are available. For example, there is always a quick payback when putting solar panels on a building, so it can be a great investment for many reasons. There is also a growing market for circularity, so there is room for innovation and new players looking to demolish old, inefficient assets while making materials available for re-use.
The role Scaler has to play
- A new client of ours estimated that they spent 25% of their time on reporting (rather than actually working on implementing their ESG strategy). And what we see with all of the reporting requirements is that there is a lot of overlap in the data requirements. Auditors will be looking closely at this, so it is no longer realistic, or indeed good practice, to try to manage this in Excel anymore. This is where Scaler adds incredible value by managing this overlap, ensuring alignment, and allowing clients to use their time and resources efficiently.
- One of our development principles is to always be extremely flexible from the tech side, so that as new frameworks, regulations and market needs come along we can fully and quickly incorporate them into the platform.
- Another development principle is that the user experience has to be exceptional so that all stakeholders can use and understand the insights in the platform. This translates to visualizations that give real, actionable insights to our clients, so that they can bring their whole organization along with the ESG strategy.
- Machine learning and AI can enable a lot of insights. For example, with a residential building with 10% data coverage, we’re working with our data scientists to build excellent models that can accurately predict the rest of the data, and coupled with our tools, create budget-aligned roadmaps to net zero in 2050. That way, even assets with fewer resources and low data coverage can work toward these goals.
- Scaler manages all the calculations, algorithms and market definitions that go into the analytical insights, like CRREM, so that clients are always aligned with current market requirements automatically. And a gap analysis on data input for various use-cases is automatically apparent in our Data Collection Portal.
- Many of the other solutions on the market were developed around GRESB reporting 10+ years ago. This means they aren’t set up to evolve quickly and in an agile manner according to changes in the market and changing client needs. That’s how we can compete with their name branding and market saturation. We’re set up to respond to a much more rigorous and complex industry, wherein we are automating processes to save time and money and enabling organizations of all resources capabilities to work on ESG issues.
- An example of this is with the forthcoming CSRD which requires organizations to be able to report very flexibly according to their own double materiality. We’re building this for clients now so that they are ready when data collection becomes mandatory in 2024. It will be seamlessly aligned with other data collection and analytic processes in the platform and ready for assurance and verification.
I’m always excited to talk about the state of the industry and how we can come together to make a positive impact. Get in touch if you are similarly minded and want to hear about the great work my team is doing.
And thanks to Wouter for an interesting conversation. An icon in the Dutch real estate industry, Wouter is also the founder of Holland ConTech and PropTech and creator of the Dutch REBF Festival, the conference about the future of construction and real estate sectors in the Netherlands.