Insights

Environmental, Social and Governance (ESG) Practices at
RMZ Office

Over the years, there has been a change in the collective understanding of the role of business in society. The earlier paradigm focused on business as an entity that extracts resources from society and creates wealth for its investors. Today, the understanding has changed and there is a growing realization that businesses are embedded in social, economic and natural systems, and cannot be viewed in isolation.

The social and natural systems that society at large depends on are facing a high degree of risk due to resource scarcity, climate change, social inequality and technological disruptions. The Task force on Climate Related Financial Disclosure (TCFD) says the risks to business are both physical and transitional. Physical risk impacts the operations and supply affected by factors as listed earlier. Transition risk impacts the reputation of the brand. These types of risks are caused due to potential changes in regulations, such as taxes on emissions, water or other raw material use.

On the flip side, alongside these risks are opportunities for innovation, resilience, efficiency and stakeholder confidence. The response of the business community to these changes includes the adoption of corporate sustainability principles that encompass the Environmental, Social and Governance (ESG) practices.

ESG practices relate to a large group of rules around working together dependably that includes all key factors governing business continuity. Studies prove that there is a positive relationship between the ESG performance and stock performance of companies.

ESG in the Real Estate Sector

The real estate sector has been one of the key drivers of the economy and social mobility but is also one that is resource intensive and has a high contribution to global carbon emissions. Leading corporates in this sector are working on infusing ESG principles into their business. A Global ESG real estate investment survey was conducted by UNEP FI, including 44 companies across the world, to understand the influence of ESG integration in real estate investment decision making and management, which found that 93% of investors include ESG criteria in their investment decisions (Bentall Kennedy, 2019). The Sustainability Accounting Standards Board (SASB) has developed an indicative list of issues for the real estate sector which are divided into 3 aspects - Social Environmental and Governance. Social aspects include access and affordability, product quality and safety, labour practices, employee health and safety. Environmental aspects include GHG emissions (Greenhouse Gases), air quality, energy management, waste, water and hazardous materials management, and physical impacts of climate change. Governance aspects include business ethics, critical incident risk management, systemic risk management, product design and lifestyle management, and business model resilience.

Benefits of Integrating ESG In Real Estate Firms

Green building initiatives influence value creation and have resulted in an increase of 12% in rentals. 65% consider ESG Programs as it enables real estate to identify and mitigate risks. There is a link between the working environment and employee productivity. Studies show a 47% increase in positive sentiment that integrating ESG practices has resulted in creating a healthy workplace environment.

Greenprint is a leading consortium of real estate firms, investors and strategic partners focused on enhancing the environmental performance of its member firms. A study carried out by Greenprint in 2018 shows that member firms invested a total of $40.7 million in projects towards energy efficiency, renewable energy, waste management and advanced technologies to lower operating costs, energy use and carbon emissions.

ESG at RMZ

RMZ is developing strategies that identify and mitigate risks. Their strategies are developed considering industry trends. They are concerned with ESG risks related to climate change, environmental management practices, working conditions, occupational health and safety, anti-bribery corruption practices and compliance. Their project development process includes identification, addressing and monitoring risks at an early stage.

Sustainability Focus Vision of RMZ

RMZ’s sustainability vision is focused on green construction, ethical work practices, occupational health and safety, and competitive sustainability solutions. RMZ also carries out various environmental assessment studies (Environmental Impact Assessment) which covers air quality, noise quality, water quality and traffic monitoring, as per local regulatory requirements. RMZ adheres to all relevant regulatory compliance, which includes National Building Codes, Solid Waste Management and Handling, Construction and Demolition Waste Management rules etc. RMZ’s sustainability team drives the organization’s sustainability transformation. In addition, a ‘Green Committee’ is formed to engage employees across all operations to be a part of sustainability efforts. At RMZ, they are consistently embedding sustainable practices across operations to meaningfully craft the shaping tomorrow. The belief that sustainability is not just a concept of the future, but is rather the new norm and business imperative, is what drives stakeholder engagement efforts in the larger sustainability community. RMZ holds the largest portfolio of assets certified under LEED Arc, a leading green building rating system. RMZ have also become a WELL portfolio partner with International Well Building (IWBI). WELL certification is a premier standard used for buildings, to measure and validate the features that support and enhance human health and wellness.

Aim of RMZ

The aim of RMZ is to create built environments that are certified by recognized green rating certification bodies such as the US Green Building Council (USGBC) and Indian Green Building Council (IGBC). RMZ aims to meaningfully integrate ESG into their strategy, operations, value chain and culture.