When it comes to efforts based on Environment, Social and Governance (ESG), metrics can help tell the story. To that end, the National Association of Real Estate Investment Trusts (Nareit) recently released its sixth annual REIT ESG Dashboard which tracks data supporting issues and Key Performance Indicators (KPIs) related to environmental stewardship and social responsibility. The dashboard focused on the 100 largest U.S equity REITs as ranked by equity market cap.
The “Environmental” component of the dashboard indicated that REITs are increasingly reporting sustainability targets along with environmental performance policies such as carbon targets, energy usage, water consumption/waste management etc.. Additionally 89% of these top 100 Equity Market Cap reported their policies concerning risk & opportunity oversight involved with climate change impacts & low-carbon economy transitions .
On the “Social” side ,REITS have upped their social engagement reporting including improvements among employees , communities & tenants . 97 out of these top 100 reported data on community development programs while 84 reported charitable giving efforts & 68 employee volunteerism initiatives . Most also report health/wellness programs for employees along with workforce development initiatives too .
Additionally Diversity Equity Inclusion(DEI ) spans both Social&Governance categories being widely disclosed by most all in this group – 96% now report supplier screening disclosure as part of their social policy compared to 22 % in 2018 .. Alignment between ESG disclosures&financial reporting frameworks is increasing due to investor interest in financially relevant ESG issues such as climate risk – 66 out orf this group use Task Force On Climate Related Financial Disclosures(TCFD ) framework while Global Reporting Initiative( GRI )and SASB Sustainability Accounting Standards Board ( SASB ) developed standards help communicate sustainability performance providing investors useful information regarding financial impacts from sustainability measures taken
