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.
Strengthening Board Oversight of ESG Factors to Improve Corporate Decision Making
Rexford Industrial Realty, Inc. integrates environmental, social, and governance considerations into every company decision, supported by robust board oversight of ESG, consistent stakeholder engagement, and proactive sustainability disclosure.
Board Oversight of ESG
In 2020, Rexford established an ESG committee with direct involvement from Howard Schwimmer and Michael S. Frankel, co-CEOs; Laura Clark, CFO; and the board of directors. The committee defines and leads the company’s ESG strategy and execution and engages the board on ESG matters during quarterly meetings.
Rexford’s board consists of members with diverse backgrounds and perspectives. To make this possible, the company and its nominating and corporate governance committee established a board skills matrix that helps identify the ideal diversity of experiences for new director candidates, which includes skillsets, ethnicity, and gender, among other considerations. This tool enables effective governance by ensuring there is a broad range of expertise and perspectives represented on a wide range of topics.
To ensure that company leadership decisions are in line with stakeholder expectations, Rexford consistently engages key stakeholders, including employees, tenants, and investors. In 2020, the company undertook a materiality assessment that targeted specific stakeholders and helped guide its strategy by identifying critical focus areas.
“We are driven by our commitment to reinvent the business of industrial real estate in infill Southern California by optimizing our positive impacts to the environment, our communities, tenants, employees, and shareholders. At Rexford, this unified purpose guides the decision-making principles of every team member, including our board of directors, as we continue to create value and elevate our ESG impacts.”
-Diana Ingram, Director and Chairperson of the Nominating and Corporate Governance Committee, Rexford Industrial Realty, Inc.
For its over 1,500 tenants, the company published a Tenant Sustainability Guide to provide suggestions on how they can reduce their energy, water, and waste footprints. Rexford collaborates with its tenants to obtain and report energy and water consumption data to improve efficiency of its over 38 million square feet of buildings. The company also conducts an annual tenant satisfaction survey and has an online portal to collect tenant feedback. Additionally, the company consistently communicates with investors on ESG efforts, and provides ongoing ESG updates.
To effectively inform its stakeholders of this work, Rexford expanded its ESG reporting and disclosures. Beginning in 2019, the company engaged a third-party consulting firm to conduct a cost-benefit analysis of its business strategy, which is unique in its approach of recycling buildings through Rexford’s repositioning and redevelopment of properties within infill, urban locations. In 2021, Rexford published its 2020 annual ESG report aligned with the Global Reporting Initiative (GRI) and Sustainable Accounting Standards Board (SASB) frameworks and included extensive ESG goals and targets. Most recently, the company completed a climate change risk assessment, issued its first green bond for $400 million, and committed to set science-based targets. Beginning with its 2021 annual ESG report, Rexford expanded its reporting to align with the United Nations Sustainable Development Goals (UN SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD) frameworks. The company will also report to CDP, in addition to GRESB.
By the end of 2022, Rexford plans to broaden board oversight of climate-related risk and expand its enterprise risk management (ERM) platform and business continuity plan to standardize its approach.
Rexford Industrial Realty, Inc. is a leading industrial real estate investment firm focused on creating value and positive community impacts by investing in, operating, and redeveloping industrial properties throughout infill Southern California.