07/10/2022 | by
Bob Bové Neuroscience Institute, Scottsdale, AZ. Photo courtesy of Physicians Realty Trust.

This case study was published in the 2022 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 32 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.

Leveraging Innovative Software and Low-Cost Efficiencies to Enhance Environmental Performance

Physicians Realty Trust is taking a proactive approach to managing its environmental impact through innovative software, low-cost efficiencies, and best practices in data and disclosure. Physicians Realty Trust defines no/low cost as measures funded through operating expenses that pay for themselves within one year. Together, these strategies reduce resource consumption, mitigate climate risk, and better serve the communities in which the company’s stakeholders live.

Innovative Software Systems

Physicians Realty Trust leverages specialized software from three vendors to measure environmental data at its properties, identify opportunities for improvement, and help the company to track progress toward its goals of:

  1. Reducing energy use intensity, scope 1 and 2 greenhouse gas (GHG) emissions intensity, and water intensity by 10% each over a three-year period based on a 2018 baseline;
  2. Increasing waste diversion by 10% over a three-year period based on a 2018 baseline;
  3. Reducing GHG emissions by 40% by 2030 from a 2018 baseline; and
  4. Identifying existing and future climate risks at each of the company’s properties to implement mitigation strategies.

In addition, Physicians Realty Trust uses climate risk software to see the greatest risks to its property locations before they occur so the company may implement preventative strategies and limit future risks.

Efficiency Measures

To help the company meet its energy use, emissions, water use, and waste diversion goals, Physicians Realty Trust leverages low-cost efficiencies. In 2020 and 2021, the company took a collaborative approach to this concept and challenged each property manager to implement at least one low- or no-cost measure at their properties. A significant factor contributing to the success of this low- and no-cost efficiency challenge was resource sharing between properties and their respective managers. Some of the efficiency measures included building automation system upgrades, energy audits, thermostat upgrades, and installation of high-efficiency water and energy-saving measures through upgrades certified by the EPA’s WaterSense Program.

“As part of our plan to decrease carbon emissions and meet aggressive energy reduction goals, Physicians Realty Trust drives environmental change through strategic upgrades of core building components, such as lighting and building automation. Simultaneously, our management teams encourage behavioral changes through highly successful educational efforts to promote a sustainability-focused mentality among our health care partners. We call these opportunities ‘low- and no-cost efficiencies.’”
-Ryan Yetzer, Senior Manager, Construction and Sustainability, Physicians Realty Trust

Data and Disclosures

To measure the challenge’s success, Physicians Realty Trust created and maintained a dashboard of the actions taken. On average, participating properties saw an 8.3% year-over- year reduction in carbon emissions. As a result of the comprehensive data monitoring and tracking across its properties, the company also aligned its sustainability platform with the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) guidelines.

Physicians Realty Trust’s work in ESG has earned it several prestigious awards and recognitions, including a 2021 ENERGY STAR Partner of the Year Award and 28 cumulative IREM Certified Sustainable Property (CSP) designations. The company looks forward to leveraging its property-level tracking and monitoring data to continually refine its reporting and management of environmental impacts, including its climate risk mitigation strategy.

Physicians Realty Trust is a publicly-traded REIT focused on medical office buildings (MOBs), including outpatient facilities, surgery centers, and cancer centers.

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