Suzanne Fallender, vp of International 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 property beneath administration, Prologis is topic to not solely the approaching U.S. Securities and Alternate Fee’s local weather disclosure necessities and the European Union (EU)’s Company Sustainability Reporting Directive, but additionally the EU’s Sustainable Finance Disclosure Laws.  

Fallender joined Prologis from the tech sector, the place she labored as world director of company sustainability at Intel Corp. Her strategy to the brand new laws 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 information methods. 

“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 admittedly essential to us,” she stated. 

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

Establish which groups must internally align

To get forward of the curve earlier than the principles take impact, the ESG, power, accounting, operations, IT and threat administration groups at Prologis acquired collectively to evaluation their information and administration methods, establish gaps and plan for the way they’ll meet the brand new necessities.  

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

The groups had collaborated earlier than, however getting ready for the laws and responding to growing investor and buyer information wants has taken collaboration to the next degree.

Put money into information administration and IT methods

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

Involving the IT staff in decision-making has been essential, Fallender stated, as a result of it may be troublesome to type by the numerous software program choices for managing ESG information. Fallender additionally discovered it useful to debate potential future wants for information administration as a result of she’s realized that investing in a instrument to satisfy your quick wants could depart you quickly trying to find a brand new instrument when your targets change.

Get artistic when addressing Scope 3 information gaps 

Prologis is eager to automate information assortment, particularly for Scope 3 emissions, that are its greatest information hole. The corporate set a net-zero objective for operations by 2030 and its worth chain by 2040, and with Scope 3 emissions accounting for 99 p.c of the corporate’s greenhouse gasoline footprint, Prologis has a variety of work to do.

Buyer power use within the 1.2 billion sq. ft of warehouses, distribution facilities and different logistics services that Prologis owns, operates and develops includes 75 p.c of its Scope 3 emissions. The rest is embodied carbon in development constructing supplies. Accessing buyer power information 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 information, and shut its Scope 3 hole, Prologis is working towards “inexperienced lease” language and altering utility metering practices. Inexperienced leases comprise language about sharing information and different provisions designed to align tenant and landlord pursuits round power effectivity and water conservation. “It is a multiyear course of to proceed to automate that information to get away from a number of the handbook information assortment duties, corresponding to asking prospects to share it,” stated Fallender. 

Use your core enterprise targets to drive your strategy 

With out robust targets to information information 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 stated. “We don’t make these selections 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 objective, Fallender and others helped individuals throughout the group perceive the dual targets of the dedication — each lowering Prologis’ carbon footprint and serving to prospects on their decarbonization journey. Prologis prospects have been asking for photo voltaic panels and EV charging stations, and it wasn’t all the time doable to put in these, Fallender stated. To assist implement the corporate’s net-zero objective, Prologis modified its development pointers to incorporate photo voltaic power and charging station set up capabilities in all new tasks.

As Prologis builds its information administration methods, its net-zero objective and customer-centered strategy are driving its strategy. That’s why Fallender doesn’t thoughts the brand new laws’ “messiness,” or the “hockey stick charge of change in elevated consideration and criticism,” as she places it. “I feel all of that implies that we’re altering the dialog in a significant approach.”