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Challenges for FM in meeting ESG standards

The announcement in the Spring budget that the Government intends to introduce regulations for the providers of Environmental, Social, and Governance ratings illustrates an increased focus on managing environmental and social risks and building strong governance. With research suggesting the negative impacts of non-compliance on brand reputation, what are the main challenges for the FM sector in meeting ESG standards?


ESG is a term now familiar to most of us – and sustainability is obviously a cornerstone of this. An organisation’s ESG is the standard by which its operations impact upon its stakeholders and wider society are assessed, while offering transparency as to how that organisation performs across multiple levels.

Basically, sustainability should make people think, act and perform better – efficiency, decency and innovation. In a wider sense – as part of an ESG strategy, being to some extent an MOT for your business.

The announcement in the Spring budget highlights the drive in the FM industry to meet net zero. But this has to be part of a change in more fundamental mindset as to how buildings are built and maintained. Time is against us and being passive is not an option.

Asset Management demands equal consideration of Capex and Opex – How much a building costs to build is one thing, but with energy prices having spiked last year to 8x or 9x what it was 10 years ago, what about the cost in use and the cost to repair? How informed is the construction of new buildings, and how informed are the selections of equipment and installations in considering the impact upon your ongoing facilities management regimes and costs to maintain?

Building and equipment efficiency has never been more vital. Is the building fabric condition such that energy efficiency is maximised to its potential – increasing asset efficiency, and in turn saving money and reducing one’s carbon footprint.

This naturally becomes part of a wider assessment of your business – how can you operate, strategise and perform better. Because ESG and sustainabiity are all about asking questions of your method while asking you to improve.

Reducing energy usage saves money and reduces your emissions. Win win. But if an organisation also thinks about its employees, and considers building location – proximity to public transport, air quality, how pleasant the working environment is and the impact upon occupants’ wellbeing these are important – impacting upon morale, increased productivity and levels of staff retention to consider. These softer benefits become part of a company’s culture, and in turn its identity – increasing appeal to prospective employees and customers, as well as investors and shareholders. Good businesses making good business sense.

We have found that in working with clients to develop an ESG Strategy, underpinning what we do with a bespoke ESG IT solution means that you objectively assess performance, benchmark ongoing performance, and provide transparency to your investors, directors, employees, investors and your customers.

By doing this on a cyclical basis – establishing best practices as part of your business today routine, you can demonstrate your organisation’s ongoing excellence and a genuine commitment to meeting ESG standards. 

About Sarah OBeirne

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