For years, sustainability reporting in commercial real estate has been largely voluntary, a marketing exercise as much as a compliance requirement. That era is ending. With the European Union's Corporate Sustainability Reporting Directive (CSRD) now in force and the SEC's climate disclosure rules taking shape, ESG data is moving from the marketing department to the audit committee.
The question facing real estate organizations is no longer whether to report it, but whether their data can survive an audit.
The ESG Readiness Gap
The numbers are sobering. According to recent industry research, including Deloitte's analysis in Building an Integrated Approach to Sustainable Real Estate, more than half of commercial real estate organizations report lacking the data infrastructure, processes, and internal controls necessary for ESG compliance. They can produce sustainability reports, but they can't prove the numbers are accurate.
This gap was a recurring theme at industry gatherings, including Expo Real 2024, where sessions on CSRD implementation drew standing-room-only crowds. The message was consistent: sustainability aspirations have outpaced data capabilities. Organizations have set net-zero targets without building the measurement infrastructure to track progress or defend their claims to auditors.
What Auditors Will Actually Ask
When ESG audits arrive, they won't just ask for your carbon footprint number. They'll ask how you calculated it. Which properties were included? What data sources were used? How was energy consumption captured in utility bills, smart meters, and building management systems? Were there any manual adjustments? Who made them, and why?
This is data lineage, the documented chain of custody showing exactly how a reported figure was derived from source data. Financial auditors have demanded this for decades. ESG auditors will require the same, and most real estate organizations aren't ready to provide it.
The problem is structural. Energy data originates in property management systems, utility portals, IoT sensors, and tenant submeters. It flows through spreadsheets and platforms, is tracked in sustainability platforms, and eventually appears in reports. Each handoff is an opportunity for errors and a gap in the audit trail.
From Spreadsheets to Systems
Creating auditable ESG data requires replacing manual processes with automated pipelines. Purpose-built middleware can continuously extract energy consumption data from source systems, whether Yardi, MRI, or direct utility feeds, normalize it into consistent units and formats, validate it against expected ranges, and deliver it to reporting platforms with full traceability.
Every transformation is logged. Each data point includes metadata indicating its origin, extraction timestamp, and any business rules applied. When an auditor asks, "Where did this number come from?" the answer is documented, automated, and defensible.
This infrastructure serves multiple purposes. The same automated data feeds that support CSRD compliance also enable internal sustainability dashboards, investor reporting, and green lease tracking. Build the foundation once, and it supports every ESG use case.
Beyond Compliance: Data as Competitive Advantage
Organizations that solve the ESG data challenge early gain more than audit readiness. Reliable energy data enables better operational decisions by identifying underperforming assets, prioritizing retrofit investments, and quantifying the ROI of sustainability initiatives. As Deloitte's research notes, integrated sustainability strategies create financial value, not just compliance checkboxes.
With climate-related insurance costs doubling over the past decade and building performance standards tightening globally, the ability to measure, verify, and act on energy data is becoming a core operational capability.
Building the Audit Trail Now
At KriyaGo, we help real estate organizations build the data infrastructure required for ESG compliance. Our platform automates the extraction and normalization of energy and operational data from property management systems, creating the documented, traceable data lineage that auditors require. We connect the systems you already use to the reporting frameworks you'll need to satisfy.
The auditors are coming. The only question is whether your data will be ready.
Ready to build your ESG data foundation?
Learn how KriyaGo creates auditable data lineage for sustainability reporting. Schedule a consultation to discuss your compliance requirements.
