Yin Kehan, Senior Consulting Advisor at Frost & Sullivan Greater China
On August 27th, at the ESG and New Quality Productivity Forum, Yin Kehan, Senior Consulting Advisor at Frost & Sullivan Greater China, officially released the Chinese and English versions of 'White Paper on the Sustainable Path of Building Operations' (hereinafter referred to as 'the White Paper').
This white paper comprehensively analyzes how Facility Management (FM) promotes ESG and net-zero transformations through platformization and data-driven approaches. Based on in-depth research into ESG, the white paper reveals the optimal path and quantifiable benefits of the 6P framework in terms of strategy, technology, and implementation effectiveness.
01
The Important Role of Facility Management (FM) in Sustainable Development
Since 40% of global carbon dioxide emissions and over 50% of electricity consumption originate from the construction sector, optimizing the building environment has become a core key to the success of ESG strategies. For enterprises of all sizes, this means that facility management (FM) and maintenance operations, whether owned or outsourced, must become frontiers of ESG and sustainable development initiatives. In short, excellent facility management means excellent ESG performance, as well as a higher probability of achieving net-zero targets.
02
Execute the overall solution using the 6P framework.
The 6P framework depicts how a successful ESG strategy should focus on six core components: Policies, Products, Processes, People/Personas, Partnerships, and Platforms. Integrating these six core elements enables facility management (FM) companies and their clients to operate efficiently and transparently with ESG, create growth opportunities, and develop new operational models, thereby improving efficiency and productivity on the path to net-zero emissions. The 6P framework is a practical tool that can help decision-makers assess the business case of investment platform software solutions and consider which factors should be considered to comply with ESG directives and maximize business value.
Data source: Analysis by Frost & Sullivan
03
ESG Empowering FM Technology Platform - Adopting Integrated Solutions to Focus on Key Metrics
ESG is increasingly becoming a core component of integrated technology solutions, which should cover: asset and operations management, space and workplace management, real estate portfolio management, stakeholder collaboration, future path planning, compliance management, and reporting systems.
Data source: Analysis by Frost & Sullivan
To further strengthen commercial rationality, the integration of facility management (FM), maintenance management with environmental, social, and governance (ESG) can bring quantifiable benefits, thereby creating broader organizational value. These values far exceed the scope of traditional sustainable development, and this is precisely why facility management and maintenance teams must deeply engage in ESG initiatives. High-quality facility management supported by integrated platform solutions directly affects cost savings, competitive advantage, talent attraction and retention, customer loyalty, and the attractiveness of an organization's investments.
Data source: Analysis by Frost & Sullivan
Taking employee retention and talent recruitment as examples, Frost & Sullivan's research shows that these are one of the three major issues currently facing global CEOs. Among the surveyed companies, 44% stated that effective implementation of ESG strategies has had a positive impact on attracting and retaining talent. Therefore, when employees indicate that the working environment and the employer's sustainability are their top concerns, the influence of facility management (FM) and maintenance teams becomes evident. This also extends to cost savings. A fully integrated building energy management system (BEMS) can not only improve energy efficiency, environmental performance, and operational efficiency but also bring up to a 50% cost saving. For facility management and maintenance teams, a more direct example might be predictive maintenance. In the field of technical services, the application of predictive maintenance is becoming increasingly widespread. By using data analysis, it can reduce downtime, improve operational efficiency, optimize spare parts procurement, and extend asset life. Compared to passive maintenance schemes, predictive maintenance can also save up to 35% in costs. For executives, a more relevant trend is becoming increasingly apparent: companies are accelerating the pace of incorporating ESG metrics into their executive compensation systems. Approximately 80% of the world's leading companies expect to start implementing this practice from 2024.
04
Build and Present Business Cases —— Checklist for Successful Checks
To build and demonstrate persuasive ESG business cases, organizations must formulate the right strategy and rely on appropriate platforms and partners to create value. Regulations have driven the urgency of ESG, but strategies driven by Facility Management (FM) have proven to reduce risks, create opportunities, and enhance attractiveness to employees, customers, and investors. The FM and maintenance teams are at the core of execution and need to proactively address challenges. By designing checklists using the 6P framework, organizations can clarify objectives, identify key factors and gaps, and accelerate ESG implementation. The white paper provides corresponding 6P checklist guidelines for internal FM and outsourced service providers.
In summary, the FM-driven sustainable development strategy is crucial for a company's ESG. With the right solutions and partners, the ESG platform can help enterprises go beyond supporting compliance and improving ESG scores. The right platform and collaboration enable FM-led ESG strategies to accelerate an enterprise's sustainable development journey and drive multiple organizational benefits.
