ESG’s main application has been regarding large publicly traded companies and investments, however, its trickle-down effects will be felt at every level of business. Consumers are starting to use ESG as a part of their decision-making process when deciding on what products and services they use, this includes where they live.
The Environmental portion of ESG is one of its biggest focuses but also one of its greatest areas of opportunity when it comes to the MDU industry. Multifamily communities of all sizes rely on energy to function and there are many ways to reduce the amount of energy being used and reduce the carbon footprint without breaking the bank.
How PropTech Implementation Can Help Your ESG Score?
There are many ways to help your ESG score. While the Social and Governance areas are largely managed at the organizational level, the Environmental portion can be handled on the asset level. Various forms of existing PropTech can be implemented at your asset(s) to reduce your carbon footprint, increase overall energy efficiency, and reduce waste.
Following are three PropTech items that can be implemented at an asset quickly and can help increase your ESG rating:
- Smart Thermostats– this technology has been around for several years, and the market has matured with several options available. Smart thermostats help individual units, and, by extension, the entire community run more efficiently. These devices allow for scheduling and remote control of temperature levels through mobile apps to help reduce energy consumption during work hours, when a unit is vacant, or during peak usage hours. This reduces the overall carbon footprint by reducing energy consumption.
- Smart Lighting– Smart lighting offers many of the same energy reducing features as smart thermostats. Being able to adjust lighting levels of smart bulbs can reduce energy consumption during daylight hours when a lower level of light may need to be used in certain areas of a unit. Automated scheduled and remote access through a smart device can also increase efficiency by setting a schedule based on daylight hours and by allowing residents to turn off lights that may have been left on by accident.
- Leak Detection Sensors- Water conservation has become a large focus in recent years with climate change affecting weather patterns and seasonal temperatures. Available water supplies that used to be reliable have been reduced due to droughts which has put more importance on reducing unneeded consumption. Water leaks can cause physical damage to a community but also increase its water usage with unnecessary amounts of water being wasted in the process. Leak detection sensors are an intelligent and low-cost way to get ahead of potential leaks and damage while also avoiding additional water consumption.
Reducing the carbon footprint and increasing the efficiency of your asset doesn’t have to be a huge undertaking. By utilizing PropTech to reduce energy consumption at your asset has the potential to help you beyond an ESG score. Implementing PropTech at your asset can benefit you three-fold by:
- Ensuring you are ESG ready by getting a head start on reducing your carbon footprint and increasing overall efficiency
- Attracting more attention by providing features that renters are actively looking for and expect in communities
- Increasing NOI by being able to increase rental rates to include the features of the PropTech inside the unit