Nareit’s REITalent series shines a spotlight on individuals with various roles within the REIT industry and looks at the unique career paths they have taken.
Most recently, Nareit spoke with Ethan Gilbert, director of ESG at Prologis (NYSE: PLD), about his career in ESG and advice he has for those looking to join the industry. Find current job opportunities available with Prologis.
What are some of your key responsibilities as Director of ESG?
One of my big ESG responsibilities is reporting. To continue to be successful, you must be able to reflect on and show what you're doing to make an impact. In addition to our annual sustainability report, we've been doing a lot more to include sustainability information in some of our other financial disclosures. We've included an ESG section in our corporate annual report, our 10K, and our annual proxy statement to shareholders, as well as overseeing our annual reporting to several of the main assessments for ESG and sustainability: Global Real Estate Sustainability Benchmark (GRESB); S&P Corporate Sustainability Assessment, formerly known as DJSI; and CDP, formerly the Carbon Disclosure Project.
Because Prologis operates in 19 countries on four continents, I have a unique opportunity to be a promoter and a connector within the organization and across our various teams around the globe. I'm helping to promote best practices for sustainability across those different countries and bringing together the efforts of teams that are doing innovative and exciting things in sustainability in one region so that those efforts can be deployed in other Prologis regions, as applicable.
Has your career path always been focused on ESG or is that something that you transferred into later in your career?
It was actually a little bit of both. I knew very early I wanted to get involved in sustainability issues, but I wasn't immediately in the corporate ESG space. I spent a few years working for a nonprofit organization focused on environmental issues related to agriculture, and through that I realized very quickly that my opportunities for making the biggest impact were going to be in the corporate space.
I really admired the pace of progress that organizations and businesses could achieve as it pertains to sustainability, so after I completed my master’s degree in environmental science and policy from Johns Hopkins University, I found an opportunity to break into the corporate ESG space. This is really where I think I've found my calling.
Have you noticed an increased focus on ESG issues in recent years?
Absolutely yes, and I think a lot of it has been driven by an awakening and a greater appreciation for the challenges we face globally and the role business plays in addressing many of these significant societal issues. There is a lot of pressure coming from the investor stakeholder, because they're getting pressures from their own investees. For employees, this is a top-of-mind issue for how to recruit and retain the best talent. People want to work for an organization that's committed to making a positive impact through a robust ESG program.
What would you say are some of the biggest changes regarding ESG in commercial real estate?
One very exciting emerging aspect of ESG is green financing. Many commercial real estate players have taken advantage of this as a way of attracting a newly focused group of investors, and particularly fixed income investors, that have an appetite for investing capital in a green bond. Since Prologis issued its first green bond in 2018, we've seen a lot of appetite as well as increased expectations around how green bonds are making an impact. I believe part of this comes out of a new focus coming from Europe, where they're looking to increase the stringency associated with green bonds to ensure that they truly are making positive environmental or societal impacts.
What would you say is your greatest accomplishment in this role?
When I came to Prologis, we were at a place of wanting to elevate our focus on how we told our ESG story. We don’t want the story to be “we want to do ESG because it makes us feel good.” Rather, we want to do ESG because we know there is inherent business value associated with doing the right thing for our customers, investors, communities and colleagues. Taking care of the planet takes care of everyone, in reality. That was something I was very adamant about bringing to our team. That we not tell a fluffy story about sustainability, but really find and show meaningful ways of measuring and demonstrating to our stakeholders that ESG not only creates positive societal and environmental impacts but also helps drive benefits to the bottom line.
What would you say is one of the bigger challenges that you face in this position?
I think there is still some skepticism that there is business value in ESG because, in a lot of ways, it's not a direct one-to-one causation of dollars and cents resulting from an initiative. This means some folks need to have the picture laid out for them in clearer ways, so that they can understand that doing things for sustainability may appear as a cost now but have positive business ramifications in the future. Fortunately, I think we're seeing greater buy-in. We've got tremendous support from our executive leadership in promoting sustainability and wanting sustainability to be part of the Prologis brand. Simultaneously, we are still going through a process of educating and helping folks think through how to incorporate ESG into the business in ways that have meaningful ESG impact.
What skills would you say are most important in your position?
It's a mix of quantitative and qualitative. From the quantitative side, there is heightened expectation that you are able to show the impact you're making in measurable ways. And from that point of view, you must have a very keen attention to detail. The time you spend sorting through Excel spreadsheets and making sure that fine-tuned numbers and metrics are correct is a key aspect ensuring the success of your program. The qualitative side, I think, also pertains to how you communicate. It’s critical to get to the point quickly and make your case in a concise and compelling manner.
What advice would you give to someone who's interested in working in real estate ESG issues?
Understand the real estate business. I did not come from a real estate background, but I think what has helped me to be a more successful sustainability or ESG member of the Prologis team is how much I've tried to learn and teach myself about our real estate and the core business. Understanding the core business can help you think about opportunities for new products or services that have an ESG focus that in turn align with the overall goals of the business.