How submeters can unlock your data and boost your coverage
Almost 60 percent of real estate investment trusts (REITs) already have emission reduction goals, but verifying that progress has been made is another story. Ask any major company’s sustainability director, and they will likely tell you that gathering accurate data about a building portfolio’s energy use is nearly impossible. With properties spread out across the country and utility bills that account for multiple tenants, it can be time-consuming and laborious to collect data on a building’s energy use – and after all that, there is no guarantee the data will be accurate.
This lack of information is hurting investor relations and putting companies at risk of violating new utility usage and emission disclosure requirements. New York City recently passed Local Law 97, which requires most buildings over 25,000 square feet to adhere to stricter energy efficiency and greenhouse gas emissions limits, intending to reach net zero in the city by 2050. 23 states and counting have clean energy goals, including emission reductions requirements. And the U.S. Securities and Exchange Commission (SEC) is expected to make an announcement later this year around new Scope 1, 2, and 3 emissions disclosures for all publicly-owned companies.
Studies show that investors are also paying attention to sustainability and incorporating measurement tools like the GRESB Real Estate Assessment into their decision-making process. In fact, GRESB found in 2022 that over 75 percent of surveyed investors engage with their managers to encourage GRESB participation, with approximately a third of investors making participation mandatory. Data coverage directly impacts 19.5/100 points in the GRESB Real Estate Assessment, based on performance indicators such as energy consumption, waste management, water use, and GHG emissions.
So, how can REITs meet new regulations and appeal to investors without access to crucial utility data? Fortunately, there is a simple solution. By automating data collection through a submetering program, a building owner can monitor energy usage in real-time and be assured that the data is up to ESG, GRESB, or any other sustainability reporting standards.