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2023: A year of sustainability and data-centricity for the integrated facilities management sector



The solid growth trajectory of the Indian Integrated Facilities Management (IFM) sector, with a projected CAGR of almost 15% over the next six years, has been mostly driven by real estate projects, corporate innovation, and digital transformation. The IFM industry has improved its standing through developments in sustainability, increasing its global market value from USD 39.9 billion in 2020 to USD 46.27 billion in 2022. These investments in CRE have further fueled demand for IFM services, with Grade-A office space leasing anticipated to surpass 42 million sq. ft. by the year's end.

In order to adapt to the shifting dynamics of the real estate sector and service delivery, the facilities management industry has undergone substantial changes over time. Considering the future, sustainability-focused real estate operations will be the deciding factor that will differentiate the industry over the coming years, in addition to technology integration, data-interpolation, workplace flexibility, and compliance.

The ESG reporting

From USD 283.5 million in 2019 to USD 1.5 billion in 2022, ESG (Environment, Social, and Governance) investments have increased significantly in India during the past four years. The Indian government has urged businesses from all sectors to increase their sustainability-related contributions in order to help realize the country's goal of achieving net zero emissions by 2070.

More than 90% of S&P 500 firms and over 70% of Russell 1000 companies now publish ESG reports, according to a recent McKinsey research. There is little doubt that someday ESG reporting will apply to all businesses. This indicates that the facilities management industry is increasingly required to deliver data, particularly in a real-time, transparent, and effective cloud-based ecosystem. The facilities management industry needs to move forward with this evolution in order to meet the demands of customer and employee centricity.

For instance, the KSPCB (Karnataka State Pollution Control Board) recently mandated publishing water sample reports in its online system at large commercial facilities in Karnataka to encourage better governance structures and facilitate audits and compliance. This model can also be applied to other utility supplies.

Sustainability for retaining talent

Young workers today are more aware of the environment than ever before. Employers with a solid track record in sustainability not only attract more qualified candidates, but they also have greater rates of employee satisfaction and retention. Facilities management will facilitate changing to new definitions of green buildings since it plays a crucial role in helping organizations connect with their larger goal of social and environmental responsibility.

The addition of biodiversity projects, community involvement initiatives, and CSR will further highlight the value of an IFM partner in an organization's core principles, which will directly affect employee satisfaction.

Initiatives to Reduce Carbon Emissions and Go Neutral

According to the GHG protocol, carbon emissions are divided into Scope 1, Scope 2, and Scope 3. Direct emissions from owned or controlled sources are covered by Scope 1 whereas indirect emissions from the production of power, steam, heating, and cooling used by the organization are covered by Scope 2. Scope 3 is made up of all other indirect emissions that take place in a company's value chain, and facility management can be extremely helpful in mitigating these emissions.

ESG policies, for instance, must be integrated into the entire supplier chain. By implementing the procedures necessary for compliance with ESG standards, there is a tremendous possibility to lessen Scope 3, particularly in the Facility Management sector where there are several vendors and suppliers. Another illustration is the emissions generated as a result of workers commuting to the office, which may be evaluated based on their mode of transportation. After that, the employer can offer shared transportation choices to lower these emissions and collect the credits. The facility management staff is in charge of handling all of this.

Conclusion

From a distance, the industry seems to support the development of the IFM sector by a strategic approach to essentially conventional operations. We can harness the full potential of the IFM sector and have an impact on other related firms by using a four-step strategy of measure, benchmark, invest, and sustain. The future potential of the real estate and integrated facilities management industries will be utilized by a variety of businesses, including those that provide renewable energy, technology services (particularly in the metering, IoT, and sensors spaces), staffing agencies, manufacturers of equipment and chemicals, and certification organizations, to name a few.
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