Avoiding Greenwashing, Making Money: The Data Company Helping Real Estate Fight The Climate Crisis

Working as a leasing broker and later a sustainability director at CBRE on the West Coast in the late noughties, Matt Ellis realised two things.

First, the world would be forced to transition to a more sustainable way of doing business, and real estate would be part of that. Second, it didn’t have a clue where to start.

“You couldn't measure [the sustainability of buildings and companies],” Ellis told Bisnow. “It was just not objective. There was lot of hand-waving about greenwashing, and it's deserved, frankly, because we didn't have the data.”

That's why Ellis teamed up with Websense principal and software engineer Lance Onken in 2013 to launch Measurabl. The environmental, social and corporate governance data and software business allows real estate companies to gather ESG data about their assets and portfolios and work out how to use that data to make money in a world where sustainability increasingly impacts decision-making for owners and occupiers. 

The Measurabl CEO and co-founder said that as real estate gets a better handle on data around sustainability, capitalism and financial markets can get on with the job of solving the climate emergency and ensuring real estate owners make money. 

Measurabl, which has raised more than $170M of funding from venture capital investors like Sway Ventures and Camber Creek as well as real estate investors like Starwood Capital, last week launched a new platform called Navigate. The platform offers modules that allow owners to use building data to work out how spending money on improving systems like HVAC would improve sustainability and decrease running costs for buildings, among other functions. 

The “decarb” tool can also provide advice on how easy it would be to improve a building’s sustainability performance so it is an investible asset in the future or whether an owner should sell now because the asset will be stranded.

With data on $3T of assets worldwide totalling 18B SF, 86% of which is in the U.S., owners can benchmark assets and portfolios against a range of peers, see how they compare and make decisions accordingly. 

“These buildings are all out there somewhere on a spectrum, and where is your location on the spectrum?” Ellis said. “Put it in context. Are your buildings better or worse? Once we know that, we need to get back to being capitalists and let the markets do their job. So if people want to divest, say, ‘I am no longer going to invest with you,’ then let that be their decision, but we provide the transparency that can make that decision.”

Markets will move faster and prove a more effective tool in fighting climate change than regulators, Ellis said. Better data will allow markets to be more effective in doing so. 

But regulators and politicians will have an impact on markets as well. There are competing narratives between tightening sustainability regulations in places like Boston, New York and Europe and an anti-ESG backlash, particularly in the U.S. 

“I can't hit it enough,” Ellis said. “Investment-grade data is the antithesis to greenwashing. Greenwashing is the Achilles heel of this whole revolution. If the politicians get their way, at least in America, they want to say it's all a bunch of hand-wavy stuff. So what I'm talking about is the ability to say, ‘No, it's not. It's objective, it's fact-based, it's measured and it's contextualised.’”

Ellis said Measurabl’s platform is used by property companies big and small, from large REITs and private equity firms down to landlords that might own one or two multifamily buildings. 

These smaller owners are particularly feeling overwhelmed by new regulation requirements and the level of sustainability knowledge required to be successful in today’s market. It is cutting through this feeling of helplessness that is a data platform’s most important task, he said. 

“There are implications for executives who don't want to break the law. You can see how stressful that becomes pretty fast, and it's not really your core competency, at least historically,” Ellis said.

“So our job is to come in and say, ‘There is this one building in real life. It can absolutely be measured.’ That's one thing that we love about real estate versus other asset classes. It's an inherently measurable asset class. It's fixed to the ground. It's got meters on it. ... It is a solvable problem with tech.”