How EV charging infrastructure fuels ESG excellence
The rising importance of Environmental, Social, and Governance (ESG) criteria for commercial landlords, pension funds, and property developers today reflects a growing recognition of the financial, social, and ethical benefits associated with sustainable investment practices.
Against this backdrop, adopting low-carbon technologies like electric vehicle (EV) charging infrastructure across your commercial real estate portfolio is crucial for property- or land-owning organisations looking to enhance ESG credentials.
Indeed, the link between ESG and EV charging lies in their shared focus on sustainability, societal impact, and long-term value creation. Whilst ESG refers to a set of criteria used to evaluate a company’s ethical and sustainability performance, EV charging directly supports this agenda – playing a critical role in enabling the transition to cleaner transportation.
This blog will unearth how EV charging infrastructure can directly benefit landowners, developers and pension funds alike by enhancing ESG ratings and propelling sites into prime examples of sustainable development. It will investigate how EV charging helps to diversify and future-proof the sustainability of investment portfolios, and crucially – by partnering with a reputable Charge Point Operator (CPO) – an ability to benefit from a recurring, index-linked revenue stream without the need for significant financial outlay in establishing these assets at your site(s).
Environmental ESG
Driving change: How EV charging can supercharge sustainability
In the most basic terms, EV charging infrastructure contributes to reducing greenhouse gas emissions by facilitating the adoption of electric vehicles, which produce fewer emissions compared to traditional vehicles with internal combustion engines.
With the total lower cost of ownership, EV charging has risen in prominence thanks to a rapidly rising number of consumers who have bought an EV (there are now more than a million on UK roads following a record growth in purchases in 2023) as well as organisations looking to capitalise on this growth in demand by providing the necessary charging infrastructure.
With this demand comes the need to secure EV charging supply. Fortunately, landowners and developers – as well as retail, leisure and hospitality organisations – are in prime position to service that need whilst reaping the many benefits of hosting EV charging at their site(s)
Indeed, EV charging has developed a reputation as an image enhancer by offering a tangible solution for businesses to contribute to tackling climate change. As a result, EV chargers hold considerable weight in generating positive ESG scores.
Most third-party agencies rank environmental ESG scores on three main metrics; resource use, emissions and innovation. EV charging can positively contribute to all three criteria and wider ESG ranking metrics.
By partnering with a responsible CPO that culturally aligns with your ESG objectives, you can also ensure any chargepoints assets installed at your site are sourced with responsible materials through a supply chain of the highest environmental standards, ethical installation processes, and minimised waste, adding significant weight to your environmental ESG score.
Embedding EV charging facilities into your site or development can also have a significant sway over environmental certification. EV charging infrastructure not only amplifies the BREEAM rating for a building (3% of site parking must have active chargepoints for positive influence) but also helps to increase the acceptance of any future medium to large-scale planning permissions.
By achieving a high BREEAM rating, EV charging infrastructure has the power to attract potential tenants (who can achieve their own ESG goals), or to facilitate the sale of the property, whilst also maximising the environmental reputation and value of the site. Positively contributing to the locality with a high BREEAM rating will also strengthen the social ESG rating of your site, by embedding sustainable infrastructure in your local community.
Social ESG
Catalysing clean communities: EV charging’s social impact
Adherence to ESG and corporate social responsibility principles prioritises business decisions that benefit the community where the business operates, be that locally or nationally.
EV charging can support this on multiple fronts. Firstly, by ensuring that the facilities installed at your site are accessible, convenient, safe and affordable, EV charging infrastructure can promote social equity by providing clean transportation options to communities, including those with limited access to public transportation or personal vehicles.
By installing charging stations in public locations such as shopping centres, workplaces, and community spaces, EV charging becomes more convenient and accessible to a wider range of people, including those living in urban areas, apartments, or multi-unit dwellings where home EV charging isn’t always feasible.
Companies involved in EV charging can likewise enhance their ESG profiles by prioritising the development of charging infrastructure in underserved areas and promoting inclusivity in their services (something that SMS prioritises through our membership of ChargeSafe). This helps reduce disparities in mobility and transportation access, particularly in underserved communities where access to public transportation may be limited.
Let’s not also forget the associated health benefits that EV charging can have on society through promoting greater adoption of low-carbon transport. By encouraging the uptake of EVs through the availability of charging infrastructure, communities can experience reduced levels of air pollution, leading to lower rates of respiratory illnesses and other health problems associated with poor air quality.
Governance ESG
EV Charging as a beacon of responsible financial decision-making
Demonstrating good corporate governance as part of wider ESG commitments reflects a growing recognition of the financial and ethical benefits associated with sustainable business practices.
When it comes to investing in EV charging infrastructure – as with the benefits linked with other renewable and low-carbon energy technologies – the landscape is no different. Indeed, EV charging infrastructure can be seen as a demonstration of good corporate governance for several reasons, not least its potential for long-term value creation.
That’s because installing EV charging on your sites, and the ability to charge the public to use the facility to power their cars, opens up the possibility for landowners to embed a recurring revenue stream into their land assets. This proposition, what’s more, becomes even more attractive when you consider the benefits of partnering with a reputable Charge Point Operator (CPO)
A highly experienced, financially robust CPO (with exceptionally strong covenants) will invest in the installation, operation and ongoing maintenance of the EV chargepoint assets on your site through a long-term hosting agreement, thus sharing in this recurring revenue stream with the landowner without them having to invest financially themselves.
As far as making responsible financial decisions go – ones that can generate economic, environmental, and social benefits over the long term – then the opportunity to partner with a CPO in this way is hard to see past. Effective corporate governance, after all, includes identifying and managing risks to protect the interests of stakeholders and preserve the company’s reputation and financial health.
Establishing EV charging infrastructure with a CPO not only helps mitigate risks associated with climate change and regulatory compliance but also accommodates shifts in consumer preferences by diversifying revenue streams and positioning your company for growth in a rapidly emerging marketplace.
Overall, investing in EV charging infrastructure is a strategic decision that addresses environmental, social, and governance considerations, aligning with the principles of ESG. Landowners and pension funds can reinforce their ESG profile — by partnering with a reputable CPO — showcasing a long-term strategy geared towards eco-friendly practices and, resultingly, enjoy additional income.
The positive and accurate disclosure of the ESG environmental benefits of EV charging demonstrates proactive transparency, meanwhile, reflects a commitment to sustainability and long-term value creation, while contributing to a more sustainable and resilient future.
