Investors are paying close attention these days to sustainability in retail. The Global Real Estate Sustainability Benchmark (GRESB) Rating is a tool that helps determine high-level differentiation on the ESG (Environment, Social, Governance) performance of real estate companies and funds. That’s why it’s important to understand the ESG rating of your retail property or portfolio, which can help to increase your GRESB rating. If you’re not familiar with GRESB, it’s a for-profit organization with more than 190 members, 60 of which are pension funds and fiduciaries. GRESB data based on the organization’s survey findings are used to determine which investments are the most viable.
ESG RATINGS CAN MAKE OR BREAK YOUR RETAIL ESTABLISHMENT’S POTENTIAL TO ATTRACT INVESTORS
Financiers, endowments and pension funds across the world are increasingly integrating sustainability criteria into their investment strategy. The GRESB’s annual survey is increasingly a barometer of sustainability performance. In 2013, 543 property companies and funds participated in the survey, representing $1.6 trillion in gross asset value, and almost 49,000 assets in 46 countries. The survey covers energy and water use, as well as waste and carbon outputs. Based on their responses, companies receive a score from 0 to 100, calculated by an automated system after the data is validated. “Investors today are looking for companies with a high ESG performance and GRESB rating. In fact, there’s enough evidence to claim that companies with GRESB ratings have higher valuations and a larger pool of interested investors. GRESB’s goal is to provide investors with the ESG information they need to make more informed investment decisions, Nils Kok, the CEO of GRESB. The group has quantifiable results worldwide. In 2015, the GRESB community reduced greenhouse gas emissions (water vapor, carbon dioxide, methane, nitrous oxide, and ozone) by 3 percent, energy consumption by 2.9 percent and water use by 1.7 percent. It also increased on-site renewable generation by more than 60 percent from 2014 levels.
IMPROVING WATER EFFICIENCY IS ONE WAY TO IMPROVE ESG RATINGS
Water efficiency is one of the areas rated by GRESB. Fortunately, reducing water consumption is easier and more viable than ever. A host of existing technologies are available and proven to cost-effectively reduce water usage. These efficiency solutions generally fall into two categories: those that reduce the energy required to treat, distribute and collect/recycle water; and those that conserve and/or recycle water. Among the biggest water waste culprits are leaks and pipe breaks. One water resource manager pinpointed an area at a shopping mall that leaked as much as five gallons a minute, probably for years. That equates to 300 gallons an hour, 7200 gallons a day, and 2,628,000 gallons a year. Detection and water usage monitoring was installed to help identify these inevitable and pervasive leak and pipe problems.
Sanitary fixture upgrades such as aerated faucets and low-flush toilets, installing rainwater collection systems, practicing landscape irrigation/xeriscaping, and switching cooling towers from a single-pass to closed-loop system are the most common water management solutions. For example, upgrading a cooling tower to a closed loop system (where the same water is used five to seven times before being discarded) can result in a two to three-year payback. Some investments even have a payback period of less than one year through lowering water waste charges and energy costs.
WHY INVESTORS CARE ABOUT BETTER WATER MANAGEMENT
So why aren’t more investors initiating water efficiency projects? For some, the artificially low price of water is not significant enough to justify the investment. A sustainability manager at a large auto parts manufacturer noted, “It’s not worth our time. Water is too cheap and no one cares.” Investors worth trillions of dollars feel otherwise. Many have told their Fortune 500 portfolio companies that water issues are a major risk to business due to decreased global water quality and increased sarcity, regulation and compliance. As scarcity increasingly becomes a business risk, building owners may be required to proactively manage water use.
HYDROPOINT IS HARD AT WORK ON NEARLY 20,000 SITES, HELPING CUSTOMERS MEET WATER REDUCTION, EFFICIENCY AND SUSTAINABILITY GOALS
Smart irrigation controllers are one answer. Unlike traditional irrigation controllers that operate on a preset programmed schedule using timers, cloud-based smart irrigation systems monitor weather, soil conditions, evaporation and plant water use to automatically adjust the watering schedule to meet specific site conditions. Smart irrigation systems and controllers versus traditional irrigation controllers conserve water. Several controlled research studies indicate substantial water savings from between 40% and 70%.
HydroPoint weather-based and soil moisture sensor-based smart irrigation controllers are installed on nearly 20,000 sites to ensure smarter water use. HydroPoint’s technology provides the most accurate weather data in the industry, with a water conservation potential of as much as 95%. In one case, HydroPoint WeatherTRAK smart controllers exceeded the expectations of large California shopping center by reducing water costs by 60%.
Additional benefits realized from this HydroPoint mall deployment include:
- Reduced water usage by 675,000 gallons (60%) in 8 months
- Extended life of repaved parking lot by 30%
- Avoided property damage by eliminating runoff and standing water
- Conserved infinite resources
- ROI within one year
Click here to learn more about WeatherTRAK and other HydroPoint solutions or feel free to call us to discuss your specific needs at 800-362-8774.