REITs have significantly increased their focus on ESG initiatives and reporting over the past several years, according to panelists participating in a June 2 webinar, “REITs and ESG: Challenge and Opportunity,” co-hosted by Nareit and Bloomberg Intelligence.
“Most REITs have an ESG framework in place. That was not the case seven years ago,” said Mona Benisi, head of sustainability for global real assets at Morgan Stanley Investment Management. “Today, 75% to 85% of REITs have ESG targets and are reporting on their data.”
Panelists reported a number of factors are leading the REIT industry to take a greater interest in ESG, including growing interest from tenants and regulators. But investor focus on the subject is near the top of the list.
“A few years ago, ESG was something most REIT management teams didn’t have much involvement in. But investors did,” said Bradford Stoesser, global industry analyst at Wellington Management Company. “Now, corporates are engaging on the topic.”
The increased commitment to setting ESG targets and reporting results has had a positive impact on REITs’ financial results, the group agreed.
“The more disclosure improves, the more companies improve their performance,” noted Revan Arkan, senior ESG analyst at Bloomberg.