Google the term “sustainability” and you’ll quickly realize its broadness. Hone your search in on “sustainability in real estate” and you’ll see that one definition simply doesn’t exist. To some it means saving energy and water, while others look immediately for a public-facing sustainability report as a true measure of success.
Sustainability means different things to different stakeholders. It is in understanding and embracing this that companies can truly tell their sustainability stories. At the end of the day, this is arguably the most critical piece of the journey.
A crowded field of standards
There is an overwhelming number of sustainability reporting programs, standards, and certifications available to the real estate industry. Listening to stakeholders can help you navigate this crowded field and can make or break your sustainability strategy. Kudos are surely in order for doing great things, but if your organization is not telling its story, then are you really maximizing your return on the investment?
Three major players need to be a part of a real estate organization’s sustainability journey - investors, tenants, and internal employees – with each requiring different communication tactics.
Disclose, disclose, disclose
Numerous studies have shown that strong ESG performance can mitigate risk and boost financial performance. It is for these reasons that NAREIT (National Association of Real Estate Investment Trusts) is expecting record attendance at this year’s annual ESG Forum, focusing on environmental, social, and governance issues in real estate. Participating in voluntary reporting programs such as GRESB (Global Real Estate Sustainability Benchmark) or publishing an annual public-facing sustainability report are great ways to both highlight sustainability achievements and to disclose your ESG performance to the investor community.
Changing tenant needs
Tenant priorities have also shifted over the past decade, with the millennial culture invading the workforce. Tenants want to feel like they live/work in a place that makes them happier and more productive. Topics such as wellness and energy efficiency have come to the forefront of sustainability, because tenants are simply demanding them.
Certification programs like Fitwel (a leading certification system that optimizes building to support health and wellness) have evolved into a great tenant communication tactic. Champions of this program, such as Tishman Speyer and Vornado, can communicate their dedication to providing its tenants with healthy and active spaces.
Board room to the boiler room
Finally, a real estate organization’s sustainability strategy can no longer be decided on, planned, and executed entirely in the board room. It truly needs to be ingrained in the culture of the organization from the board room to the boiler room. Each employee should know what the organization is doing and why, so they are empowered to advance your organization’s sustainability mission. Organizations like Kilroy Realty, Highwoods Properties, and COPT have organized inter-departmental Sustainability Teams that drive their sustainability mission and communicate progress both internally and externally.