The ESG Imperative in Alternative Assets

Data centres, cold storage, and life sciences real estate have become essential infrastructure –powering our digital lives, preserving global supply chains, and enabling medical innovation. But behind their growth lies a critical challenge: how to future-proof these assets in an increasingly ESG-conscious world.

Investors and operators alike are recognising that sustainability and resilience aren’t just about ethics, they are now essential for risk mitigation, value creation, and future-proofing your investments.

Why ESG is a Value Driver

Environmental, Social and Governance (ESG) performance is now a key differentiator for real assets. Strong ESG credentials can: 

• Lower operating and maintenance costs
• Improve tenant retention and investor appeal
• Mitigate risks from climate regulations and reputational damage
• Enable access to green financing and sustainability-linked loans

In sectors such as data centres and cold storage where energy use is intensive and stakeholder scrutiny is rising, ESG-readiness is no longer optional.

Sector Snapshots: ESG in Practice

Data Centres: Balancing Digital Demand with Sustainability

Power Hungry by Design: Data centres account for an estimated 1-2% of global electricity use. Efficiency metrics like Power Usage Effectiveness (PUE) are critical benchmarks, with top-tier facilities achieving PUEs of 1.2 or lower. 

Carbon Footprint: Operators are increasingly shifting to renewables, especially when they are increasingly being scrutinised by investors on their sources of energy.

Water Use & E-Waste: Cooling and IT refresh cycles can drive up water usage and electronic waste. Leaders are investing in liquid cooling, closed-loop systems, and certified recycling programmes.

Cold Storage: Cutting the Cost of Keeping Cool

High Energy Demand: Cold storage facilities are among the most energy-intensive building types.

Refrigerant Risks: Many still use hydrofluorocarbons (HFCs) which emit potent greenhouse gases.

Opportunity: Transitioning to natural refrigerants like ammonia (NH3) and carbon dioxide (CO2), combined with solar integration, high-performing insulation, and AI-driven energy management systems, can cut both operating costs and emissions.

Worker Safety: Sub-zero environments require enhanced protocols to protect employees – a critical ‘S’ consideration.

Life Sciences: High-Tech, High-Impact 

Intensive Resource Use: Laboratories operate 24/7 with strict air quality and safety standards, consuming 3-5 times more energy than offices.

Hazardous Waste: ESG strategies must include safe disposal of chemicals and biological waste.

Sustainability Leaders: Top facilities are now pursuing net zero design, heat recovery, and green chemistry to reduce impact.

Talent Attraction & Ethics: Strong governance and social responsibility are essential for attracting talent and maintaining regulatory integrity.

Key ESG Frameworks in Singapore 

Whether you're managing a data centre, cold storage facility, or life sciences campus, understanding which ESG frameworks matter – and why – is key to protecting asset value and attracting capital in Singapore’s evolving regulatory landscape.

1. SGX Sustainability Reporting (Now Mandatory for Some Sectors: The Singapore Exchange (SGX) requires all listed companies to publish annual sustainability reports. For real estate players, this means disclosing how climate risks are managed, how much energy your assets consume, and what your net-zero roadmap looks like. From FY2025, climate reporting becomes mandatory for property and construction sectors, in line with international standards such as the Task Force on Climate-related Financial Disclosures (TCFD).
2. BCA Green Mark 2021 - Performance Over Promises: Singapore’s Green Mark certification is no longer just about green design – the 2021 version emphasises ongoing performance. For commercial and industrial assets, this includes energy intensity thresholds, carbon impact, and smart building features. Meeting or exceeding Green Mark Platinum or Super Low Energy (SLE) standards now plays a direct role in tenant appeal, government incentives, and access to green financing.
3. MAS Environmental Risk Guidelines (Shaping Access to Capital): Even if you're not a bank, Singapore’s Monetary Authority (MAS) guidelines still matter. They require fund managers, insurers, and lenders to assess environmental risks – which trickles down to how real estate portfolios are evaluated and financed. Buildings with poor ESG performance could find it harder or costlier to secure funding.
4. GRESB - The Global Benchmark Trusted by REITs: Many REITs and institutional investors in Singapore use GRESB (Global Real Estate Sustainability Benchmark) to assess and compare ESG performance across buildings. A high GRESB score helps demonstrate sustainability leadership to investors and supports green bond issuance or fundraising. 
5. ASEAN Taxonomy - Regional Alignment on What Counts as ‘Green’: Singapore is aligned with the ASEAN Taxonomy, which provides a regional classification system for sustainable activities. This matters if you operate assets or seek funding across Southeast Asia – and ensures your ESG efforts are recognised consistently across borders.

The Future is Sustainable: Trends Shaping Alternative Assets in Singapore and Beyond

The ESG performance of data centres, cold storage facilities, and life sciences campuses is no longer just about internal operations – it’s a business differentiator. With frameworks like Green Mark 2021, SGX climate reporting, and GRESB shaping both compliance and capital flows, the direction of travel is clear. 

What to expect:

• Tighter Regulatory Expectations: From mandatory climate disclosures to real-time energy monitoring for Green Mark projects, ESG compliance in Singapore is shifting from static checklists to performance-based evaluation. Waiting to act may result in penalties or missed funding opportunities.
• Green Premiums & Capital Advantage: Properties that can demonstrate measurable ESG performance such as lower energy intensity, renewable integration, or smart system optimisation, are likely to atract institutional investors, qualify for green financing, and command higher valuations. 
• Innovation-Driven Optimisation: Emerging tools like AI-based load forecasting, digital twins, and low-carbon refrigerant systems are no longer future tech – they are increasingly expected in high-performance buildings. For alternative asset classes, tech adoption will differentiate leaders from laggards.

Time to Act: Making ESG a Value Driver, Not a Compliance Burden

With pressure mounting from regulators, investors, and tenants alike, ESG in alternative real estate assets is now a core part of asset strategy.

Here’s what forward-looking owners and managers can do today:

• Assess Your Current State: Map your portfolio against Green Mark and SGX’s climate disclosure requirements. Identify energy inefficiencies, compliance gaps, or missed incentives.
• Prioritise Measurable Impact: Focus on real-world performance – energy intensity, carbon reduction, system efficiency – rather than just green certification logos. Use tools like EMS or BMS to track and validate outcomes.
• Engage Early with ESG Experts: Whether in energy management, compliance reporting, or decarbonisation planning, cross-functional advice helps convert ESG goals into executable strategies, especially across specialised assets like data centres and labs.

Ready to take the next step? 

An integrated ESG strategy isn’t just good governance. It’s essential risk management, capital strategy, and brand positioning rolled into one. 

Start building a more sustainable and valuable portfolio today.