Publication
10 Nov 2023 ·
United Kingdom
Dealing with data
4 min read
Data is a powerful tool for driving change and the demand for collecting and reporting ESG data is increasing. This affects all those who build, operate and occupy real estate.
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Below are some of the core reasons why businesses are prioritising data collection:
ESG disclosures
Management, investors and lenders all require access to accurate ESG data. Such data is also increasingly important in meeting the requirements of regulators for evidence of ESG performance and corporate claims of sustainability.
New rules and initiatives
Governments and legislators are increasingly adopting open data initiatives that are intended to increase access to data and data sharing.
Regulation
ESG issues feature heavily in the current regulatory agenda. Rules being implemented in the UK, the EU and elsewhere are changing the ways businesses structure their projects and their property portfolios.
In the UK, for example, new rules proposed in the Data Protection and Digital Information (No. 2) Bill will extend the open banking data regime to other industries, including real estate and construction.
If enacted, the new rules will let the government require specified suppliers of goods, services and digital content to give customers access to data relating to them, as well as contextual information relating to the goods, services or digital content provided by the supplier.
In the EU, the proposed new Data Act will introduce requirements to make the data generated by the use of IoT devices and related services directly accessible to users and to allow users to require that the data be made available to third parties.
Regulation
Rules being implemented in the UK, the EU and elsewhere are changing the ways businesses structure their projects and their property portfolios.
With so much data being collected, there are a host of issues and structures to consider:
Responsibility for data
Responsibility for collecting and reporting on ESG-related issues changes throughout the lifecycle of a development.
Broadly, the developer is responsible during the planning and construction phase of a project, with responsibility passing to the new owner when a property is sold. But some issues will need to be negotiated.
Handling data
Once collected, data is likely to be stored centrally and may be accessed by many different people. This can raise various legal, commercial, ethical and data security issues.
To put appropriate protections in place, businesses should start by asking key questions about each data set.
- What is the source of the data?
- Who is responsible for providing the data?
- Who will be using the data?
- How will the data be used?
Other factors should also be considered. For instance:
- Is the data commercially sensitive or confidential?
- Do third parties have rights that may determine how the data should be managed, shared or used?
- Are there relevant restrictions in law or contract – for example, data protection or IP law, the law of confidence, website T&Cs, or conditions under a licence?
- Are there other risks in sharing the data? For instance, some landlords and building managers fear that sharing building management, operation and performance data with tenants or customers may expose them to potential claims, if the data can be used to verify their performance.
Data licences
Businesses allowing third parties to access and use their data typically manage this through the use of contracts and data licences. But this is not without risk, and businesses will want to consider a number of factors when negotiating licence terms and conditions.
Data trusts
One approach to data management is the creation of a data trust, which enables data to be gathered and shared safely and securely for the benefit of multiple stakeholders.
