This case study was published in the 2023 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 20 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.
Hudson Pacific Properties’ (HPP) “Better Blueprint” platform lays out the REIT’s commitment to fostering sustainable, healthy, and equitable cities. At the heart of its approach is effective ESG governance–a paramount tool to carry out the organization’s ambitious long- term sustainability initiatives.
HPP’s Better Blueprint ESG platform frames up an ambitious long-term vision for advancing sustainable, healthy, and equitable cities. The REIT has invested in a robust ESG governance approach that leverages both top-down and bottom-up methods for ensuring accountability and progress.
HPP’s senior vice president of innovation, sustainability, and social impact oversees the Better Blueprint platform in partnership with a cross-functional ESG leadership team comprised of senior executives from engineering, operations, human resources, investor relations, and legal. The team convenes regularly to discuss major strategic initiatives and events, such as how the firm is preparing for the anticipated requirements of the SEC’s Climate Disclosure Rule. The team also elicits feedback from the company’s sustainability and DEI councils, both of whom are composed of managers throughout HPP that actively engage with the ESG leadership team.
Another governance strategy that HPP employs to achieve its Better Blueprint goals is linking executive compensation to ESG performance. The REIT’s metrics for long-term compensation, such as stock options, include audited ESG indicators such as number of buildings that are LEED-certified. Short-term incentives include more qualitative metrics such as performance on ESG ratings frameworks, ESG reporting accomplishments, progress towards SBTi targets, and progress towards supplier diversity targets.
At the property level, all HPP operating properties maintain a property-specific Better Blueprint Action Plan outlining how teams are carrying out key ESG initiatives and expectations to adhere to the company’s ESG policies, which are available publicly on the REIT’s website. Key initiatives receive additional programmatic support—for example, to support HPP’s zero waste goal, the REIT has built a network of “zero waste champions” that lead property-specific waste reduction efforts such as replacing personal desk-side trash bins with communal bins in high-traffic areas of tenant office space—a best practice which leads to higher rates of recycling and composting.
Property sustainability initiatives are monitored through the company’s annual operational audit process, ongoing environmental data management program, and green buildings certification processes. Properties that exceed expectations are recognized through HPP’s annual Better Blueprint Awards program, which showcases different sustainability initiatives created by property teams that have led to impactful outcomes across various categories. HPP’s robust governance structure allows the REIT to effectively and efficiently manage its ESG activities, resources, and plans. The Better Blueprint takes a bottom-up approach fostering sustainability leadership with property teams, while the executive leadership team supports ESG initiatives from the top-down.
Hudson Pacific Properties is a REIT serving dynamic tech and media tenants in global epicenters for these synergistic, converging, and secular growth industries. Hudson Pacific’s unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space.