Case survey: How Prologis is turning the sustainability regulatory squeeze into substitute

Suzanne Fallender, vice president of World ESG at Prologis, the enviornment’s biggest logistics precise estate firm, is an optimist who views the complex, all today changing regulatory landscape as a chance to drive valid decision-making one day of the firm — not a reporting nightmare.

With $209 billion of resources below management, Prologis is subject to not finest the impending U.S. Securities and Replace Rate’s native climate disclosure requirements and the European Union (EU)’s Corporate Sustainability Reporting Directive, nonetheless also the EU’s Sustainable Finance Disclosure Laws.  

Fallender joined Prologis from the tech sector, where she worked as world director of corporate sustainability at Intel Corp. Her methodology to the recent regulations is to inch what Prologis used to be already doing — integrating ESG into its trade method and decision-making while partnering with various groups internally to speculate in and improve knowledge methods. 

“The importance of setting targets and integrating sustainability capabilities one day of the firm, so as that you just’re tying those two to your core trade method, is that if fact be told main to us,” she acknowledged. 

Here’s Fallender’s advice for making willing for the recent regulations that can motivate as a case survey for various companies:

Title which groups need to internally align

To receive earlier to the curve sooner than the rules rob produce, the ESG, energy, accounting, operations, IT and possibility management groups at Prologis purchased collectively to have a look at their knowledge and management methods, title gaps and understanding for how they’ll meet the recent requirements.  

The ESG team’s collaboration with accounting has been especially serious for standardizing and prioritizing the metrics the firm will document one day of the many disclosure frameworks. Past aligning on core metrics, bringing the team leads collectively “has been if fact be told valid [for] the within relationship portion and ‘mutual learning,'” acknowledged Fallender. “Our ESG team is conscious of extra [about] the metrics and the need for assist, whereas our operations groups brought knowledge route of trip, and the accounting team [brought important] standpoint about within audits.”

The groups had collaborated sooner than, nonetheless making willing for the regulations and responding to increasing investor and customer knowledge needs has taken collaboration to a elevated level.

Make investments in knowledge management and IT methods

Prologis spends quite so much of time on knowledge, transparency and files management methods in consequence of it drives powerful of what the firm does, acknowledged Fallender. The firm created a “knowledge lake,” or central knowledge repository that can “pull or push knowledge” from various within and external sources, guaranteeing that they are interoperable.

Involving the IT team in decision-making has been main, Fallender acknowledged, in consequence of it will furthermore be complex to kind during the many software alternate options for managing ESG knowledge. Fallender also realized it important to talk about doable future needs for knowledge management in consequence of she’s realized that investing in a instrument to meet your instantaneous needs might perhaps perhaps budge away you rapidly looking out out for a recent instrument when your targets change.

Procure ingenious when addressing Scope 3 knowledge gaps 

Prologis is wanting to automate knowledge sequence, especially for Scope 3 emissions, which would perhaps perhaps perhaps well be its biggest knowledge gap. The firm trouble a catch-zero honest for operations by 2030 and its ticket chain by 2040, and with Scope 3 emissions accounting for 99 p.c of the firm’s greenhouse gas footprint, Prologis has quite so much of work to make.

Customer energy utilize in the 1.2 billion square toes of warehouses, distribution centers and various logistics companies that Prologis owns, operates and develops contains 75 p.c of its Scope 3 emissions. The the rest is embodied carbon in building building materials. Accessing customer energy knowledge just isn’t easy, especially in consequence of Prologis, headquartered in San Francisco, operates in 19 worldwide locations with various management and rent structures.

To extra with out exertion receive admission to that knowledge, and shut its Scope 3 gap, Prologis is working toward “inexperienced rent” language and changing utility metering practices. Inexperienced leases be pleased language about sharing knowledge and various provisions designed to align tenant and landlord pursuits spherical energy efficiency and water conservation. “Or not it is a multiyear route of to proceed to automate that knowledge to receive away from among the handbook knowledge sequence responsibilities, equivalent to asking potentialities to share it,” acknowledged Fallender. 

Say your core trade targets to drive your methodology 

Without solid targets to handbook knowledge sequence and management, the assignment can seem overwhelming. At Prologis, “we’ve reach at this from [the perspective of], how does all of this work motivate us make ticket for the potentialities?” Fallender acknowledged. “We don’t produce these selections in a bubble.” Prologis relies on customer advisory boards to present sure it will get their solutions.

Shall we embrace, when Prologis trouble its catch-zero honest, Fallender and others helped of us one day of the organization understand the twin targets of the commitment — both lowering Prologis’ carbon footprint and serving to potentialities on their decarbonization trek. Prologis potentialities have been asking for photo voltaic panels and EV charging stations, and it wasn’t for all time imaginable to set up those, Fallender acknowledged. To motivate put in drive the firm’s catch-zero honest, Prologis modified its building pointers to consist of photo voltaic energy and charging trouble set up capabilities in all recent tasks.

As Prologis builds its knowledge management methods, its catch-zero honest and customer-centered methodology are driving its methodology. That’s why Fallender doesn’t mind the recent regulations’ “messiness,” or the “hockey stick price of change in elevated consideration and criticism,” as she puts it. “I possess all of which implies that we’re changing the conversation in a chief means.”