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From Data Collection to Value Creation: How Smart ESG Strategies Drive Real Asset Returns

The Operational Approach to ESG That Global Investors Are Demanding

The founder and CEO of a sustainability technology company learned a crucial lesson during a decade at a major real estate investment firm: the energy line item coming out of the global financial crisis was “much bigger than we realized” and, importantly, “controllable.” This insight has shaped how leading investors now approach ESG—not as a compliance exercise, but as a systematic value creation opportunity across real asset portfolios.
Today’s most sophisticated investors understand that ESG data quality is just the beginning. The real competitive advantage comes from using that data to identify specific interventions that improve both environmental performance and financial returns. This operational approach is transforming how asset managers, real estate investors, and infrastructure funds think about sustainability.
The Two-Part ESG Value Creation Process
According to the expert’s experience working with global investors, successful ESG implementation follows a clear two-step process:

Step 1: Efficient, Low-Cost Data Acquisition

The first challenge is obtaining quality data without creating unsustainable cost structures. This means moving beyond spend-based estimates toward primary data collection, but doing so in ways that scale across large portfolios.

Step 2: Making Data Actionable

Once organizations have reliable data, the critical question becomes: “How do you make that data actionable? How do you do something with it?” This requires systematic approaches to identifying improvement opportunities and measuring the results of specific interventions.
As the expert explained, “The data tells you what to do, where to prioritize. You then do the various interventions at the asset level and then you go back and sort of say, did we improve these KPIs and metrics?”
Asset-Level Interventions: Where Returns Really Happen
The most sophisticated investors are discovering that meaningful ESG improvements happen at the individual asset level, not through portfolio-wide mandates. This granular approach enables managers to:
  • Identify Specific Opportunities: Data reveals which properties, facilities, or infrastructure assets offer the highest potential returns from sustainability improvements.
  • Prioritize Investments: Limited capital gets allocated to interventions with the best combination of environmental impact and financial return.
  • Measure Actual Results: Asset-level tracking enables precise measurement of both sustainability metrics and financial performance improvements.
  • Scale Successful Approaches: Interventions that work at one asset can be systematically applied across similar properties or facilities.
The Capital Markets Connection
The panel discussion revealed how ESG performance increasingly drives access to capital and improves investment terms. Insights from working with major global investment firms show how sustainability performance affects:
  • Equity Markets: Better access to limited partners (LPs), faster fundraising cycles, and higher capital commitments from investors who prioritize ESG performance.
  • Debt Capital Markets: Improved loan terms, higher loan-to-value ratios, and better cost of capital from lenders who recognize sustainability as a risk mitigation factor.
  • Asset Valuations:Properties and facilities with strong sustainability performance command higher values due to lower operating costs, reduced risk profiles, and stronger tenant/occupancy demand.
Changing the Investment Conversation
A key insight involves “changing the semantics of how we talk about” sustainability investments. Instead of asking “how much will it cost?” successful investors ask “how much value does it create?”

This reframing enables asset managers to:

  • Justify sustainability investments using traditional financial metrics
  • Compete for capital based on value creation rather than compliance requirements
  • Demonstrate to stakeholders how ESG improvements enhance overall portfolio returns
  • Build internal support for sustainability programs by connecting them to core business objectives
Getting Started: Building an Operational ESG Approach
Organizations looking to transform their ESG programs from compliance exercises to value creation engines should consider:

1. Start with Material Assets: Focus initial efforts on properties or facilities where sustainability improvements can drive measurable financial returns.

2. Invest in Data Infrastructure: Build systems that can collect, process, and analyze operational data at scale across portfolios.

3. Develop Intervention Playbooks: Create systematic approaches to common sustainability improvements that can be replicated across similar assets.

4. Measure Financial and Environmental Returns: Track both sustainability metrics and financial performance to demonstrate value creation.

5. Scale Successful Programs: Use data to identify which interventions generate the best returns and systematically apply them across portfolios.