Are you actively working on an ESG program, or considering one?
There are two high-stakes issues that companies big and small, near and far, are tackling in virtual boardrooms: COVID-19 response and social justice. The stakes with these issues are high enough that they can drown out other important initiatives within a business. The good news is that if you have an ESG program and a COVID-related health initiative and/or a DEI initiative those programs can actually make each other more successful when handled together.
ESG stands for Environmental, social, and governance, and it includes a set of standards for a company’s operations that investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how a company manages relationships with employees, suppliers, customers, and the community. Governance addresses a company’s leadership, executive pay, audits, internal controls, and shareholder rights. We often hear clients lament how challenging “S” can be for real estate companies – and they are right! But as our founder and CEO Tom Paladino has said many times over the past year – “Never waste a crisis”. The events of the past year+ provide opportunities to strengthen the “S” in ESG in a very authentic way.
Let’s talk about COVID. Companies worldwide created policies and practices in response to the COVID-19 pandemic, including steps to safeguard building occupants against the unnecessary risk of exposure to COVID and other viruses. Policies also addressed mental health and how to manage caregiving and work during such a tumultuous time. Companies do this because their employees are their most valuable asset, and finding ways to help them to be safe and successful- whether working from home or in an office – is important.
The real estate industry has been moving toward wellness and health for some time. The WELL and Fitwel certifications led to WELL Health Safety and Fitwel Viral Response Module launched in 2020 as part of a response to COVID operational-related safety challenges. COVID responses focus on issues such as ventilation, sanitation, and education – best practices that help maintain a safe and healthy work environment, COVID or not. Those pursuing these certifications for their owned or leased real estate portfolio will have measurable results that can be reported to GRESB, CDP, GRI, and the like.
Now let’s talk about DEI. The Black Lives Matter Movement resonated worldwide in the spring and summer of 2020 in response to the murder of George Floyd and others. Watching the global community come together to march and protest, putting their lives at risk early in the pandemic when little was known about transmission and treatment, was fretful and inspiring. This happened as the global business community also grappled with equity across gender and other metrics.
Like health and wellness, Diversity, Equity, and Inclusion (DEI) was gaining momentum before the 2020 protests, and now it is a critical part of the mainstream conversation about business performance. Studies are readily available about the value of diverse perspectives in board rooms and business decision-making, and we see companies identifying measurable targets around hiring/interviews, anti-bias training, external communications on DEI, policy adjustments to more inclusive language, affinity groups, and more.
Dov Seidman, Founder and Chairman of LRN said it well, “Political, social, environmental, biological, human, ethical and moral issues that were once considered tangential to the business agenda are now every day considered inescapably at the center of the business agenda. I think it’s fair to say that the pandemic has only accelerated the fusion of all the things that we kept apart from business in our personal lives. Everything has come together.”
Reporting and certifying take a lot of time, energy, and commitment. They also contribute to best practices and risk management at well-run businesses. So when your team inevitably finds itself considering a CSR or ESG reporting framework, or a COVID-readiness back-check, or a green building certification, take the time to consider how all of these efforts intersect with the business and how they intersect with each other. There’s no time to waste when moving a business forward, and stakes like occupant health, equity, and environmental responsibility couldn’t be higher.
If you would like help linking your ESG program to your business goals, please let me know. I’m here to help.
- WHY ENVIRONMENT, SOCIAL, AND GOVERNANCE (ESG) MATTER IN REAL ESTATE
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- FIVE WAYS YOUR SMALL BUSINESS CAN SUPPORT BLACK-OWNED BUSINESSES
- USGBC LEANS INTO SOCIAL EQUITY WITH NEW TOOLS
- GOING GREEN ISN’T JUST FOR THE BIG GUYS. SUSTAINABILITY ADVICE FOR SMALL BUSINESSES