Suzanne Fallender, vice chairman of World ESG at Prologis, the world’s largest logistics actual property firm, is an optimist who views the complicated, quickly altering regulatory panorama as an opportunity to drive good decision-making throughout the corporate — not a reporting nightmare.

With $209 billion of belongings beneath administration, Prologis is topic to not solely the upcoming U.S. Securities and Trade Fee’s local weather disclosure necessities and the European Union (EU)’s Company Sustainability Reporting Directive, but in addition the EU’s Sustainable Finance Disclosure Rules.  

Fallender joined Prologis from the tech sector, the place she labored as international director of company sustainability at Intel Corp. Her strategy to the brand new rules is to speed up what Prologis was already doing — integrating ESG into its enterprise technique and decision-making whereas partnering with totally different groups internally to put money into and enhance knowledge programs. 

“The significance of setting targets and integrating sustainability features throughout the corporate, so that you simply’re tying these two to your core enterprise technique, is absolutely necessary to us,” she mentioned. 

Right here’s Fallender’s recommendation for getting ready for the brand new rules that may function a case research for different corporations:

Establish which groups must internally align

To get forward of the curve earlier than the foundations take impact, the ESG, vitality, accounting, operations, IT and threat administration groups at Prologis bought collectively to overview their knowledge and administration programs, establish gaps and plan for the way they may meet the brand new necessities.  

The ESG crew’s collaboration with accounting has been particularly essential for standardizing and prioritizing the metrics the corporate will report throughout the varied disclosure frameworks. Past aligning on core metrics, bringing the crew leads collectively “has been actually good [for] the interior relationship piece and ‘mutual studying,'” mentioned Fallender. “Our ESG crew is aware of extra [about] the metrics and the necessity for help, whereas our operations groups introduced knowledge course of experience, and the accounting crew [brought important] perspective about inside audits.”

The groups had collaborated earlier than, however getting ready for the rules and responding to growing investor and buyer knowledge wants has taken collaboration to a better stage.

Put money into knowledge administration and IT programs

Prologis spends a whole lot of time on knowledge, transparency and knowledge administration programs as a result of it drives a lot of what the corporate does, mentioned Fallender. The corporate created a “knowledge lake,” or central knowledge repository that may “pull or push knowledge” from varied inside and exterior sources, making certain that they’re interoperable.

Involving the IT crew in decision-making has been necessary, Fallender mentioned, as a result of it may be troublesome to type by way of the various software program choices for managing ESG knowledge. Fallender additionally discovered it useful to debate potential future wants for knowledge administration as a result of she’s realized that investing in a software to fulfill your fast wants might go away you quickly trying to find a brand new software when your targets change.

Get inventive when addressing Scope 3 knowledge gaps 

Prologis is eager to automate knowledge assortment, particularly for Scope 3 emissions, that are its greatest knowledge hole. The corporate set a net-zero purpose for operations by 2030 and its worth chain by 2040, and with Scope 3 emissions accounting for 99 % of the corporate’s greenhouse fuel footprint, Prologis has a whole lot of work to do.

Buyer vitality use within the 1.2 billion sq. ft of warehouses, distribution facilities and different logistics services that Prologis owns, operates and develops contains 75 % of its Scope 3 emissions. The rest is embodied carbon in building constructing supplies. Accessing buyer vitality knowledge is hard, particularly as a result of Prologis, headquartered in San Francisco, operates in 19 nations with totally different administration and lease constructions.

To extra simply entry that knowledge, and shut its Scope 3 hole, Prologis is working towards “inexperienced lease” language and altering utility metering practices. Inexperienced leases include language about sharing knowledge and different provisions designed to align tenant and landlord pursuits round vitality effectivity and water conservation. “It is a multiyear course of to proceed to automate that knowledge to get away from among the handbook knowledge assortment duties, comparable to asking clients to share it,” mentioned Fallender. 

Use your core enterprise targets to drive your strategy 

With out robust targets to information knowledge assortment and administration, the duty can appear overwhelming. At Prologis, “we’ve come at this from [the perspective of], how does all of this work assist us create worth for the shoppers?” Fallender mentioned. “We don’t make these choices in a bubble.” Prologis depends on buyer advisory boards to make sure it will get their suggestions.

For instance, when Prologis set its net-zero purpose, Fallender and others helped individuals throughout the group perceive the dual targets of the dedication — each lowering Prologis’ carbon footprint and serving to clients on their decarbonization journey. Prologis clients have been asking for photo voltaic panels and EV charging stations, and it wasn’t all the time attainable to put in these, Fallender mentioned. To assist implement the corporate’s net-zero purpose, Prologis modified its building tips to incorporate photo voltaic vitality and charging station set up capabilities in all new tasks.

As Prologis builds its knowledge administration programs, its net-zero purpose and customer-centered strategy are driving its strategy. That’s why Fallender doesn’t thoughts the brand new rules’ “messiness,” or the “hockey stick price of change in elevated consideration and criticism,” as she places it. “I believe all of that signifies that we’re altering the dialog in a significant method.”