Measurabl provides commercial real estate customers with customers uniquely detailed reports on how well their building scores according to dozens of “green” criteria. Read on to learn why Salesforce's Impact Fund became an investor.
Salesforce believes business is a powerful platform for change. That’s why Salesforce Ventures, the company’s global corporate investment group, created a $50 million Impact Fund, which invests in companies that drive positive societal impact by addressing challenges across workforce development, equality, sustainability, and the social sector. In this series, we’ll be featuring companies in the portfolio and telling their stories. In this installment, we profile sustainability measurement startup Measurabl.
What they do
Commercial real estate is one of the world’s biggest offenders of environment damage. You can’t manage what you can’t measure, and that’s Measurabl’s quest: The San Diego-based outfit provides customers uniquely detailed reports on how well their building scores according to dozens of “green” criteria.
Focus area of investment
They say necessity is the mother of invention. But Measurabl founder and CEO Matt Ellis was also the benefit of good timing. The San Diego native began his career in commercial real estate as a broker at investment giant CBRE. Eventually he assumed a role leading the firm’s West Coast sustainability practice. It was an internal initiative, but he saw very clearly the real estate industry was awakening to the reality that reducing properties’ carbon footprints wasn’t just about being a good citizen of the environment.
Measurabl founder and CEO Matt Ellis
“Certain companies were starting to realize that sustainability and the environmental impact of not just their products, but their facilities, were key to their brands,” he says. “I saw companies like Whole Foods, for instance, beginning to build their entire brand on sustainability, and investors were immediately receptive. Meanwhile, government regulators were increasingly beginning to crack down on companies with big carbon footprints. Sustainability was no longer just a social responsibility, it was becoming crucial to maintaining a healthy business.”
And when it comes to pollution, real estate is one of the worst offenders. According to the U.S. Environmental Protection Agency, the industry is the fourth-worst offender of greenhouse gas emissions, behind transportation, electricity production, and industry. In the U.S. alone, real estate accounts for 72% of all electricity consumption, 38% of carbon emissions, 40% of raw materials usage, and 14% of potable water usage, according to the U.S. Green Building Council (USGBC).
Fortunately, the willingness to do something about it was there, Ellis observed. The problem was that there was no one, perfectly reliable way for the real estate business to accurately track every single factor that contributes to a large carbon footprint — especially with an increasing number of benchmarks that building owners have to track to declare their properties sustainable. Since the early 1990s, the EPA’s Energy Star and the USGBC’s LEED certifications have been the leading protocols for buildings to declare themselves “green.” But both are opt-in programs, as are the more than 100 other standards for declaring so-called ESG (environmental, social, and governance) readiness.
That’s where Ellis saw an opportunity. He left CBRE in 2013 to start his own shop. His goal was to create a comprehensive sustainability rating system for commercial structures that took into account every single piece of data available, from the usual inputs like carbon intensity and energy consumption (which factor into LEED and Energy Star certifications) all the way through more subjective ones, like renovation projects, weather exposure, individual building policies, and so on.
With a small team of real estate veterans and software engineers, Ellis made his vision a reality. Working his connections in the industry, he found dozens of companies interested in such a product. Today, Measurabl aggregates those data points — as many as 130 of them — and applies a layer of machine learning to connect the dots. The end result for a building is a comprehensive report comprising as many as 100 factors, all summed up by a benchmark score of 1-100 (based on similar-sized buildings).
The early interest from potential customers was simple, Ellis explains: operational efficiency translates into financial efficiency. “Investors appreciate that any kind of environmental risk will potentially depreciate their returns,” he says. “Others are exposed to regulatory action by cities, states, or even the federal government, so it behooves them to start carbon reduction programs. And then tenants or occupants of buildings are seeking out more efficient buildings, not just for their own bottom lines, but to show they take this stuff seriously as a brand.”
Those calculations are bearing fruit. Measurabl’s business has grown to 100 clients, and they’re diverse: from real estate and investment giants like CBRE, BlackRock, and Brookfield Asset Management, to corporate entities like Intuit, Major League Baseball, Stumptown Coffee, and — yes — Salesforce. According to Ellis, more than 40,000 commercial buildings across 75 countries currently measure their sustainability performance using Measurabl. In the U.S. alone, that accounts to one in every 10 square feet of commercial floorspace.
“As human beings, we spend 90% of our time indoors,” he says. “It’s how we work, it’s how we play. Real estate is at the center of it all, and there is no answer on issues like climate change if you don’t address this sector. We have a saying: ‘You do not manage what you do not measure.’ Well, now we can measure it. And we can do something about it.”
They said it
“Our job is to be the people who put transparency around these critical environmental benchmarks, like your carbon footprint,” he says. “You can’t see it and you can’t smell it, but you can measure it. That’s what’s going to make a difference in the world. And that’s what gets me pumped up.”
— Measurabl CEO and founder Matt Ellis