In our latest Spotlight interview, we spoke with SIERA’s Head of Growth, Helen Cave-Penney.  SIERA is the leading ESG data management platform for real asset financial professionals. Built by EVORA Global ESG experts and niche to the real asset investment market, SIERA is designed to deal with today’s stringent reporting requirements and enables investors to achieve their sustainable finance goals.

Helen explains what has led to SIERA being Europe’s leading ESG data management platform, the differences in how ESG is being approached in different countries, how SIERA is helping companies to achieve Net Zero carbon targets, and she gives advice to those considering building an ESG strategy.

Q:What makes SIERA Europe’s leading and most powerful ESG data management platform used across 23 countries?

A: SIERA’s development started 8 years ago in response to requirements from EVORA’s ESG consultants as well as EVORA’s clients. The platform was self-funded by the EVORA business and its founders themselves.

SIERA has evolved over time to respond to the needs of some of the largest/most influential real estate organisations to provide a platform that is multilingual, has an open API to work with wider solutions, and is forward-thinking so that climate risk and ESG factors can be factored into financial decisions rather than clients needing to rely on historical data.

SIERA’s development has been driven by real estate ESG consultants themselves in conjunction with clients requirements which provides the market with a logical fit for purpose solution which is flexible to adapt to changing legislation and reporting demands.

Q:As a global company, what are the differences you are seeing in how ESG is being responded to from one country to another? How does the UK property industry compare?

A:ESG in the EU is being progressed in three intersecting spheres – Finance; Property; and Data – and at three levels: Corporate; Fund; and Asset/Building.

The ground-breaking EU Action Plan for Sustainable Finance regulatory framework is driving the agenda for how ESG is being incorporated into investment decision-making. With the UK following suit with its own take on ESG disclosure. The new FCA rules for climate risk disclosure has set the standard for other major markets to follow in the adoption of the TCFD recommendations. And the US SEC has just started a consultation on similar rules.

At a property level, the Nordic countries have for decades set the most advanced standards for engineering and designing the greenest buildings. This expertise is being exported worldwide. Building regulations in Europe vary widely and that can be seen clearly in energy and carbon performance benchmark data, with Britain’s performance on energy efficiency lagging well behind.

When it comes to ESG performance data from buildings, France is setting a new standard for Europe. Requiring mandatory disclosure of energy and carbon performance in a similar way to what the USA has been doing for years. In the USA they have a better understanding of whole building performance, whilst in the UK many property owners have to estimate most of the consumption data because this is being metered by tenants separately from the main meters. This presents a challenge for all of those European property investors who have made Net Zero Carbon commitments and now need to understand what actions are required to decarbonise the operations.

When it comes to other ESG topics and we look at other international markets, whilst they may be lagging behind on climate change they have other issues front of mind. Diversity, equality and inclusion (DEI) is a high priority in the USA, and health and wellbeing is front of mind in Asia, particularly regarding air quality. A global ESG strategy and software must respond to different investment priorities in different markets.

Q:How does the SIERA platform help property companies achieve their Net Zero Carbon Target?

A:Countries across the world have introduced NZC targets, with a minimum required target to achieve them by 2050, but a requirement to get to more than halfway to this target within the next 10 years if we are to stand a realistic chance of achieving net zero. To be able to do this, organisations need DATA. Data to understand the performance of their buildings and assess their impact on the environment. Data to be able to make informed decisions. That’s where SIERA comes in. SIERA’s NZC module helps businesses find their optimal pathway to NZ by reducing carbon emissions. It uses forward looking data to explore future scenarios.

The Net Zero Carbon feature in SIERA allows you to see the CO2 emissions of a fund, group of assets, or a single asset. It enables you to use a list of yearly targets to plot a pathway to reducing emissions for each to zero by 2050.  

SIERA also enables you to compare the reductions of CO2 usage against science-based targets and market benchmarks and see the effect grid carbonisation and renewable energy sources have on the data.

This means you can use the data to input into graphs in the feature to plot a course of action that will lead the fund or asset to a carbon neutral 2050. In addition to this, the graphs will also give you other key information, such as at what point an asset becomes stranded due to its carbon emissions. This helps to identify outliers in the portfolio and inform financial and investment decisions to reduce potential stranding risks as part of asset business planning and ensures appropriate ESG decisions are made within the investment lifecycle to preserve asset value.

More info in this blog: SIERA’s new Net Zero Carbon feature gets you ready for 2050 – EVORA SIERA and this video: Achieve net zero carbon with SIERA – EVORA SIERA

Q:Evora Global regularly produces market intelligence reports on ESG, how have you seen the attitudes towards ESG changing over the last few years, and are we now finally seeing the property industry play their part in tackling the climate crisis and social issues?

In the last decade, the concept of sustainability has gained prominence. At EVORA we believe, in this decade, that sustainability will mature from a concept to regulations to actions.

With increased regulation such as the EU SFDR and the adoption of global standards such as the TCFD, together with a general movement to net zero carbon, we have certainly seen attitudes towards ESG changing. We have also seen double-digit growth in participant uptake in GRESB. This has been shown with the uptake of SIERA, as a platform whose main aim is to make sustainability data more manageable and the intelligence within it easier to see. SIERA, for example, contains a lot of the data required for a GRESB submission as well as monitoring the impact of actions and identifying potential improvements.

 It is difficult, though, to get a true sense of urgency and commitment from the market with regards to the risks of climate change, the impending transition to far tougher regulation and the trend to integrating ESG into investment decision-making.

In our latest market intelligence report 92% of respondents consider ESG to be materially important, and 75% said they always utilise ESG data for investment decision making – something we have seen in practice through the uptake of our ESG data management platform, SIERA.

From perception and statistics in our market report, you’d think the real estate industry had made serious headway to tackling the climate issue. But is this really the case? During our Insights workshops with global real estate investment firms, on being challenged on their actual ESG performance, it was considered to be an order of magnitude below their GRESB scores.

When you start to dig a bit deeper into the survey there are some more startling results. Only 24% of respondents said they had ESG-linked incentives that have direct financial implications on staff remuneration, and only 40% had ESG representation on the investment committee. In the workshops it was commented that ESG risks raised at the investment committee rarely created a red line, more of a blurred amber one; deployment of capital was seen as more important. 

Equally, 86% of respondents questioned the quality of their ESG data and did not consider it ‘investment-grade’. With 75% always utilising ESG data for investment decision-making, we must challenge how seriously the insights of that data are taken

The reports mentioned above can be found  here https://evoraglobal.com/brochures-guides-and-reports/

Q:As sustainability consultants what advice would you give to those starting to build their ESG strategy? 

A:Everyone is in a very different stage in their ESG journey and for those starting out, the best place to start would be by looking at overall corporate ESG strategy and instilling those best practices through the business to asset level. Completing a gap analysis to identify best practice and identify what your peers are doing by way of benchmarks and then set clear goals and objectives. Obtaining stakeholder engagement from the outset is key. ESG data is key to drive your strategy. This is why SIERA was built – to provide actionable insight into a clients portfolio so that decisions can be made quickly to make improvements providing the best outcome possible. ESG is a fast moving market so upskilling is essential – we offer a number of free webinars to help the real estate world keep on top of the latest information hosted by our consultants – https://evoraglobal.com/evolve/ . Anyone is welcome to join these.