Publicly traded REITs are continuing to adopt, implement, and report on environmental, social, and governance practices and integrate them across their businesses, according to Nareit’s new REIT Industry ESG Report 2023.
The fifth edition of the report, which features 20 case studies from individual REITs, highlights three critical themes. Specifically, REITs are:
- Adapting to and managing the impacts of climate change by focusing on risk assessment, preparedness, mitigation, and strategies to reduce carbon emissions in alignment with leading global frameworks.
- Focusing on developing the people within their businesses, the occupants of their buildings, and the communities in which they invest and operate.
- Providing leadership through transparency, target setting, and effective governance practices that help plan for uncertainty and increase business resiliency.
The report includes Nareit research sources, including the 2022 Nareit ESG Dashboard, which surveys the top 100 REITs by market capitalization; the 2022 Nareit Workforce Development & DEI Survey; the 2022 Nareit Member ESG Survey; and outside sources such as the 2022 GRESB U.S. Portfolio Analysis Report and S&P Global Intelligence Green Bond Issuance data.
Key takeaways from the report show that of the 100 largest REITs by market capitalization have made significant progress over the past 5 years:
- 89% publicly report having a climate policy—up from 20% in 2018.
- 73% publicly report carbon targets—up from 30% in 2018.
- 87% publicly report carbon emissions—up from 41% in 2018.
- 97% of REITs report on workforce engagement programs for health and wellness and workforce development.
- 98% of REITs have at least two female board members.
In addition, other key takeaways from the report demonstrate that of the REITs that participated in the Nareit Member ESG Survey, 78% of them have board oversight of ESG specified in a charter, while 76% report ESG performance to their boards of directors quarterly or more frequently.
To learn more about REITs’ ongoing work to advance their environmental, social, and governance efforts, download the complete REIT Industry ESG Report 2023.