{"id":15947,"date":"2022-08-30T13:44:38","date_gmt":"2022-08-30T11:44:38","guid":{"rendered":"https:\/\/khr.dk\/?p=15947"},"modified":"2026-10-06T14:02:47","modified_gmt":"2026-10-06T12:02:47","slug":"esg-reporting-in-the-real-estate-sector","status":"publish","type":"post","link":"https:\/\/khr.dk\/en\/esg-rapportering-i-ejendomsbranchen\/","title":{"rendered":"ESG reporting in the real estate industry - why ESG is important for real estate developers and investors"},"content":{"rendered":"
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\"ESG\"
ESG<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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The non-financial annual report<\/h3>\n\n\n\n

ESG reporting can be seen as a kind of non-financial annual report. Rather than financial performance, ESG reporting focuses on how the company supports a \u201dsustainable bottom line\u201d as measured against environmental, social and governance criteria. Both the statutory ESG requirements and the growing political and public attention surrounding ESG focus areas naturally lead to an increasing demand for projects and buildings where ESG is a priority.<\/p>\n\n\n\n

But what exactly does ESG entail in the context of the property sector, and how can a developer or investor, in practice, set an ESG target and incorporate ESG considerations into the various project phases?<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"meeting
ESG<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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What does ESG reporting mean for the construction and real estate sector?<\/h3>\n\n\n\n

ESG is a concept that is approached differently depending on the sector and the specific project. When we discuss ESG in relation to an individual property or property project, the focus is particularly on the environmental and social aspects, which we can positively influence as architects<\/a> and building consultants<\/a>. That said, ESG reporting depends on a sound data foundation, and this is where the governance aspect is crucial. The company behind the property must ensure a structure that makes the relevant data available, so that it can be assessed in real time and progress measured.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"ESG
ESG Environment<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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E for environment<\/h3>\n\n\n\n

Typically, the \u2018E\u2019 is associated with a building\u2019s carbon footprint. This encompasses building materials, the construction process itself and subsequent operation, but also climate resilience, which is becoming increasingly relevant as the consequences of climate change become more apparent. It is a complex calculation that, ideally, should be carried out across the building\u2019s entire life cycle, and which requires us, as architects, to think long-term and create robust architecture that can adapt to the new challenges, requirements and technical possibilities that are certain to arise, but which we do not yet know.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"ESG
ESG Social<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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S for social<\/h3>\n\n\n\n

The \u2018S\u2019 \u2013 the social aspect of ESG \u2013 covers, amongst other things, wellbeing and health. In the case of a residential property, this naturally includes the residents and the local community affected by the building. The conditions for staff on the building site during the construction phase itself, and even the conditions at the sites where the building materials are produced, can also be taken into account where possible. Labelling schemes such as FSC<\/a>, Nordic Ecolabel<\/a> or EU Ecolabel<\/a> might be of help.<\/p>\n\n\n\n

It is an often-overlooked point that a socially successful project will, as a secondary benefit, result in a reduced carbon footprint, because it has a positive impact on factors such as tenant or owner turnover, the need for renovation and, ultimately, the building\u2019s lifespan.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"\"
ESG Governance<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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G for governance<\/h3>\n\n\n\n

When discussing \u2018G\u2019 for governance, the focus is, for example, on diversity, inclusion and culture within the ownership and property management community. At the same time, the management dimension is also crucial to ensuring that an ambitious sustainability strategy is established in the first place, and that well-founded ESG reporting is made possible.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"\"
ESG Governance<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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So, we\u2019ve now established a definition of ESG, but how do you ensure and document that your own assets support the company\u2019s ESG objectives? We\u2019ll take a closer look at this in the next section.<\/h3>\n<\/div>\n<\/div>\n\n\n\n
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\"Landscape
Landscape Architecture<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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How to measure ESG?<\/h3>\n\n\n\n

ESG may seem like a broad and intangible concept, where \u2013 as with CSR (Corporate Social Responsibility) \u2013 it is up to each individual company to define its strategy and objectives, as well as how progress is measured. This makes it difficult for investors and other stakeholders to assess and compare the property or project.<\/p>\n\n\n\n

It is therefore important that you present your ESG methodology clearly, so that your stakeholders know what you are measuring and how. Below, we present some suggestions for frameworks and tools for assessing ESG, which can be used either individually or in combination, and which can also help you to structure your ESG report. Which solution is right for you depends on your organisation, your market(s) and your investors.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"EFRAG
EFRAG Sustainability reporting standards<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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\"European Sustainability Reporting Standards\" on the way<\/h3>\n\n\n\n

As part of the Corporate Sustainability Reporting Directive, the EU has decided to tighten ESG reporting requirements and expand the scope of those to whom they apply from 2024. This means that EFRAG<\/a> The EU is in the process of drawing up specific \u201dEuropean Sustainability Reporting Standards\u201d to serve as guidelines. You can see the first draft of the ESRS and the public consultation process<\/a> here.
Until they are ready, you will need to develop your own standard. Below are some ideas on which tools and concepts you can draw upon.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"GRESB\"
GRESB<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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ESG benchmarking tools<\/h3>\n\n\n\n

There are various ESG benchmarking tools available on the market that make it easy for you to document and evaluate your projects. By using a recognised tool, you\u2019ll gain a clear roadmap to achieving ESG compliance and an independent assessment with a score that\u2019s easy to communicate and understand.<\/p>\n\n\n\n

Many of our customers use LEED<\/a> or GRESB<\/a>, but there are several other good alternatives aimed specifically at the property sector; for example Energy Star<\/a> and Ecore<\/a>. You may wish to investigate which tool is most widely used and recognised amongst your stakeholders, or which tool best supports the assessment of your organisation\u2019s ESG objectives.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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ESG objective<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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Start with an ESG objective<\/h3>\n\n\n\n

If you do not yet have an ESG target, the EU\u2019s taxonomy or the UN\u2019s Sustainable Development Goals can give you an overview of possible areas of focus. Select goals and targets that are realistic for you to support, and draw up a plan for how to do so. Your goals and plan can easily be developed on an ongoing basis, as opportunities change and you gain further insight from your experiences.

Here is a brief introduction to the EU Taxonomy and the UN Sustainable Development Goals, respectively, including links to more detailed resources aimed at the construction and property sectors.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"EU
ESG objective<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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EU Taxonomy \u2013 follow the sustainability criteria<\/h3>\n\n\n\n

The EU\u2019s taxonomy is a green classification system which, in short, translates the EU\u2019s environmental and climate ambitions into concrete, common sustainability criteria. By means of EU taxonomies<\/a> As a business or investor, you will receive guidance on selecting the types of economic activity that both contribute to at least one of the EU\u2019s climate and environmental targets and, at the same time, do not have a negative impact on other targets.<\/p>\n\n\n\n

In this way, the taxonomy is intended to promote green development and combat greenwashing. Criteria have been drawn up specifically for the construction sector, and you can download Dansk Standard\u2019s introduction to the EU taxonomy as applied to the construction industry free of charge. here<\/a>.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Uderum
Uderum Sct Hans<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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Net Zero \u2013 use the World Economic Forum\u2019s 10 principles for green building<\/h3>\n\n\n\n

An increasing number of companies are committing to achieving carbon neutrality within a given number of years.
Net Zero can serve as your guiding principle when it comes to the key environmental aspect of ESG reporting, helping you to identify which of your activities are hindering your green ambitions, or how you can offset unavoidable CO\u2082 emissions through other measures. <\/p>\n\n\n\n

The World Economic Forum has published this guide with 10 principles<\/a> and an accompanying action plan to help stakeholders in the property sector achieve net-zero targets across their property portfolios.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Sustainable
Sustainable Development Goals for the real estate sector<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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Sustainable Development Goals \u2013 the 17 global goals as they apply to the construction sector<\/h3>\n\n\n\n

The Sustainable Development Goals are 17 specific goals, broken down into 169 targets, which the UN\u2019s member states have committed to achieving by 2050 in order to support sustainable development worldwide. The goals range from the very basic, such as ending hunger and poverty, to goals concerning sustainable energy, health and well-being, sustainable cities, decent jobs and economic growth. You can view all the goals, targets and indicators here<\/a>.<\/p>\n\n\n\n

The Danish Architects\u2019 Association and the Danish Association of Building Owners have developed a dialogue tool that guides the user through all 17 Sustainable Development Goals, with the option to set strategic objectives, sub-goals and criteria where appropriate. Use the SDG Barometer<\/a>.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"ESG
ESG software<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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ESG Software<\/h3>\n\n\n\n

ESG software helps companies to automate data collection, manage the reporting frameworks for ESG initiatives and produce reports.<\/p>\n\n\n\n

There is a wide range of options available on the market. Which one is right for you depends on your organisation and the initiatives you need to keep track of.<\/p>\n\n\n\n

Measurabl<\/a> and BuildingMinds<\/a> are two specific software solutions for collecting ESG data, which are widely used within the property sector. The solutions can be configured to make it easy to report to organisations such as GRESB or CDP, depending on the wishes and needs of your stakeholders.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Green
Green spaces are becoming part of the architecture<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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LCA \u2013 carry out a life cycle assessment of your building project<\/h3>\n\n\n\n

LCA stands for Life Cycle Assessment. LCA is a method for assessing the potential environmental impacts and resource consumption associated with a building project. The life-cycle approach shifts the focus from the conditions surrounding the finished building to encompass the entire life cycle of the building. By carrying out LCAs on all the buildings in your portfolio, it becomes easy to compare their sustainability profiles and identify where the project can be optimised towards a more sustainable profile, for example by replacing certain materials or production methods. LCA therefore fits perfectly into an ESG analysis and report, and you might as well get started: from 2023, LCA calculations will be mandatory for all new construction projects. For buildings over 1,000 m\u00b2, there is a requirement for a CO\u2082 limit corresponding to 12 kg CO\u2082-eq\/m\u00b2\/year. You can read more in the national strategy for sustainable construction<\/a> or see this introduction video<\/a>.<\/p>\n\n\n\n

There are various platforms available that you can use for LCA calculations. The Danish Agency for Housing and Planning, in collaboration with Build at Aalborg University, has developed a platform for LCA calculations that you can use: LCA Construction <\/a>and One Click LCA<\/a> is an alternative that also includes a module specifically designed to meet the LCA requirements set out in the Danish Building Regulations.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"ESG
ESG analysis<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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ESG in the different phases of a real estate investment<\/h3>\n\n\n\n

It is one thing to have an ESG objective and a framework for ESG reporting; it is quite another to translate this into concrete actions in day-to-day operations within the property or construction sector. In this section, we take a closer look at how you can work towards a stronger ESG profile in the context of property investments.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"ESG
ESG screening<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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Screening of existing properties<\/h3>\n\n\n\n

Use your ESG objectives as a checklist when screening properties or projects. You may be able to rule out a potential investment at this stage, thereby saving your company a great deal of time.

We would be happy to assist with an effective technical due diligence process that also takes your ESG objectives into account.<\/a><\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Gr\u00e5br\u00f8dre
Gr\u00e5br\u00f8dre School, exterior view before renovation<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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ESG due diligence<\/h3>\n\n\n\n

If the property qualifies for an actual due diligence<\/a>, this is where you can take an in-depth look at the building stock and examine energy consumption, tenancy arrangements and the risk of climate-related challenges.<\/p>\n\n\n\n

If your company has ESG targets, it may be worth calculating how the new investment would affect your overall score, and you can work with your due diligence adviser to define the key performance indicators that are essential for you to meet your targets.<\/p>\n\n\n\n

Host KHR<\/a> We have extensive experience with due diligence investigations, and ESG analyses are increasingly becoming part of our service offering. Some of our clients have developed their own requirements for the content of their ESG due diligence, but KHR can help you establish a framework. Similarly, we work with you to establish a reporting format so that you can make the best possible use of our findings in your future work.<\/p>\n\n\n\n

Regardless of the format, you will typically receive a comment and\/or a risk classification for each focus area. We can estimate the cost of rectifying deficiencies and making improvements, as well as the estimated savings this will bring, within a given timeframe.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Building
Building site Haukeland hospital<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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ESG in new build projects<\/h3>\n\n\n\n

You cannot avoid leaving a significant carbon footprint when building a new property, but the project\u2019s ESG profile can be greatly optimised if you take the various parameters into account right from the start. We would therefore strongly recommend that you partner with a architectural consultant<\/a>, which can help you choose the best solutions for creating an environmentally and socially sustainable project<\/a>. Precisely because property is such a long-term investment, it really pays to lay a solid foundation for sustainability in both the short and long term, so that the property \u2013 regardless of who owns it \u2013 will make a positive contribution to ESG.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Environment
ESG: Environment, Social, Governance<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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A driving force for a sustainable property sector<\/h3>\n\n\n\n

ESG and the increasing requirements for ESG reporting may be seen as an additional burden placed on the property sector, but it is important to bear in mind that ESG is a key driver of more sustainable development, both environmentally and socially. Properties account for 40 per cent of energy consumption in Denmark, and the physical environment plays a crucial role in people\u2019s well-being; thus, the relevance of a greater focus on sustainability through, for example, ESG is indisputable.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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\"Building
Building consultant Peter Nielsen<\/figcaption><\/figure>\n<\/div>\n\n\n\n
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Let us help you with ESG<\/h3>\n\n\n\n

At KHR Architecture, we keep abreast of developments in ESG requirements, tools and standards within the property sector, so that we can advise you on your specific acquisitions or construction projects.<\/p>\n\n\n\n

As architects, our focus has always been on creating architecture that ensures a long lifespan and a sustainable profile in terms of function, construction techniques and materials.<\/p>\n\n\n\n

Reach out to us<\/a>, if we are to help you with ESG screening and carry out ESG due diligence<\/a> on an existing property or help you create a future-proof, sustainable<\/a> new construction.<\/p>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

ESG reporting measures the company's sustainable bottom line. The focus on ESG is increasing, as is the demand for real estate projects where ESG is a priority.
\nWe take a closer look at how ESG can be put into practice in the real estate sector.<\/p>","protected":false},"author":4,"featured_media":16131,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[88,285],"tags":[],"class_list":["post-15947","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-announcements","category-baeredygtighed"],"acf":[],"_links":{"self":[{"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/posts\/15947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/comments?post=15947"}],"version-history":[{"count":6,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/posts\/15947\/revisions"}],"predecessor-version":[{"id":22715,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/posts\/15947\/revisions\/22715"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/media\/16131"}],"wp:attachment":[{"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/media?parent=15947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/categories?post=15947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/khr.dk\/en\/wp-json\/wp\/v2\/tags?post=15947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}