Zach Flora: Understanding ESG’s “S” with Fitwel’s Social Performance Program
When discussing ESG, the focus is often on the environmental aspect. However, it is important to also consider the social factors that can impact performance. According to Zach Flora, Executive Vice President of Growth at Fitwel, these include inequality and issues related to working conditions, community relations, stakeholder quality-of-life and human health.
While measuring environmental impacts may be easier due to available data on carbon emissions and water usage, quantifying social factors has historically been more challenging. To address this issue in commercial real estate (CRE), Fitwel has launched its Social Performance platform which provides a system for generating hard data about the “S” component of ESG.
Fitwel works with leading CRE investment managers and REITs to certify healthy buildings but saw a need for assistance in measuring their clients’ social impact initiatives. Through research studies and pilot programs with companies like QuadReal Property Group and Tishman Speyer among others , they have developed six targeted outcome areas aligned with standard reporting criteria such as TCFD , GRESB , SASB , GRI . These measures cover topics like community engagement, air quality resilience against climate change impacts employee support public transportation access.
For example one measure under climate change resiliency involves flood-prone zones where strategies are evaluated based on how well they protect assets people occupying those buildings while improving occupant health according fitwell research every $1 invested flood mitigation can generate $7 return investment .
Understanding how asset operations affect occupants from a social perspective can help inform investment strategies financial decisions especially given recent events highlighting stakeholders’ power strength influence risk value within CRE industry COVID-19 pandemic continues shape market dynamics keeping buildings competitive while mitigating risks stranded assets remains top priority .
In summary understanding importance of considering both environmental societal aspects when evaluating investments will lead better decision-making ultimately promoting sustainable profitable outcomes connect CRE .
