Fragmented environmental responsibility?

I’ve been doing some work recently on operating models for outsourced property management (somebody has to?). I also recently saw a case study of an attempt to try to introduce an initiative to reduce energy consumption in a commercial building.  It wasn’t in the UK – but it was clear that the sheer number of parties involved in trying to execute the initiative was a major factor in it failing to be implemented.  It seemed to be a case of fragmented or dispersed responsibility creating high transaction costs.

The ‘chain’ of stakeholders responsible for deciding and implementing a management initiative for a real estate asset can be quite intricate. The investor may belong to one organisation.  It will have outsourced fund and asset management to another organisation.  The fund and asset managers will then outsource the property management to another organisation.  The property management organisation can themselves have separate specialist teams for rent collection, building surveying, procurement, sustainability, environmental surveys etc.  They may even outsource some of these specialist functions themselves.  The tenant – the ultimate consumer of energy – may, in turn, have just as complex a supply chain for their corporate property management.  That’s not to mention – the utility providers themselves, potential metering complications etc.  OK – I’ve mentioned them.

I’m sure it can be straightforward in some cases to get an environmental initiative implemented. However, it looks like there can be a lot of sign-offs needed for a change to be made.


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