REITs, the Environment, Sustainability, and Governance

I’m pleased to report that NAREIT has released its first ever Environment, Sustainability, and Governance (ESG) report this month.  For many years, REITs have been concerned about their environmental footprints, and have been at the lead in reducing energy consumption and waste.  However, REITs and the leadership at NAREIT want to go beyond that, and are now promoting best practices in these three key areas.  This month’s report — hopefully the first in a series — synopsizes how well we are doing.

Of course, doing “good” can also mean doing “well”, and REITs are still committed to offering solid diversified returns and liquidity to investors.  We here at ACCRE are committed to being good citizens of the world around us, so it is useful that as we look for great REIT investments, we can also make sure we are owing a piece of firms that are “doing good”.

What exactly constitutes positive practices in ESG?  For example,  the report documents REIT performance in a number of key areas, including (but not limited to):

Green Building Certification
Emission Reductions
Decreased Energy Consumption
Energy Efficiency
Waste Reduction
Water Conservation
Creating Lasting Social Impact
Focus on surrounding Communities
Investing in Employee Development and Wellbeing
Robust Governance & Board Diversity
Supply Chain Management

In all of these areas, REITs appear to be taking the lead in the real estate sector.  Of course, there is always more work to do, and it’s great to know that NAREIT is prioritizing good citizenship among its members.  For your own copy of the report, click here.

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