“Culture eats strategy for breakfast - Why digital transformation is about more than just choosing the right tech” - Emily Hamilton - Executive Series #6 ၏ စာသားမှတ်တမ်းအပြည့်အစုံ

time, bringing together different stakeholders is something that challenges many roles. Not just the standards, many roles, but many sectors seemingly those who are the best at it or those that it's the most critical to our sustainable sustainability leaders within real estate. How and we've touched on in a little bit with the, you know with the education component, but how do you really bring together various stakeholders as effectively the draught positive change?    00:06:42 Emily Hamilton  I think the first thing is you all need to be heading in the same direction. So we set an incredibly ambitious vision, which is to become a restorative business, which means you want to put more back in society and the planet than we take out now. That is incredibly ambitious given where real estate is today. But in order to start to pivot the business, we need to set a vision. And that was our first thing was to really look at not just doing things a little bit better, but what are the big changes that we could make. And then it's how do we set up products to start to deliver that. And we're still very early on that journey, but we've just got a affordable housing fund that should have the sustainable sustainability impact label through the SDR. We're in the processes of developing a natural capital strategy. We have natural capital now as one of our business pillars, interesting so and that.    00:07:33 Matthew Maltzoff  You don't know natural capital natural.    00:07:36 Emily Hamilton  Natural Capital is about the natural stocks that we have, so whether that's air, land, sea water. But in the context of real estate, it particularly focused on how do we use land more effectively. So things like regenerative farming, where you're improving soil your health and or you're looking at what you can do to plant more trees that help the local area for nature, but it needs to be able to generate returns. So that's where real estate can, you know, really help to accelerate some investment in that area, being good stewards of land.    00:08:08 Matthew Maltzoff  Understood. And so with, with, with, with different teams, you know they're moving in the same direction. You've got you've got of buying from the top. You mentioned Alex being an advocate as well. Is is this really the the bread and bread and butter to be affected at a driving sustainable change? Do you think you need to really combine those two? Is that?    00:08:35 Emily Hamilton  I think the third one is prioritisation. OK, Sustainability is a huge area and we could get lost in, oh, we're not doing enough on social or we're not getting deep enough into nature. But actually if we just prioritise and what do we, what do we need to focus on? So for us this year, our real focus is on implementation. And to do that, we prioritise 3 funds that have the most emissions. And that way we can start to go deeper into those funds to drive that emissions reduction down faster.    00:09:06 Matthew Maltzoff  Got it. And

then Hick, you know, when looking at the number of KPIs that starts rising and looking at the the number of assets in the portfolio, it's easy to get lost every asset being different as well. So I think to summarise that takeaway reprioritization, getting buy in from the top and getting different stakeholders on the same mission and that's what it takes. OK. A large question mark for a lot of real estate businesses today, I think we're getting a little bit more clarity, but a large question mark is how to tackle the many main regulations. I'll list a few, the EU taxonomy, CRREM, GRESB, SFDR, just to name a few. And and and in their credit. These are in place to accelerate change and the built environments rate of change is greater than ever before is seemingly insufficient to hit global net zero goals. To me that sounds like there is an opportunity. What needs to happen to the built environment to see the rapid change? We are quite.    00:10:18 Emily Hamilton  I think there's three things. The first is that the teams that I talk to in the industries, I spend a lot of time speaking with our peers to see, you know, how can we collaborate, what can we do better, but what are we doing well, what are they doing well? And the key thing that's coming out is the amount of time that we're spending on reporting. So we are spending as an industry sometimes up to nine months of the year on reporting for all these various regulations and policies which he listed us. So I think the first thing is how we automate that and how do you use AI to support. But before even even getting to that stage, it's about understanding what is it that is going to drive the change in real estate. And reporting and transparency are important, but what is really important is that we again focus on not trying to do everything at once, but going deeper into several funds or into several properties and getting the right prop tech in place, whether that's smart metres or finding the right solar providers. Because once we get it working at 3 or 4 assets, it's going to be easier to scale. So we've got loads of case studies where we've gone a net 0 carbon building, where we've got solar panels on the roof. But what we're struggling to do is, is to scale that. And you have to find the right suppliers who can work across multiple countries. If you're a bigger business, you have to find the the right the right people who the occupiers are going to trust as well. So that involves our property managers, that also involves our and internal team and it involves suppliers and and tenants and involves them working all together. And I think until we work out how do do we get that sweet spot of what the tenants want, we're not going to scale.    00:12:16 Matthew Maltzoff  So we're thinking about there's five major regulations.    00:12:19 Emily Hamilton  It's five major.    00:12:20 Matthew Maltzoff  Yeah. And it feels like there's five trains coming up. Yeah, asset managers, we're at different speeds and different directions. So how do you navigate all of them?    00:12:28 Emily Hamilton  So I think in order to navigate all of those, it's about understanding policy leavers. So for example, we don't need more regulation. You often hear we need more regulation, we don't. What we actually need are the right policy leavers. So the first thing we need is mandatory data sharing. France have done it, the UK hasn't and we are seeing a huge time SAT because we haven't got that mandatory data sharing. So we need better policy levers as a starting point. We also need ideally more people in in the different governments understanding real estate better. And so I think one of the things is that our industry is to better educate and these leaders in government to, to understand what is the policy they're putting in place and how will that affect real estate? Because SFDR, EU, taxonomy, they've all had unintended consequences, not just for our sector, but for many sectors. So it's how do we use the industry groups like INREV, like Better Buildings Partnership, you know, all these like organisations to, to do that education and advocacy on our behalf and.    00:13:39 Matthew Maltzoff  OK. Now we're, you know, we've got asset managers who, you know, in the last 12 months, it may have been the first time they're really now thinking about this, this new component of the way they're conducting business and these these regulations that might also seem rather daunting and also change is rather daunting. What would be your advice to asset managers today and asset managed And you know, when thinking about having a successful sustainable portfolio in 2025 and thinking about that regulatory landscape, how can they how can they approach that successful?    00:14:25 Emily Hamilton  What we're looking at is how do you use that regulation to drive progress faster. So we know that, you know, with the euro and the EPBD coming out with all of these different regulations, there was going to be great attraction in the market to accelerate. But that's not going to happen unless you've got your property manager trained on how to use your ESG data system or you've got your asset manager talking with your property manager about if they're negotiating new leases, that we understand what's in these new leases. So I think it's, it's again, it's about that collaboration piece of making sure that all different parties understand the regulation and how they can support the outcomes of that. And that way we can use it to accelerate faster rather than seeing it as a stick that is just about reporting.    00:15:26 Matthew Maltzoff  OK. So, so yeah, you know, I think there's a really big take away, as you know, to the to the public sector. More regulation won't speed things up. It actually might slow things down.    00:15:38 Emily Hamilton  I would say so.    00:15:39 Matthew Maltzoff  And, but, and, and at the same time and to private sector professionals, think about the think about

what's going to drive the most impact on portfolio, focus on those. And you know, when, when thinking about 5 regulatory bodies, you think maybe focusing on one that's there's certain actions you can take that have an effect on all of them. How might you approach that?    00:16:03 Emily Hamilton  I think first of all that the industry is to coalesce around some key messaging. So that idea of mandatory data sharing. Until we get energy pricing, so until we get the fact that electricity is cheaper than than gas, I mean that's going to make it harder to show the commerciality as with these decisions about swapping out a heat pump, particularly in the residential sector. I've actually retrofitted my house last year and even though I'm using less energy, I have still in the colder months had higher energy bills because of the gas and electricity differential. So I think that is something that we need to look at. So I'd say coalesce around a key messaging, find the advocacy bodies that can really support. And I think together as an industry, we need to do that, but we also need to look at how we get investors, investment managers and occupiers coming together to ask for the same things as well, rather than necessarily asking for like different, some saying we need more regulation, others saying, well, you know, we need this energy data sharing. We we need it to be very clear about what we're asking governments.    00:17:09 Matthew Maltzoff  Got it. Now the final component of the of the episode, we're going to talk a little bit about some of the technology solutions and how and how we can use that effectively. I think we're going to break this into two questions. The 1st is, is more advice or other funds, others, no asset managers who might be looking at taking our technology, sustainability managers who are looking at scaling out of technology. And and then also potentially we're going to think about what, what that looks like as advice to the to the technology solutions to the founders and to that side. OK, So I know you guys work in Deepki, you working with Salia, I believe very smart, smart metering and solutions in order to get a successful implementation and to get value out of these solutions, what would be your advice to executives to take on technology effectively and get the most out of it?    00:18:13 Emily Hamilton  Inside the business.    00:18:15 Matthew Maltzoff  Within, within, within businesses, similar to sales again.    00:18:20 Emily Hamilton  Well, in order to get the most out of platforms like Deepki, the first thing we did was to make sure we had executive leadership support. So it goes back to that stakeholder buy in. It was then a programme of engagement, which Cathy led a lot of it and being able to engage all the different teams, do lots of training, work with property managers. So I think any business that's thinking of making an investment into that type of prop tech needs to ensure that they're, they're doing it not just for the right reasons, but they know how they're going to engage the employees internally. Because we could have a, a really all singing or dancing system and no one could use it. Interesting. And that would be an absolute waste of money. So it's it's how to make sure we do that effectively?    00:19:09 Matthew Maltzoff  Interesting. So would it be fair to say that digital transformation, while the while the technology you're taking on is important, the culture of the business and the readiness to change and the readiness to learn even on the best technology could be a make or break. Is that a fair?    00:19:27 Emily Hamilton  What's that saying? Culture eats strategy for breakfast? It's all about the culture we've got. You've got to get the right culture readiness principles in order to then drive that type of change.    00:19:40 Matthew Maltzoff  And so even in, in sort of our world, when you think about different, different start-ups, we also, you know, we talked to a lot of events businesses in different industries. We've got a good, good friends of ours in the legal sector, which going for a digital transformation got people we know from the insurance sector, which has gone through a bit of a transformation. Real estate is very, very similar to insurance, just a few years behind. And what's interesting is that, you know, you might see many, many businesses, competing businesses and. One of them just home runs and you think, well, is the technology and even that different from the rest? Not really is or is this conference, you know, is, is the idea really that different from the rest? Not really. What you do have when you look into that business is you have a team that is when they're when they're in bed, they're thinking about, you know, is that could that customer get more? They're thinking that, you know what, what should, what should the markets know about us? Or is that is that person putting in a positive? How can I do that extra one thing? And it really seems to come down to that culture, which is really accurate. What you've been saying right from the start, which is getting, you know, getting everybody on that same mission, how effective that can be. It's interesting how that even trickles down to when you think about which companies are successful, where the rollouts are successful. It's really fundamental to to all of this. I'm going to ask you the same question more towards the tech companies now. A lot of companies are receiving funding today. I think there was a little bit of quiet period, but a lot of companies are receiving funding today. We talked about that the activity from fund managers, while while high at the moment, is also insufficient to hit total goals. So that there's still a lot that can be done. With all that in mind, what would be your advice to new tech companies today that are looking at making a change?    00:21:48 Emily Hamilton  I'd say that don't just rely on coming to a sustainability team to be able to

say try our new technology. We get bombarded. So I get at least 50-60 emails a week or LinkedIn messages saying try this, try that. We simply haven't got the resources all the time to go through and filter at all. So first of all, you need multiple people from the same business. So you need to be going to the asset managers, you need to speak to our fund managers, you need to get multiple applicants, whether that's a COO and that way more likely to then say, OK, if three or four people in the business, I think this is a good way to approach this technology or, or or solve this problem, then yes, we will follow up. I think the other thing is really understand what is the company's pay points and how is your technology going to solve that. So for example, if it's about reporting, OK, then how does your technology specifically support the real estate investment sector? So I think really understand the sector. I get so many approaches from companies saying I've got this amazing ESD data platform. It's like, well, that's great, but you're not real Estate Pacific, you don't offer the reporting that we leave for our regulation. So that that's great, but that's not going to support us to really understand the pain points that those businesses are facing and where you think you can help them.    00:23:18 Matthew Maltzoff  So so so re understanding the client at a deep level.    00:23:24 Emily Hamilton  DAKYC.    00:23:25 Matthew Maltzoff  And and maybe send, you know, while emailing might have its place to to some degree, it might really not actually deliver that understanding the, you know, multiple people within the business.    00:23:38 Emily Hamilton  I think it depends because for example if someone said to me can I have 1/2 an hour phone call, I would want to see more evidence before I give that half an hour over. Because if I gave over half an hour to every 50-60 approaches, you wouldn't have. I wouldn't have any time.    00:23:51 Matthew Maltzoff  To do the actual thing you're.    00:23:53 Emily Hamilton  Supposed to be doing exactly. I think the other part is really knowing the technology readiness level of your technology. So whether you're at much kind of venture capital early stages or have got some scalable pilots that you can point to and we are competitive as an industry. So I think pointing to our competitors and what they're doing, that can sometimes help as well.    00:24:15 Matthew Maltzoff  Understood. Last question, just for you, Emily, what's next for you or the body you're focusing on 2025 and you know.    00:24:25 Emily Hamilton  So as I mentioned, we set a restorative business strategy back in 2022, end of 2021. And what I want to do is really look at how do we refresh that and make it more meaningful. All the changes that have happened, you know with all the regulation and with things like sustainable impact labelling, but also that we are rapidly going through many of the world's client boundaries. How we make sure that our and

long term business strategy from that perspective really shows what we want to do as a business in that space and making sure their language resonates. So we've done some stakeholder engagement that for example, of Germany, there isn't necessarily a word for restorative, it's like 1.    00:25:14 Matthew Maltzoff  And they've got a word for everything.    00:25:18 Emily Hamilton  So really it's going back to that culture piece. I want to make sure that everyone in our business is re energised around our longer term mission because it's been a couple of very tough years for real estate. And I think we need that renewed energy to to help ensure that we're working with our, you know, capital raising team as well as asset managers, fund managers and the the USP of what we're trying to do is really recognised and.    00:25:44 Matthew Maltzoff  I and I and I do feel just in just in talking into, you know, different leaders, different different companies, different investors that that sort of head headwinds that people were fighting against that sort of died. And I think even that there was a lot of there was a lot of relishing in half a percent interest rates. You can't really make a bad real estate investment, which on the one hand has made some lies easier, but on the other hand may have been slightly damaging because Y needs to take on so much sustainability initiative when they're performing great anyway. And now you know that the industry has become a bit more new. Everyone it, it did feel difficult and now it's now I think we're in a very unique position because as interest rates are coming down, the, you know, people are more equipped to take on different activities. But at the same time, the, the movement and the momentum that sustainability is having, the LP is looking at portfolios that the, the liquidity that you get out of it. All the benefits are there and all the resources are coming back. And I think we're now in an extremely exciting time where we're adding where the value add is increasing on, on, you know, on a monthly basis. And, and we're in an industry that is say hungry to, to, to transform. So I think we're in a really exciting, exciting time. I think a lot of people are excited for 2025. Would you say that's a fair summary?    00:27:30 Emily Hamilton  I would say a cautiously optimistic, I definitely sense the same as you, Matthew. There's a different energy this year and whether that's because of some of the things that are happening in the world and the politics and particularly in sustainability when things get tougher, the tough get going. So I think maybe it's that attitude of, well, we're going to make this work regardless of who's leading, you know, these these important governments. And I think the other thing is that we are starting to be able to see financial benefits from what we're doing in real estate. It has been slow, as you said, you know, we were able to show increased liquidity, we're able to to show rental uplift. We've got an example in the UK where we had an industrial portfolio that went up in rental value as a result of being retrofitted and having lots of great work done to it. So I think there are case studies that we can point to. I would say our challenge this year is going to be that scaling and really scaling implementation, particularly because real estate teams and sustainability are lean. So we have to make sure that we're really prioritised and what we're doing.    00:28:37 Matthew Maltzoff  Understood, Emily. It's been a pleasure. I'm I can't wait to see you again. I think the next time I might see you briefly, we'll be in Cannes and then at our event in September. I was looking.    00:28:50 Emily Hamilton  Forward to it.    00:28:51 Matthew Maltzoff  Looking forward to seeing you. Thank you so much for being part of the podcast.    00:28:54 Emily Hamilton  Thank you. Thank you for the opportunity.