Article | Intelligent Investment
Technology’s role in achieving ESG targets
With technology’s increasing footprint within our built environment today and in the future, CBRE’s Su-Fern Tan and Taronga Ventures’ Julian Kezelman explore its true potential in the ESG space.
January 17, 2024
Technology forms the fabric of everything humans interact with, including their built environment.
At the Property Council of Australia’s first Technology Summit in Sydney, CBRE’s Phil Rowland underscored the importance of harnessing the potential of technology to shape the diversity of our future surroundings.
“It's important that we make our industry more productive, our places and precincts more relevant and inclusive to our tenants and the public. This involves making our buildings more intelligent, softening the footprint on our environment and developing the capabilities that we'll need in the future to thrive in a technological society.”
Today’s technology is already being used to reach some of the boldest ESG (Environmental, Social and Governance) targets today by proactive building operators.
It’s a scenario in which Julian Kezelman, Innovation Director at Taronga Ventures, and Su-Fern Tan, Pacific Head of ESG at CBRE, understand the true potential of. During their Technology Summit keynote, the duo explained how technology was being used to maximise the ESG impacts on the built environment.
“We help them understand what that strategy looks like and then develop the roadmap to get there,” says Tan.
“Take property management for example. I can spend time in front of a BMS trying to diagnose a building and how we can run it more efficiently, but how scalable is that?
“With technology, I can analyse 200 buildings in a day, so it’s about trying to scale that impact. I think the role that technology plays when it comes to delivering sustainability is about scale, data and integration.”
The current client demographic for supporters of ESG and technology is diverse, ranging from the tech savvy through to those who are completely foreign to the concept. Their priorities commonly revolve around energy, water and waste efficiencies.
“Energy efficiency is essentially the old sustainability game that's becoming more mature. We're now starting to talk about water efficiency, waste, embodied carbon, and nature repair. It’s all interconnected, interdependent and getting pretty complicated, and underneath all of this lies the data.”
“Thanks to this smart technology, about three million dollars in damages was saved with the damage costing about three hundred thousand dollars to repair. It basically paid for itself.
“And there is technology which is ESG data-focused that helps increase governance. There is also technology which can make positive social impacts such as apps like Be My Eyes which can turn any user from around the world into a volunteer to help the blind with their daily challenges in real time.”
“We're certainly seeing a significant amount of capital invested into new technologies that can address the climate crisis,” says Kezelman.
“It's the biggest global challenge we're facing and cuts across all industries. At Taronga Ventures we are not an impact fund or investing purely for climate. But we are driven by the needs of those real asset owners that invest in us such as Dexus, Vicinity Centres and CBRE. The outcomes they want for their portfolios - and specifically ESG - has been a very strong through line to our mandate.”
And to what percentage is Taronga Ventures’ portfolio ESG focused?
“The majority. But we're cautious about not making any representations that can’t be substantiated. We are doing the leg work to help these early stage technology companies with their ESG measurement given they're busy building technology, winning new customers and growing rapidly.
“We're adding an extra layer of rigour on top to support them to measure the outcomes that they deliver from an environmental, social or governance perspective, where ultimately, their customers can claim those outcomes. It’s meaningful to our investors, our portfolio companies and the industry at large.
“Those emerging companies with innovative technologies are chipping away at the carbon problem and have a clear ability to measure their impact will have an advantage in the current fundraising climate.”
“It's going to be a long and slow process with incremental steps towards net zero,” he says. “Consultants and owners need to be able to trust this technology, even if it's validated elsewhere in the world.
“The future of addressing this problem will run over a 15-to-20-year super cycle and it has a long time to go but it's what's required given the enormity of its scale. It's the principal challenge of our time that we're more than willing to invest in.”
At the Property Council of Australia’s first Technology Summit in Sydney, CBRE’s Phil Rowland underscored the importance of harnessing the potential of technology to shape the diversity of our future surroundings.
“It's important that we make our industry more productive, our places and precincts more relevant and inclusive to our tenants and the public. This involves making our buildings more intelligent, softening the footprint on our environment and developing the capabilities that we'll need in the future to thrive in a technological society.”
Today’s technology is already being used to reach some of the boldest ESG (Environmental, Social and Governance) targets today by proactive building operators.
It’s a scenario in which Julian Kezelman, Innovation Director at Taronga Ventures, and Su-Fern Tan, Pacific Head of ESG at CBRE, understand the true potential of. During their Technology Summit keynote, the duo explained how technology was being used to maximise the ESG impacts on the built environment.
Technology’s role in ESG strategy
As the case for reaching net zero takes precedence across the commercial property sector, there’s been increasing demand for ESG solutions amongst clients, investors and tenants.“We help them understand what that strategy looks like and then develop the roadmap to get there,” says Tan.
“Take property management for example. I can spend time in front of a BMS trying to diagnose a building and how we can run it more efficiently, but how scalable is that?
“With technology, I can analyse 200 buildings in a day, so it’s about trying to scale that impact. I think the role that technology plays when it comes to delivering sustainability is about scale, data and integration.”
The current client demographic for supporters of ESG and technology is diverse, ranging from the tech savvy through to those who are completely foreign to the concept. Their priorities commonly revolve around energy, water and waste efficiencies.
“Energy efficiency is essentially the old sustainability game that's becoming more mature. We're now starting to talk about water efficiency, waste, embodied carbon, and nature repair. It’s all interconnected, interdependent and getting pretty complicated, and underneath all of this lies the data.”
How it can be measured using technology
Tan’s experience in executing smart building solutions has allowed her to witness how technology is used to tackle sustainability issues. As an example, smart water metering involves leveraging the meters scattered throughout the building in high water consumption areas such as bathrooms. These flow readings are computed via machine learning AI technology to determine the exact events happening in the building.“Thanks to this smart technology, about three million dollars in damages was saved with the damage costing about three hundred thousand dollars to repair. It basically paid for itself.
“And there is technology which is ESG data-focused that helps increase governance. There is also technology which can make positive social impacts such as apps like Be My Eyes which can turn any user from around the world into a volunteer to help the blind with their daily challenges in real time.”
Appeal of climate tech in the venture capital world
While there is still some way to go in the proliferation of climate tech, investors are increasingly directing capital into technologies with greater potential to reduce emissions. This has made it one of the fastest growing categories globally alongside artificial intelligence. On the theme of ESG and technology, it’s important to know where climate tech sits on the radar of venture capital firms.“We're certainly seeing a significant amount of capital invested into new technologies that can address the climate crisis,” says Kezelman.
“It's the biggest global challenge we're facing and cuts across all industries. At Taronga Ventures we are not an impact fund or investing purely for climate. But we are driven by the needs of those real asset owners that invest in us such as Dexus, Vicinity Centres and CBRE. The outcomes they want for their portfolios - and specifically ESG - has been a very strong through line to our mandate.”
And to what percentage is Taronga Ventures’ portfolio ESG focused?
“The majority. But we're cautious about not making any representations that can’t be substantiated. We are doing the leg work to help these early stage technology companies with their ESG measurement given they're busy building technology, winning new customers and growing rapidly.
“We're adding an extra layer of rigour on top to support them to measure the outcomes that they deliver from an environmental, social or governance perspective, where ultimately, their customers can claim those outcomes. It’s meaningful to our investors, our portfolio companies and the industry at large.
“Those emerging companies with innovative technologies are chipping away at the carbon problem and have a clear ability to measure their impact will have an advantage in the current fundraising climate.”
Future of climate tech
When it comes to forecasting the future of technology in our built environment, one of the most pressing questions Kezelman encounters is when emerging technology will make a real impact on embodied carbon reductions.“It's going to be a long and slow process with incremental steps towards net zero,” he says. “Consultants and owners need to be able to trust this technology, even if it's validated elsewhere in the world.
“The future of addressing this problem will run over a 15-to-20-year super cycle and it has a long time to go but it's what's required given the enormity of its scale. It's the principal challenge of our time that we're more than willing to invest in.”
