Establishing and building upon formal programs
Companies are increasingly focusing on establishing or building upon formal programs in areas such as employee wellness, investing in expanded health care, flexible work arrangements, maternity- and paternity-focused programs, and expanded counselling programs including mental well-being, financial planning and career planning.
Leadership, oversight, operations and performance of these and other programs are crucial to being successful both financially and as corporate citizens as they increase stability, transparency, and employee retention. It’s paramount to have the proper processes, protocols and policies in place to monitor these programs, and success results when a diverse group of executives leads them. Instituting the correct tone at the top shows an organization’s commitment to transparency, accountability and actions that are in line with sustainability and responsible social policies.
If you are doing it, report on it
Many real estate companies are already including ESG information as part of their investor and public reporting and include numerous key performance indicators, including energy usage, GHG emissions, waste management (recycled and composted vs. landfill), number of LEED or Energy Star assets, and employee mix data, among other metrics. In addition to providing reporting for their stakeholders, companies participate in a variety of external reporting programs including the Global Reporting Initiative, LEED, Energy Star, Nareit and others, allowing the industry to compare and benchmark its progress as well as spotlight and recognize leaders in the field.
Hotel owners and operators have emerged as natural born leaders in the sustainability conversation. In the summer 2019, ULI released its Greenprint Report, which highlights best practices that the hospitality sector has implemented to increase energy efficiency, conserve water and reduce waste. No longer is it acceptable to rely upon those dubious signs in the bathroom that ask hotel guests to consider reusing their towels in an effort to help the environment.
Industry and governance organizations getting into the act
Another important barometer to consider is the growing ESG guidance and award programs sponsored by highly respected real estate industry organizations. For example, each year Nareit issues an award to the member REIT that has demonstrated superior and sustained sustainability practices.
In November 2018, the Sustainability Accounting Standards Board codified standards by sector, including real estate, to identify, manage and communicate to investors sustainability information that is financially material. The standards were designed to help investors by encouraging reporting that is comparable, consistent and financially material, thereby enabling investors to make better investment and voting decisions. Key disclosure topics include energy management, water management, management of tenant sustainability impacts and climate change adaptation.
To know more about these factors, read the full article here.