REITworld Panel Examines Impact of COVID-19 on ESG Strategies

A panel of REIT executives and investors examined the impact of COVID-19 on ESG strategies across the industry and discussed the ESG changes they expect to occur as a result of the pandemic and other key events of 2020, such as the focus on social justice issues.

Edward Nekritz, chief legal officer and general counsel at Prologis, Inc. (NYSE: PLD), and Catherine Creswell, SVP and director of investor relations at Vornado Realty Trust (NYSE: VNO), co-moderated the panel. Participants included: Carolyn Carter Singh, EVP and chief talent officer at Brixmor Property Group Inc. (NYSE: BRX); Troy McHenry, EVP, chief legal officer, general counsel, and corporate secretary at Healthpeak Properties, Inc. (NYSE: PEAK); Ben Myers, VP, sustainability, at Boston Properties, Inc. (NYSE: BXP); and Mack Abbot, VP, investment stewardship, at BlackRock.

Executives described some of the health and wellness initiatives they have employed during the pandemic.

Singh, co-chair of Nareit’s Social Responsibility Council, noted that two of Brixmor’s offices are open on a voluntary basis. The company addressed ventilation, updated filters, and decided to run HVAC systems early, before employees arrive for work. Other changes involve floorplan layout, she said.

Brixmor has also focused on mental health issues. “We think this is critical,” Singh said. In addition, the company has offered increased flexibility to working parents and services such as Friday meditation.

Boston Properties, meanwhile, implemented a comprehensive set of measures across its portfolio because “we understood that uniformity was incredibly important,” Nareit Real Estate Sustainability Council Chair Myers said. The REIT looked at ventilation, filtration, and testing and monitoring, he noted, in addition to doing a lot of one on one tenant engagement.

Turning to governance matters, Nariet Corporate Governance Council Chair McHenry pointed out that the pandemic has resulted in increased communications. Healthpeak had developed crisis management protocols before the pandemic, he said, so the crisis gave the company a chance to test them, he explained. In addition, Healthpeak held virtual town halls, including question and answer sessions where nothing was off limits, he said.

Abbot at BlackRock noted that REITs had been doing a “fantastic job of communicating with their investors.” He added that “I do think this was a more existential crisis to our sector than others,” and noted that corporate strategy and capital allocation have been “really top of mind.”

REIT executives also discussed ways in which cross-disciplinary ESG engagement has increased within companies during the pandemic.

Singh said Brixmor used to take a “silo” approach to ESG. “We take a much more proactive approach now,” she noted.

REIT executives also commented on the impact of the increased focus on social justice issues on their ESG strategies.

Singh highlighted that this year, for the first time, Brixmor provided a clear picture of the company’s racial and gender diversity makeup in its corporate responsibility report. The process made clear that “we need to increase diversity,” she said.

For his part, Myers said Boston Properties has been “doubling down” on social metrics. “I feel like there’s a lot more focus and effort on improving not only our disclosure and transparency on social performance indicators, but also creating real impactful outcomes,” he noted.

Healthpeak, meanwhile, is striving to ensure it creates the “best team pulled from a diverse pool,” McHenry said. To achieve this, the company will focus on leadership training, he added.

Singh stressed that in the current climate, “employees are expecting more from leadership….We’re working hard to ensure we’re talking more about social justice. I think we come out of this crisis more connected.”

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