Meeting net zero targets, ensuring worker well-being and improving supply chain ethics - they're all top of corporate agendas right now. Bosses are calling on FM teams to create and track KPIs that show compliance with tough, new standards. But many FM teams just don’t have the tools and resources they need to generate the data for a new age of ESG.
What does ESG stand for?
ESG stands for the Environmental, Social, and Governance targets that companies are adopting to become more sustainable and ethical in everything they do.
They are there to meet increased customer, employee and investor expectations about environmental commitments and corporate behaviour.
Why is ESG such a hot topic?
Governments and companies are signing up to new international standards and agreements designed to tackle:
- Climate change
- Pollution and landfill
- Worker well-being
- Energy efficiency
- Responsible supply chain management
- Sustainable business practices
In the UK, Facilities Management is guided by a myriad of ESG-related legislation and standards. The Environmental Protection Act 1990, Climate Change Act 2008, and new national Net Zero targets are shaping greater sustainability efforts. Social obligations are governed by the Health and Safety at Work Act 1974, Equality Act 2010, and the Modern Slavery Act 2015 that prevents labour exploitation. Building standards like BREEAM, LEED, SKA & WELL demand environmental best practice from those charged with building management. More action and emission regulation is likely to come as the climate crisis worsens.
Why is facilities management so important to ESG strategy?
Just think what is in the FM remit:
- Managing asset lifecycle and end-of-life disposal
- Recycling policies
- Ensuring H&S standards are maintained
- Managing supply chains
- Controlling energy use across estates
- Overseeing procurement of assets and contractor services
So, it’s no wonder that the C-Suite is looking to FM to help them demonstrate to their board, regulators and employees that they are doing what’s required of them when it comes to ESG.
Most FM don’t have the digital tools they need for ESG
The trouble is FM have, historically, been behind the curve in terms of digital transformation, so meeting these new reporting and accountability standards is a tough ask.
The latest offices built to Grade A standards are bringing smart office tech and integrated IoT into the mainstream but not every company has that luxury.
Uptake of integrated smart building technology is lagging in the UK. In this recent RICS research, only 34% of UK businesses said they had smart tech installed in their buildings to monitor their use of energy and improve efficiency.
A historic lack of digital oversight and governance in most FM teams is also proving a real challenge for businesses who want to measure and optimise ESG success.
What do you need to make these goals a reality?
What are the three pillars of ESG?
‘E’ is for Environmental sustainability
These goals include:
- Reducing energy consumption
- Increasing reuse and recycling
- Preventing pollution
- Developing green infrastructure
- Using more sustainable products
- Using renewable energy sources
Facilities Managers are central to delivering on new and ambitious green targets imposed by companies . From implementing new procurement rules on single-use plastics to improving asset efficiency and cutting emissions.
What’s standing in the way?
But you don’t need expensive IOT solutions to start tracking and reporting on sustainability goals. You just need tools that can help you implement practical solutions for communication, process control and data gathering.
How a CAFM can help:
The right CAFM can bring data and discipline to asset and building management without the need for expensive IoT projects.
Look for configurable workflow and communication software that drives action and gathers data:
- Set up mobile workflows to regularly service and report on state of equipment
- Set up PPM routines to manage equipment efficiency and improve performance
- Ensure equipment is regularly inspected against relevant standards and regulations
- Improve trend analysis to recognise when equipment and facilities are becoming inefficient
- Increase first time fixes - so problems don’t drag on and callouts are reduced
- Control asset lifecycle to manage replacement with more sustainable ‘next gen’ products
- Integrate reporting from HVAC systems to monitor for inefficiencies and trigger maintenance
- Set up recycling and reuse processes for assets
S - is for social sustainability
These goals include:
- Supporting diversity and accessibility within the organisation
- Improving working conditions for employees (making them safe and comfortable)
- Increasing sustainability decision making through the supply chain
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Protecting human rights and labour standards throughout the supply chain
Whats standing in the way?
Diversity and inclusion goals can be difficult to set, measure and maintain. Supply chains have traditionally been managed through different software applications and in an informal way. Historically, contractors couldn’t be easily held to account on environmental measures.
How a CAFM Can help:
Supporting accessibility and diversity with a CAFM
Accessibility requirements can be documented centrally to implement and prove compliance
- Risk assessments conducted and acted on
- Regular inspections and outcomes recorded in one place
- Remedial action taken
Businesses can also use a CAFM to start implementing standards to support neurodiversity in the workplace,
- Monitoring key environmental KPIs (such as temperature and air quality).
- Gathering feedback and data to identify challenges for neurodivergent users
- Responding to internal demand for quiet zones, flexible work stations etc
Ethical supply chain management
FM software can be put in place to ensure contractual information, work permits and other vital documentation is stored centrally and automatically reviewed at critical moments.
Workflows can be put in place to ensure procedures for selecting supply chain providers to meet environmental requirements, with regular reviews ensuring they are maintaining standards.
G - is for governance
These goals include:
- Increasing corporate accountability to maintain ethical decision-making
- Systematic risk management (to identify and formalise ESG controls)
- Improving reporting to set and track ESG performance
What’s standing in the way?
Fragmented financial and performance reporting can lead to a lack of transparency in procurement and supply chain management that threatens good governance.
How can this be fixed?
A CAFM can bring much-needed structure and transparency to compliance documentation, with easy to use document storage and control options to ensure process is always followed. It can help you put in place robust workflows for supplier appraisals, performance and financial decision-making.
How a CAFM can help:
- Financial processes are followed
- H&S routines are in place and followed
- Risk assessments are completed and reviewed
- Supply chains are appropriately managed
- Data is generated and stored
- Financial data is subject to approval and review
The danger of greenwash
ESG needs to be more than greenwashing. Regulation is demanding more of us. Employees and consumers expect us to deliver a measurable difference to the planet and our communities. But smart buildings and IoT cost; they take huge amounts of time and resource to design and configure with ERP and other software.
A smart and agile CAFM, on the other hand, can help you drive action, gather data and analyse performance faster. It can give you a strong foundation of process and communication upon which you can build your analytic and compliance capabilities. The right CAFM can help your business grow greener and more accountable at the pace you need and a price you can afford.
