Sustainability reports are becoming an important part of facility management as companies strive to lower their carbon footprints and work towards their environmental, social and governance (ESG) goals. It’s important to note that the trend of releasing sustainability reports is on the rise, with more building owners, managers, and facility management companies seeing the value of this practice. These reports are often released in the first quarter of the year, and according to Chris Hodges, co-author of the book Sustainable Facility Management, the Facility Manager’s Guide to Optimizing Building Performance, the key reason for this trend is to secure funding.

In his words ‘In order to secure funding for ongoing [building] operations and maintenance, sustainability initiatives, and capital funding, facility managers must be able to craft and present compelling reports in order to win funding for investments in [their] facilities.’

So, why are investors, loan officers, and other financial institutions increasingly requiring sustainability reports? As sustainability continues to be important, sustainability reports and related disclosures are designed to reveal the precise steps a facility is taking to reduce its environmental footprint.

Further, taking these steps documents how the facility is becoming more resilient to unexpected environmental shocks and hardships. This helps them better handle climate change and its impacts, and generate relevant cost savings – typically, when a facility begins its sustainability journey, cost savings become a positive effect of that endeavour. Beyond the scope of the environment, these reports may also address matters such as social issues, which would include (but are not limited to) the following:

• Ethical hiring practices
• Fair wages
• Healthy working conditions
• Inclusiveness (creating a place where everyone hired feels welcomed and respected)
• Transparency

These are just some of the areas of focus included in a typical sustainability report that investors are taking into consideration, paying them increasingly more attention. However, before publishing their own reports, facility managers often have several questions that need answering before the report can be generated.

What is a sustainability report?

By the late 1980s, some of the largest multinational companies started publishing what we now refer to as sustainability reports. These reports were initially known as environmental reports but were less comprehensive than those we see from today’s professionals. Nevertheless, these reports marked the beginning of a trend toward more extensive sustainability reporting, more responsible practices, and working towards ESG goals.

What do the reports reveal?

Sustainability reports are often a crucial factor for investors and financial institutions looking to invest in a property. Using the automotive industry as an example, we can compare sustainability reports to a CARFAX® report. Those of us who have purchased a used car in the past few years know that a CARFAX report details a car’s history and service records for maintenance and repairs. Using these reports, used-car buyers can make thought-based, data-driven decisions about buying a particular car.

Similarly, sustainability reports are essential for investors because they can reveal the steps a facility is taking to reduce its environmental footprint, and its efforts to address social equity issues. This allows investors to make more informed decisions about a facility, gaining a better understanding of its sustainability practices, how it addresses social and environmental issues, and how well it can mitigate environmental risks.

Are all sustainability reports the same?

The answer to this question is no, and this is where difficulties can arise. Currently, there are no standard reporting measures or guidelines for sustainability reporting. A report from one facility may be very different from a report from a similar building right up the street. This presents a challenge for investors, but one way to better address this is by knowing your audience and creating a framework to focus on the specific issues related to your property.

Inconsistencies in reporting can be significant; varying facilities may rely on entirely different evaluation methods and metrics, making comparing results almost impossible. However, steps are now being taken to address this issue. For instance, earlier this year, the Securities and Exchange Commission (SEC) “adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings,” according to its press release. The rules reflect the SEC’s continued efforts to respond to global investors “who demand consistent, comparable, and reliable information about the financial effects of climate-related risks on an [organization’s] operation and how it manages those risks.”

What is the future of sustainability reports for facility managers?

Without question, more facilities as well as facility management companies will release sustainability reports going forward as ESG goals continue to be a priority. Facilities of all shapes and sizes significantly impact the environment locally, nationally, and globally, and their efforts toward sustainability will become increasingly important.

According to the U.N. Environmental Program, the construction of large facilities “is by far the largest emitter of greenhouse gases, accounting for a staggering 37 per cent of global emissions.” While carbon pollution from the operations of these facilities is declining, it remains a gradual process. These greenhouse gases are making the world warmer, causing more extreme storms and fires, and contributing to water scarcity in North America and around the globe.

Beyond attracting investors, sustainability reports are a vital tool for companies to measure their efforts, work to achieve their ESG goals, and reduce their carbon footprint.

Steve Ashkin is CEO and founder of The Ashkin Group, an internationally recognized consulting firm working to green the professional cleaning industry and help organizations implement effective and cost-effective sustainability programs. Their commitment to green cleaning and sustainability is more than business; it is a passion, a calling, and a mission in life — to transform the cleaning industry.