The Nareit REIT Industry ESG Report 2023 highlights the commitment of real estate investment trusts to environmental, social, and governance practices. In terms of climate change, REITs prioritize risk assessment and mitigation efforts in alignment with global frameworks for reducing carbon emissions.
According to the report, a majority of surveyed REITs have implemented new technologies to enhance their ESG monitoring performance. The sustainability report also includes various dashboards that showcase key findings:
– 89% of the top 100 REITs by market capitalization have a climate policy in place (up from only 20% in 2018)
– An increase from just over one-fifth (23%) in 2020 to more than four-fifths (83%) now align their financial frameworks with the Task Force on Climate-Related Financial Disclosures
– Over three-quarters (73%) publicly disclose their carbon targets
– All companies included on Nareit’s ESG Dashboard are reporting publicly on their ESG initiatives
The report also emphasizes an increased focus among REITs on climate risk reporting as they strive towards making informed long-term investment decisions. Many U.S.-based REITS voluntarily include climate-related metrics in supplemental reports.
On the social and governance front, employee growth is a key priority for many REITS who address worker needs through inclusive recruitment and hiring processes while boosting employee engagement for better retention rates.
REITS also gather tenant feedback through surveys covering areas such as building amenity satisfaction levels, frequency of contact with building management teams’ effectiveness at managing properties onsite.
Additional findings regarding top-performing U.S.-based reits include:
98% engage community development programs
96% publicly disclose supplier screening procedures
78% specify board oversight related specifically to ESG matters within charters
76 % regularly provide boards with quarterly updates regarding overall company-wide performance pertaining specifically toward meeting established environmental goals
63 % link executive compensation to ESG performance
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