A free online tool to encourage active sustainability
On paper, sustainability is very much moving in the right direction. We all have brilliant plans for sustainable value creation – especially for the long term. But actually, expensive investments are needed now in order to achieve future sustainability objectives. Sustainability therefore lends itself very well to dressing up long-term plans while putting off action that is necessary to implement those plans now. Psychologists can tell you all about that. After all, we all procrastinate now and again. Fortunately, psychologists also know how to encourage decisiveness in people who procrastinate.
Procrastination at the Tilburg campus
Each year at the Tilburg campus, we use the failure rates of procrastinating predecessors to discourage our brand new first year students from procrastinating. However, this strategy only works with insecure students. The very thought of preventable failure encourages these students to do their absolute best from the outset of their studies. Unfortunately, though, the Netherlands has very few insecure students, meaning our well-meant advice has limited effect. We could have foreseen that, of course. After all, CFOs and CEOs are not known for having self-doubt.
Naming and shaming
There is only a slim chance that a stern talking-to about the failings of others will persuade confident students to change course and resist the temptations of procrastination. According to psychologists, what works better for self-assured individuals is highlighting their own actions. In other words: old-fashioned naming and shaming. Preferably straight away, rather than at some point later on. As of this year, this method is being used within companies that do not take CO2 emissions at their premises seriously enough. This initiative is thanks to research carried out by TIAS.
CO2 emissions: free measurement online
TIAS was commissioned by the European Union to work on CRREM, the Carbon Risk Real Estate Monitor: a free online tool that maps CO2 emissions from real estate. The emissions calculated per building or portfolio are compared with future standards.
Encouragement to become more sustainable
The CRREM tool therefore shows the scale of a company’s pollution through its use of real estate and how long that real estate will continue to meet increasingly stringent standards in terms of CO2 emissions. The latter issue really sets things in motion, as breaching imminently stricter standards is considered twice as bad. Not only does it damage the image of the company, which is doing its best to communicate its sustainability profile on paper – it is also very expensive. After all, real estate that no longer meets the standards will fall in value more quickly.
The ideal incentive for sustainable value creation
The CRREM tool is very popular with investors, companies and their stakeholders who use it to publish the actual sustainability of real estate. Before long, banks, analysts and shareholders will start benchmarking and asking questions. Those who prefer to procrastinate rather than actively make their real estate use more sustainable will face public humiliation. According to psychologists, this is the ideal incentive for them to practice what they preach when it comes to sustainable value creation.
For more information about CRREM, please refer to www.crrem.eu
This article originally appeared as a column by Prof. dr. Dirk Brounen in CFO Magazine Belgium, October 2021.
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