Sustainability is becoming increasingly important for real estate companies. Implementing its principles is a priority for 73% of companies, according to CBRE’s survey ESG Organization. Are we ready for sustainability strategies in Poland? In addition, 86% of businesses see sustainability activities as having a direct impact on building the company’s image. More than 80% of companies have incorporated ESG factors into their business strategy, and 79% say ESG values are in line with their own beliefs. And yet, companies’ actions are more influenced by legislative pressure. Only six out of ten 10 companies are aware that without an ESG strategy they will not attract investors.
More and more of our clients are no longer just declaring the implementation of various types of activities in the areas of environmentalism, the well-being of their employees or management ethics, but also recognise the need to organise and plan these initiatives. In doing so, they are setting specific long-term and short-term goals and integrating ESG strategies into their business operations. We help these companies go through the entire strategic process, from analysing dual materiality, defining goals, planning a road-map and defining indicators to measuring and reporting progress.
Sustainability means a comprehensive approach to business management aimed at increasing profitability in the long term, with simultaneous care for the environment and natural resources (the ‘E’), concern for the health and well-being of people (social factor, the ‘S’), and ethical and transparent norms and policies for running a company (corporate governance, the ‘G’). ESG in business means taking these factors into account when building business strategy and creating shared value in close cooperation with all stakeholders.
ESG is much more than image
CBRE’s survey results indicate that as many as 86% of respondents associate the goal of conducting ESG activities with enhancing the organisation’s image. Legislative compulsion is also one of the biggest motivations. Organisations are more likely to implement changes under legal pressure and in the face of the possibility of penalties. This is admitted by 79% of businesses, which is why they are starting to act in this area. However, this translates into company strategies. 82% of businesses say ESG has been incorporated into their long-term business plans, while 79% of respondents stress that ESG activities are in line with their companies’ values. This proves that operating responsibly is not only a requirement of the market, but also a result of an organisation’s beliefs and DNA.
Investors focus on sustainability
The role of sustainability activities in attracting investors is not appreciated enough among business leaders. True, 62% of respondents agree that ESG supports a company’s profitability, but only one in five expresses a firm belief in this. And there are already clear examples in the market showing that activities in ESG areas, such as environmental concern, social responsibility or good corporate governance, are an important part of doing business. Companies that integrate sustainability values and activities into their operations often reap the benefits of sustained growth, greater customer and employee loyalty, and gain a competitive advantage in the long term.
Failing to include ESG in one’s strategy can cost companies a lot. Many investors exclude companies from their portfolios that do not meet the standards of this strategy, a fact that only six out of ten respondents are aware of. In their view, it is already apparent that companies that do not align with sustainability criteria risk losing their competitive edge and are perceived as riskier in the eyes of investors. And it is indisputable that companies that don’t integrate ESG issues into their strategies may have problems attracting business partners and financing, building customer loyalty, and consequently building their competitive position.
Legal regulations are a challenge for companies
What emerges as a real challenge is the need to involve the entire team in ESG topics and to change employees’ attitudes toward sustainability – so that they stop thinking of ESG goals as an additional obligation or another management invention, and recognise the real impact of environmental and social issues on their business and bottom line. It is also important to include ESG performance in the Key Performance Indicators (KPIs) that boards and executives are held accountable for.
Another challenge is the lack of good quality data and developed processes to collect it. Automating these processes will be one of the most significant challenges and tasks for corporations in the area of sustainability in the coming years. All the more so as the requirement for non-financial reporting, resulting from the EU Directive published in December 2022 (the CSRD), further exacerbates the need to measure the effects of actions in ESG areas and express them in data – numbers, indicators, trends. The CSRD stipulates that as early as 2026, non-financial information will be disclosed by all companies with more than 250 employees. The Directive also sets a common standard for non-financial reporting (known as ESRS), and introduces mandatory auditing of reports by independent third-party institutions. This further reinforces the need for access to good quality data and the involvement of employees from many areas of the organisation in its collection.
