A panel at Nareit’s REITworks: 2020 Virtual Conference held Sept. 21-22 discussed a broad range of ESG topics, including the importance of having a clear ‘elevator pitch’ on a company’s ESG strategy, the challenges of both starting an ESG program and maintaining a mature one, and growing investor interest in ESG matters.
Fulya Kocak, Nareit SVP, ESG issues, moderated the panel, which also included: Samuel Adams, CEO and co-founder of Vert Asset Management; Dan Egan, SVP, energy & sustainability, at Vornado Realty Trust (NYSE: VNO); John Forester, senior director, energy & sustainability at The RMR Group Inc. (Nasdaq: RMR); and Joe Lopez, SVP of operations at SITE Centers Corp. (NYSE: SITC).
Egan at Vornado noted that one of the challenges of starting an ESG program was “conveying to other folks in the company what we were trying to accomplish,” adding that there was a “little bit of a language barrier” in the beginning.
As for the challenges of an advanced program, Egan said, “a pitfall I’ve tried to avoid for years is trying to do everything.”
RMR’s Forester said it’s important for companies to assess whether established ESG programs continue to drive value and are not simply a cost center.
Lopez at SITE Centers stressed the need for established programs to be nimble, especially in the current environment.
Turning to investor issues, Egan said investors are organizing themselves into a broader ESG group, and questions are becoming “more informed and specific.” Lopez added that investor interest is “growing exponentially…it’s definitely becoming more of a mainstay.”
Adams also noted that ESG investors are becoming a broader group that is aligning with mainstream investors. “All the demand drivers are there now so you can move projects forward,” he said.
On the topic of future ESG opportunities, Egan highlighted the central role now played by diversity, equity, and inclusion (DEI) issues. He added that quantifying the impact of the coronavirus will be an issue to be tackled next year.
Forester noted that as corporate ESG programs mature, there will be opportunity to synchronize the efforts of landlord and tenant. “That’s the slow-moving ship,” he said. Lopez highlighted the growing importance of wellness programs. “Wellness is really the next opportunity,” he said.