Happy New Year! We can all likely agree that 2021 did not live up to expectations. However, it was an inflection year for the environmental, social, and governance (ESG) movement in real estate. Fueled by strong investor engagement amid a rapidly changing world, ESG discussions took center stage and organizational commitments grew by leaps and bounds.
The Global Real Estate Sustainability Benchmark (GRESB) saw its largest ever growth, with over 1,500 entities or $5.7 trillion of assets reporting on ESG performance. Commitments to the Science-Based Targets Initiative (SBTI) doubled. “Carbon neutrality” and “net zero” discussions persisted and new standards were inked. New financial models strengthened the relationship between ESG performance and risk. ESG strategies and targets went from “nice-to-haves” to rules of engagement for many investors.
While the pace of getting back to work and progress towards normalcy slowed with the emergence of new COVID variants, our industry continued to innovate and embrace change. New hybrid work models like alternating schedules and hot desking were embraced. Fitwel’s health and well-being certification (v2.1) and Viral Response Module (VRM) were rapidly adopted. Building amenities that promote health and well-being became an important differentiator as the labor and housing markets tightened. And all the while, REIT stocks soared nearly 30%!
As we look forward to 2022, we are very encouraged and hopeful that this momentum will continue. We are grateful each day to be working collaboratively with our clients and alongside so many others in the industry toward meaningful progress. Here’s to the new year!