Yardi has joined the environmental, social, and governance (ESG) race with a new product called Yardi ESG.
"Yardi ESG is part of Yardi's residential and commercial suites for managing energy in real estate," a company press release says. "The ESG offering includes green energy procurement, 100% whole-building energy, water and waste data aggregation, reporting to ENERGY STAR and GRESB, and products to improve energy efficiency and reduce energy usage in buildings. Combining Yardi ESG with a single connected property management solution provides owners and managers with a comprehensive approach to energy management that streamlines processes and recovers costs."
ESG has become an important — maybe on the path to critical — aspect of real estate, because CRE is just part of the bigger business environment. Despite the backlash in some quarters, the issue goes well beyond politics, especially the environmental part. Questions about danger from extreme weather become disruptive threats. Maybe a business will be shut down for an extended period because of its specific location. Properties, and the companies in them, might be more or less vulnerable and have a risk profile that affects the value. The SEC will require disclosure of environmental risks and buildings play inseparable parts.
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While the concept of managing energy use and reducing it for more profitable operations is an old one, the reporting aspect is can be particularly troublesome. Most building systems weren't designed to specifically capture and then combine the variety of data that could go into environmental reporting, let alone generate reports. That would typically require manual work that adds costs but also increases the chance of data entry error.
"Yardi uses a tiered approach to automate the time-consuming aggregation, analysis and reporting of whole-building data by getting the data from utility invoices and providers, using meter systems at the property and from resident and tenant billing," the release continued. "Yardi ESG also eliminates the manual tasks involved in compliance reporting for ENERGY STAR certifications, successful ASHRAE Level 2 audits, GRESB reports and energy-oriented financial incentives ('green financing')."
ENERGY STAR is a rating system from the U.S. Department of Energy, with a specific set of metrics and processes for commercial buildings.
ASHRAE is a professional organization for HVAC and refrigeration. Level 1 and 2 audits together are designed to pinpoint potential energy efficient measures. Some of the measures can be taken within the context of existing building systems. Others might require capital intensive changes, in which case a Level 3 audit, not supported by Yardi, would be necessary.
GRESB is an international organization "providing validated ESG performance data and peer benchmarks for investors and managers to improve business intelligence, industry engagement and decision-making."
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