10/11/2023 | by

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.

Mah-Ze-Dahr Bakery, National Landing, VA. Photo courtesy of JBG SMITH.

JBG SMITH has long taken a multilateral and collaborative approach to implementing tangible, effective, and strategic ESG efforts. In 2022, driven by the organization’s commitment to transparency and the evolving regulatory landscape, JBG SMITH introduced measures to bolster preparedness for future compliance as it relates to ESG disclosures.

Prior to the SEC proposing the climate-related disclosure rule in March 2022, JBG SMITH took measures to improve the accuracy and completeness of all publicly disclosed ESG data by enhancing and formalizing robust processes for the preparation and review of this data. To accomplish this, the company established a cross-functional team comprised of members from the sustainability, accounting, human resources, and impact investing teams, who worked together with JBG SMITH’s internal audit partner to assess how the data was prepared and reviewed, and to identify potential gaps in the processes that could result in inaccurate or incomplete data. The outcome resulted in formalized processes and internal controls that serve as a foundation for obtaining third-party assurance over its ESG data. The controls and processes have already been implemented for preparing and reviewing data and key performance indicators (KPIs) relating to carbon emissions; water, waste, and energy use; company demographics; and the preservation of workforce housing units. The next step will be to obtain third party assurance on each criterion’s KPIs.

JBG SMITH Tenant Service Center, National Landing, Arlington, VA. Photo courtesy of JBG SMITH.

A secondary measure taken this year was the establishment of JBG SMITH’s inaugural ESG Committee, responsible for identifying ESG risks and opportunities while ensuring compliance with guidelines from the SEC and other regulatory bodies. The committee is overseen by the board of trustees and is comprised of leaders from each business unit–ensuring a comprehensive coverage of perspectives. In the short-term, the committee has been tasked with updating the company’s climate risk assessment strategy to include transition and financial risks and amending ESG and human rights policies.

Lastly, during the fall of 2022, JBG SMITH conducted a series of ESG roadshows to engage with key shareholders. The objective of the conversations was to review existing ESG practices and progress, further understand investor priorities, and gain feedback on governance and compensation items. The conversations yielded productive outcomes and have prompted the planning for future initiatives.

Through these efforts, JBG SMITH has elevated and formalized its ESG processes and procedures. Informed by input from key investors and business unit leaders, these measures not only integrate responsibility for ESG throughout the entire organization, but also prepare JBG SMITH as regulatory changes come into effect.

JBG SMITH is a company that owns, operates, invests in, and develops a dynamic portfolio of mixed-use properties in the high growth and high barrier-to-entry submarkets in and around Washington, D.C. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods.

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