ESG is becoming an increasingly popular watchword for multifamily owners. Not only are investors prioritizing properties with strong environmental, social, and governance (ESG) initiatives, but those initiatives provide owner-side benefits as well. They increase efficiency and reduce costs. They improve retention and tenant satisfaction. They even help on-site staff by easing workloads and streamlining tedious processes.
Still, choosing, managing, and measuring those initiatives can be a challenge for owners—and often a costly one at that.
Fortunately, technology can help. As Christopher Yip, partner at RET Ventures, explains, “The area within real estate technology that’s expanding the most quickly is ESG-focused tech.”
Here are just a few of these technologies that experts say they’re using to achieve ESG goals this year.
1. HVAC Efficiency Solutions
For properties looking to become more energy efficient, many proptech solutions are out there that can help.
“The real estate technology revolution of the past decade has highlighted a number of companies whose sole purpose is to promote energy efficiency in HVAC and other building processes,” Yip says. “The demand for these products is skyrocketing.”
Many of GID’s properties, for example, use a real-time dashboard that allows stakeholders to monitor energy use throughout the building. This can be particularly helpful in reducing energy spend in high-use places like fitness centers and common areas.
“We get real-time alerts and insights, and our on-site staff gets alerts on their phones,” says Phil Carmody, head of ESG at GID. “They can make real-time changes to the heating and cooling cycles.”
In-unit solutions like smart thermostats and smart lights can also help reduce energy costs and help properties operate more efficiently.
“For the resident, this can have a direct impact on their unit, but for the owner, this can translate into large savings for common areas and unoccupied units,” says Robert Gaulden, director of multifamily channel strategy at Allegion and host of the Solving for Multifamily podcast. “Powering up and powering down a unit for a showing is much more efficient than having someone walk the property and turn everything on in the morning only to turn everything off at the end of the day.”
2. Tools to Reduce Waste
There are also tools aimed at helping reduce trash and improve recycling participation among tenants. As Gaulden explains, “There are cameras and sensors that can determine the difference between waste and recyclables. This technology can provide the data needed to help reshape behavior and contribute to the collective goal of decreasing the property’s environmental footprint.”
GID also has technologies that monitor trash compactor levels at some of its properties. These keep staff apprised of how full on-site compactors are so they can better schedule pickups and reduce overhead costs and energy consumption.
“The key is we're saving on visits from these compactor pickups,” Carmody says. “So far, we’ve eliminated 80 site visits. So that’s 80 diesel trucks not coming out on the road.”
3. Water Consumption Solutions
Many properties are also using technology to better manage their water consumption. Some tools monitor for leaks and other potentially costly problems, while others focus on irrigation, helping properties better maintain green areas based on local weather patterns, recent rain activity, and other details.
According to David Natt, senior vice president of asset management at Avanath Capital Management, the leak detection and prevention tool being piloted at Avanath properties will reduce water usage by at least 14%. The company is also using rain monitoring technology in its Southwest properties.
“It measures the moisture in the ground and only waters when the moisture level falls below a set value,” Natt says. “It helps to reduce unnecessary water usage.”
4. Data Analytics and Aggregation Platforms
While proptech is certainly helpful in achieving various ESG goals, it’s also critical to measuring their progress along the way—both internally and for investors.
Often, that means adopting a data aggregation or analytics tool that can help property owners extract insights from the disparate systems and technologies they use.
“In some cases, apartment owners use 40 different stand-alone systems to run their properties, and that data is not being connected in meaningful ways,” Gaulden says. “Companies like Revolution RE help owners close the gaps in apartment data by pulling together information from various systems. Doing so provides comprehensive insights into the property and helps owners set and manage their KPIs.”
Other companies create their own custom-built dashboards that can monitor key performance indicators and track savings and returns on investment. Avanath is one such example. The company launched its own ESG framework and monitoring tool in 2020 called Amplify.
As Natt puts it, “The ability to measure progress toward ESG goals is tremendously important.”