The last few years have been defining for Environmental, Social and Governance (ESG) investment in the real estate sector. Factors such as the pandemic, climate-related disruption, and a growing awareness of social inequity, particularly in the face of a cost-of-living and housing crisis, have prompted investors to adopt a more robust approach to sustainability-related risks.
Embracing ESG factors isn’t just a responsible thing to do; it’s strategic. As more individuals prioritize sustainability and ethical considerations, having a strong ESG proposition doesn’t just earn goodwill amongst buyers, renters, investors and stakeholders; it also enhances a company’s appeal, elevates its reputation and builds trust.
An emerging approach to driving ESG goals in real estate is to integrate electric carsharing services. The carsharing market is experiencing substantial growth fueled by the increasing demand for convenient and environmentally sustainable mobility solutions among individuals. This initiative not only aligns with ESG principles, but also offers a host of benefits for both properties and the communities they serve.
We’ve closely reviewed the “E”, “S” and “G” aspects of ESG to understand whether including electric carsharing is an enduring inclusion in real estate development strategies.
The “E” in ESG, which represents the environmental criteria, focuses on assessing a development’s impact on the environment, both during the construction and operational phases. This evaluation considers factors such as energy consumption, waste generation, materials and notably, its contribution to carbon emissions and climate change.
With transportation ranking as one of the main global sources of carbon emissions, the growing adoption of electric carsharing serves as a promising solution to tackle climate change. Electric carsharing can accelerate the environmental credentials of a property in three key ways:
Reduced Community Emissions: Electric carsharing promotes the use of electric vehicles (EVs), which produce zero tailpipe emissions and helps to reduce the carbon footprint associated with transportation. This contributes to a lower carbon impact for the real estate property.
Improved Air Quality: EVs also contribute to better air quality, a pressing environmental issue in numerous urban areas today. This positive impact leads to improved health and wellbeing for residents near the real estate property, as well as the broader population.
Less Vehicles on the Road: Electric carsharing gives residents the opportunity to access a shared car, rather than own a personal one. As a result, there is lower demand for vehicles and parking spaces, meaning construction of both vehicles and the building are less material intensive with a much lower carbon footprint.
The "S'' in ESG highlights a property’s commitment to social responsibility. It encompasses its impact on the local community and efforts to promote diversity and inclusion. There are two key ways that electric carsharing can drive social benefits:
Access to Mobility: Electric carsharing services provide convenient and cost-effective access to mobility services. This helps to bridge the transportation gap for individuals who cannot afford to own a vehicle, or choose not to do so, and ensures that everyone has equal access to reliable and eco-friendly mobility options.
Community Engagement: Integrating carsharing services into residential communities enhances the sense of connection and unity among residents. This collaborative transportation solution, provided by the real estate developer, not only promotes community engagement but also strengthens the social fabric within the community. This, in turn, fosters a feeling of belonging and collective responsibility, leading to improved individual well-being and overall quality of life.
Governance, represented by the “G” in ESG, refers to the policies and practices that shape how a property is developed, managed and overseen. It places a strong emphasis on fostering robust relationships among developers, suppliers, and the onsite community. Its primary objective is to ensure accountability, transparency, ethical conduct, and feasibility, while adhering to legal and regulatory requirements. There are three key ways in which electric carsharing can enhance effective governance within a development:
Cost-effectiveness: In a development, it’s crucial to protect the financial interests of residents and promote the efficient use of resources. Shared electric cars can reduce the cost to build a property, resulting in a lower sale or rental price of units, whilst offer residents a more economical option compared to owning, fueling and insuring their own vehicles, leading to direct cost savings.
Compliance and Regulations: Most state governments and local councils are now actively promoting the adoption of EVs and sustainable transportation within residential developments through regulatory measures. By implementing electric carsharing services developers showcase their proactive approach to aligning with these evolving standards and regulations, reflecting an increasing awareness of environmental concerns. As environmental regulations continue to tighten, supporting electric mobility becomes essential for the real estate industry to ensure ongoing compliance with evolving legal requirements.
Innovation and Sustainability: Incorporating electric carsharing into real estate developments demonstrates a commitment to innovation and sustainability, bolstering the developer’s reputation and governance. Additionally, it can draw environmentally conscious investors and partners to the project.
Implementing electric carsharing can be a strategic decision for real estate companies aiming to improve their ESG compliance and ensure the sustainability of their projects. As the sharing economy continues to gain traction in various building solutions worldwide, developers should not overlook its potential. This move not only showcases a firm commitment to sustainability, but also helps build socially responsible communities, making it an appealing prospect for investors and stakeholders who prioritise ESG considerations.
As the world shifts towards a greater emphasis on sustainability, adopting electric carsharing can position a real estate business as forward-thinking and responsive to evolving market trends and consumer preferences.
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