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ESG and Sustainability Central to the Full Life-process of a Development Project

Sustainability

An example of a DVM group designed interior.

The concepts of ESG and sustainability are increasingly a central issue with regard to tenant specification and staff requirements in the current office market environment. This applies from the inception and design of a project to the leasing strategy, property management (PM) and facility management (FM) to an exit with a sale to an investor.

Environmental, Social and Governance issues are becoming more prominent. It is becoming an essential requirement for tenants, so if investors are thinking long-term, they need to switch to the same system. ESG is, therefore, a system-wide change, according to DVM group.

“ESG is becoming increasingly important for tenants, with some companies aligning their entire strategy to the 2030 sustainability standards, while others are still struggling to interpret the word,” comments Ida Kiss, design director at DVM group.

“The market value of large companies (especially those listed on the stock exchange) can be positively impacted, or even negatively impacted by their lack of certification. Responsible companies ensure their operations by hiring environmental experts and independent consultants

They constantly consult with activists and organizations, sometimes even integrating such experts into top management,” she explains.

“ESG principles guide their practical operations, for example, in their supply chains. In supply chains, smaller companies that comply with ESG criteria have an advantage,” Kiss says. DVM group has been operating as a design, architectural, general contractor and project manager in Hungary since 1985. It utilizes LEED, BREEAM and WELL in its office maintenance and sustainable energy work. 

Sustainability is seen as impacting the role of actors across the market, whether builders, construction supervisors, architects, interior designers, property managers and even investment analysts.

Ida Kiss, design director at DVM group.

Individual Responsibility

“These groups always have different interests, but it is now clear that sustainability is everyone’s individual responsibility,” Kiss notes.

“Architects have a huge responsibility in this, and they have to be at the drawing board, watching what they design and how they design it. But investors and real estate agents must also take on increasing responsibility, as they are the ones who create the demand,” she argues.

“It is at that level that the protection of our environment must come into play. Builders work with the material itself, so they are the ones who make what is a principle only at the top level a reality,” Kiss adds.

She sees three crucial levels: vision, mission and action. At the highest level, investors and real estate agents are more important because they define the level of demand. The architects have to translate this demand into architecture, which the builders then translate into materials. The whole chain must have a common interest in building a more sustainable world.

Concerning the future role and design of the office, this is seen as more of a place for the community to come together and less of a place to work. In addition to collaborative work, the office of the future can also provide space for very deep work, and these functional simplifications must also be reflected in the mapping. The open office is no longer regarded as practically applicable to any form of working and may disappear as a consequence.

Understand Your Clients

“To make an office space better, you need to understand how your clients operate, their business goals and culture. If the space supports and complements the company’s business, I call that good design,” says the design director. 

With regard to location issues, the conventional wisdom is that real estate projects should contribute to and even improve the surrounding city environment. In the case of regeneration projects, the need for the project must be assessed, which is first and foremost the responsibility of the investors and those involved in the development of the city. If a project is necessary, it can improve the thermal balance, livability, image and function of the urban environment, argues Kiss.

When it comes to the question of whether sustainability specifications increase pressure on pricing, the argument is framed in a different way by the DVM group, approaching it from an environmental perspective.

“I think the right way to ask the question is: do we want to create a better environment for our children or for future generations? All that said, it does not always put pressure on the face of things, but rather it affects perceptions,” Kiss concludes.

This article was first published in the Budapest Business Journal print issue of April 22, 2022.

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