Can Building Certification Improve ESG Performance?

Environmental, Social, and Governance (ESG) refers to the three-pronged approach to measuring the sustainability and societal impact of a company’s or organization’s business practices.

“Measuring” is the keyword in the above description. ESG programs are quantifiable and, once established, easily tracked. The following outlines how pursuing a building certification can lead to better reporting and tracing of ESG goals.

The Evolution of ESG

ESG grew out of another three-letter acronym making the rounds of corporate board rooms about a decade ago: CSR or Corporate Social Responsibility. CSR policies were aimed at promoting a positive influence on the world by operating in ways that enhance society and the environment. While the goals may be similar, there is a big difference between the two approaches.

CSR is focused on self-regulation to ensure an organization’s actions “do no harm,” but rather have a positive impact on society and the environment. Unlike ESG, CSR is more of a philosophy for firms to follow rather than a quantifiable and trackable program.

The transition from this outward-looking sustainability and responsibility approach to the ESG we recognize today began in 2010 when the International Organization for Standards (ISO) released voluntary guidelines to help companies make meaningful CSR plans. ISO:26000 helped codify the definition of social responsibility enabling organizations to evolve philosophies into actionable plans.

The Intersection of ESG and Building Certification

Since then, ESG has been the gold standard for companies trying to adopt a more ethical, sustainable, and socially responsible approach to business. A 2020 Celent report estimates $53 trillion in ESG assets by the end of this year. The increase in ESG popularity raises the question – How can building certifications improve ESG performance?

ESD has experience on well over 250 building certification projects. These certifications go hand in hand with ESG objectives because each designation has quantifiable elements that need to be met.

The following table outlines the synergies between ESG performance metrics (via the 7 Core Principles of ISO:26000) and three leading building certifications: LEED, WELL, and the WELL Health-Safety Rating. It illustrates a new layer of value certifications provide beyond reducing the built environment’s impact on climate change. The table is organized by Good, Better, and Best observations.

When evaluating the goals of an ESG strategy, determine the primary focus. Whether it is sustainability, carbon reduction, emergency preparedness, health and wellness, or other objectives, identifying the best type of building certification can optimize the value added to your facility.

This article was subsequently posted by Facility Executive.