Nareit’s annual Leader in the Light Awards and Diversity, Equity & Inclusion (DEI) Recognition Awards are important touchstones for demonstrating leadership within the REIT industry across the many facets of environmental, social, and governance (ESG) issues.
Environmental stewardship, social responsibility, and good governance are core attributes of the REIT industry. Together they are increasingly important to the communities in which REITs operate and to investors in REITs.
While focus on the headline aspects of ESG has been most visible until now, the past few years have underlined the urgent need to ensure that all of society, including the REIT industry, supports the drive for DEI in workplaces, businesses, and communities as an integral part of ESG.
Read on to hear directly from the 2021 Leader in the Light and DEI award winners about their top priorities in 2022.
Leader in the Light Award Winners
Leadership Personified Award
Dan Egan, SVP, energy and sustainability at Vornado Realty Trust (NYSE: VNO), was presented with the Leadership Personified award.
The 2021 Leader in the Light Awards are based on the results of the Global Real Estate Sustainability Benchmark (GRESB) Annual Survey, as well as scored responses to supplemental questions by outside judges. Eight property sector awards and one individual leadership award were presented at Nareit’s REITworld: 2021 Annual Conference in November.
What does it take to be asustainability leader in the real estate industry today?
Based on my experience, sustainability leaders share a number of common characteristics. Sustainability leaders are consensus builders, bringing together groups to arrive at a collective decision that is best for an organization.
We are translators, often having to explain and interpret new and at times abstract concepts to a wide-ranging audience. We are agents of change and often must inspire new approaches to owning, managing, developing, or operating real estate. We are also team players when we support initiatives brought on by our colleagues that contribute holistically to our broader ESG goals.
I have found that sustainability leaders are generous with their time and sharing their perspective among peers to contribute to industry-wide progress on global critical issues, such as climate change. All in all, sustainability leaders in the real estate industry understand that success is not accomplished alone, but rather is achieved by bringing together diverse groups of stakeholders across an entire business. And it certainly helps when the leaders in an organization provide the top-down support to facilitate change, as is the case at Vornado, where our track record in sustainability leadership includes eleven consecutive years of being named a Nareit Leader in the Light.
What set you on the path to a career in sustainability?
While I have always worked in commercial real estate since graduating from college, Vornado afforded me the opportunity to combine both my professional and personal interests to pursue a career in sustainability.
I was introduced to Vornado in 2009, when I was earning my MBA at City University of New York (CUNY) and was fortunate enough to land a graduate internship with the company through CUNY’s Building Performance Lab. Through this program, we were focused on engaging with Vornado’s office tenants on a cloud-based submetering platform and encouraging them to leverage the platform to reduce their energy consumption and realize the financial and environmental benefits from these efforts.
Since that time, sustainability in real estate has grown very quickly and now encompasses so many different parts of the business. I’ve been encouraged by Vornado’s leadership over the years to cultivate, broaden, and grow our sustainability program—from where it began in operations, to leasing, development and construction, accounting, acquisitions and capital markets, marketing, legal and compliance, risk management, and BMS, LLC, our industry-leading green cleaning company. The collaborative environment at Vornado supports great work for sustainability, and more broadly, ESG.
Do you have advice for individuals seeking a career in real estate sustainability?
There are many different entry points to sustainability in real estate. While I began in operations, others have started in the legal profession, investor relations, or development, for example. There are certainly opportunities across an organization to make an impact so one could start by leveraging his or her specific interests or areas of expertise to understand how that area can contribute to a company’s overall objectives.
Nareit’s network of ESG professionals have diverse backgrounds and experience, but all have been successful in assembling the right groups in their organization to curate an effective strategy. No question, at Vornado, sustainability is a team effort. I would also recommend being an active participant in Nareit’s rich network; best practices and employment opportunities are generously shared among peers.
REIT magazine asked the winning companies in eight property sectors to identify their main ESG focus for 2022.
Data Centers - Digital Realty (NYSE: DLR)
In 2022, we are looking to expand our carbon reduction activities in response to our science-based target. Specifically, we look to focus on our supply chain sustainability efforts. This will involve refining our approach to better quantify and improve upon the embodied carbon in our construction activities and implementing a robust supplier engagement program. We will also continue our efforts to prioritize carbon reduction activities and innovative sustainability solutions in global markets where we can make the biggest impact.
We are also making strides in our global water strategy, which is driven by a holistic understanding of what water means to Digital Realty and implementing projects locally at locations prioritized by the greatest water risks. We are working on refining and reporting on advanced, normalized metrics such as water usage effectiveness (WUE) for our data centers.
Lastly, we are excited about the continued progress of our diversity, equity, and inclusion (DEI) program. In 2022, we will be advancing our five Employee Resource Groups (ERGs), community giving program, talent recruitment and development pipeline, and supply chain diversity initiatives.
Diversified - JBG SMITH (NYSE: JBGS)
In 2021, JBG SMITH achieved carbon neutrality for its operating portfolio; this move accelerates our planning toward tackling net zero emissions. Understanding the full spectrum of GHG emissions and quantifying more of our scope 3 and supply chain emissions through clean data analysis is key in this stage.
JBG SMITH’s planned next step to maintain long-term operational carbon neutrality includes the development of an offsite renewable energy strategy, which is expected to replace a significant portion of annual renewable energy credits (REC) purchases and bring additional renewables to the national electrical grid. We will be operationalizing planned decarbonization through energy efficiency projects and conducting more energy assessments.
Another impact project will be to benchmark various aspects of social value along the real estate chain and specifically in communities in which we serve.
Health Care - Ventas, Inc. (NYSE: VTR)
We are laser focused on combating climate change and recognize the importance of minimizing carbon emissions as quickly as possible and ultimately achieving net zero carbon emissions.
Building on our existing science-based target to reduce carbon emissions and our substantial energy efficiency investments over the past several years, our path to net zero will initially focus on continued energy reduction through energy efficiency investments in our portfolio and increasing renewable energy.
We will continue to make significant investments in energy efficiency through LED lighting, HVAC optimization, and other technologies appropriate for our portfolio such as intelligent kitchen hood controls in our senior housing portfolio. We will also strive to increase renewable energy in our portfolio, through a combination of on-site generation and off-site procurement.
Industrial - Prologis, Inc. (NYSE: PLD)
In 2021, not only did we make steady progress against our ESG goals, we set ambitious new goals, including reaching carbon-neutral construction globally by 2025 and achieving third-party certifications for all new development and redevelopment projects.
In the new year, our ESG efforts will create even more value for our stakeholders and bolster our customer-focused sustainability solutions. As an example, we’ll continue to build on our solar program, which already has allowed our customers to reap the financial and operational benefits of clean energy to the tune of 31 megawatts of installed solar capacity.
We will continue to expand our unique Community Workforce Initiative (CWI), which trains people for logistics careers, across the U.S. and internationally. We’re working toward a goal of training 25,000 people by 2025. Prologis also is committed to nurturing a diverse and inclusive work environment. This includes establishing a consistent and equitable framework for recruitment, promotion, and pay to ensure we hire and develop diverse talent.
We’re committed to industry-leading work that addresses today’s environmental and social challenges. We see 2022 as a critical year on measurable progress, especially as we look ahead to our 2025 targets.
Office - Kilroy Realty Corporation (NYSE: KRC)
We’re looking forward to 2022 and another year of accelerating progress on ESG in collaboration with our tenants, investors, community members, value chain partners, and other stakeholders. While we maintain focus on our goals around continued reductions in energy, carbon, water, and waste, as well as increasing clean energy procurement, we will further expand our efforts in the following areas:
- Expanding our scope 3 inventory and reduction efforts. We are already underway tracking the embodied carbon associated with the construction materials for our development projects, and we have set an embodied carbon reduction goal of 30% by 2030 and 50% by 2050. We are also increasing our focus on collaboration with tenants to track and reduce their emissions associated with operational energy use and employee commuting to and from their leased office space.
- Boosting our efforts to enhance and expand our DEI policies and programs with a focus on community engagement and creating employee resource groups that that will foster an environment dedicated to employee equity, inclusion, and mentorship.
- Piloting proptech solutions that will serve to enhance employee and tenant health and wellness while simultaneously helping us meet our sustainability goals. 2022 will see Kilroy scale up these solutions portfolio-wide.
Residential - AvalonBay Communities, Inc. (NYSE: AVB)
The key trend on the horizon for environmental issues is the move to low/no carbon and net zero company commitments.
Over the past few years, AvalonBay’s science-based targets put us on the path toward low/no-carbon and net zero commitments company-wide. We also announced our partnership with the National Urban League and committed to 2025 Diversity in Leadership Goals. On the governance front, AvalonBay focused on risk management, specifically climate-related risks.
AvalonBay’s 2022 plans include three ESG focus areas:
- Continuing progress on our science-based emission reduction targets through materials decarbonization, building efficiency, and renewable energy.
- Furthering our inclusion and diversity efforts by working to achieve our diversity in leadership goals and through our partnership with the National Urban League.
- Improving climate resiliency and managing climate-related risks and opportunities across the portfolio.
Retail - Brookfield Properties
We are proud of the work we have done this past year and thankful to be recognized by Nareit with this Leader in the Light Award. As a leader, we are committed to improving upon our past successes and have already begun to chart our path forward.
Looking ahead, we will be formalizing our long-term plan, aligning our efforts with Brookfield Asset Management’s commitment to the Net Zero Asset Managers Initiative, which pledges net zero greenhouse gas emissions by 2050 or sooner. In support of this effort, we will be developing a science-based target and short- to mid-term ESG objectives
We will continue to enhance our connections with the communities we serve through social initiatives with a focus on education, hunger, and diversity and inclusion. We have assessed our entire portfolio for potential climate risks and are actively developing mitigation plans, where appropriate, to minimize our risk. As a company, we have made a great deal of progress thus far and are committed to improvement going forward.
Self Storage - Extra Space Storage, Inc. (NYSE: EXR)
Looking ahead to 2022, there’s a lot of good things on the horizon. Two that are top of mind for us are our solar program and social initiatives.
We’re going to continue our focus on our solar program. We’ll be entering our 12th year of investing in solar for our properties. It’s been a great initiative that is good for our shareholders, customers, employees, and communities, as well as the environment.
We are seeing opportunities to focus on the “S” in ESG as well. Extra Space has always prided itself on being a great place to work, and with an increasingly competitive labor market, making sure we continue to recruit, retain, and develop the best team will be a top priority. From our call center to our stores to our headquarters team, we want the best people in every position—and we want those people engaged and happy to work at Extra Space.
DEI Award Winners
Individual DEI Award
The third annual Diversity, Equity & Inclusion Recognition Awards, presented at Nareit’s REITworld: 2021 Annual Conference in November, honor Nareit members that have demonstrated their commitment to the advancement of diversity, equity, and inclusion (DEI) within their companies as well as within the real estate industry at large.
Carolyn Carter Singh, EVP and chief talent officer at Brixmor Property Group Inc. (NYSE: BRX) received the individual DEI Award.
What are you most proud of that Brixmor has achieved in DEI?
We designed a company-wide “Big Brain” event with an engaging speaker on DEI. The event was co-hosted by Jim Taylor, Brixmor’s CEO, and the D&I Council. It served as a wonderful introduction for the council and a clear message of its importance as it relates to our business and culture. The post-event survey showed this was one of the most highly rated Big Brain events ever. As a follow-up, council members led a book club for “Inclusify” by Stephanie Johnson.
Brixmor conducts a biennial employee survey to measure engagement and solicit employee feedback via an anonymous forum. These are indicators of an environment of inclusivity:
- 97% of employees say they feel like they “belong” at Brixmor;
- 96% see others using behaviors that foster inclusion; and
- 97% believe that their opinions matter.
I am also very proud that Brixmor develops DEI plans at all levels:
Early career: We are focused on increasing the number of development programs and the number of employees within them. These are two-year programs in real estate finance, leasing, property management, and construction. Employees receive growth plans, training, feedback, and guidance to move up through the organization.
We have also increased the number of summer internship opportunities and made the commitment to offer full-time roles prior to graduation. (The company’s previous practice was to wait for an opening.) Importantly, hiring for the development programs and internships is being performed with a focus on diverse candidates using organizations that seek to provide employers with diverse college student applicants and job boards with diverse followings.
Executive and Board: We have instituted the Rooney rule for hiring at the executive and board levels ensuring a diverse slate of candidates will be assembled and considered for any open roles.
For all levels: We focus on pay parity and have developed a best-in-class return-to-office plan that is supportive of employees from all backgrounds. We have also designed engaging presentations, trainings, and conversations around DEI.
How does pay parity fit within the context of DEI efforts?
We began analyzing and reporting on pay parity about four years ago. The reports and, importantly, the discussions around the topic inform compensation packages at the time of hiring, annual reviews, and promotions.
The company very proudly reported results in our 2020 Corporate Responsibility report of almost no gap in pay in both gender pay parity and race/ethnicity pay parity when viewed on a role/like-role basis.
What’s ahead for Brixmor in DEI efforts?
There is a lot more work to do on Brixmor’s goal of building a team that reflects the diversity of the communities we serve and to continually enhance inclusivity. Something I am especially excited about is our employee resource group (ERG). In addition to helping move the company closer to its purpose, our ERG members will have opportunities to step up in meaningful ways.
There will be real leadership opportunities that will support further personal and professional development, in employees’ specific areas of expertise. This group will become, I hope, the leaders of Brixmor’s future.
REIT magazine asked representatives of the gold, silver, and bronze award-winning companies to discuss their top priorities for advancing DEI.
Gold - Equity Residential (NYSE: EQR)
At Equity Residential, we celebrate diversity and are fostering a culture of belonging by elevating and celebrating cultural differences. We understand how culture shapes behaviors and the critical role cultural awareness and competency must play within an organization to truly create a safe and equitable work environment for the success of all.
EQR has developed a strategy to build cultural awareness and competency at all levels throughout our organization. Our strategy was designed to meet people where they are in their diversity and inclusion journey of awareness and understanding, in order to help our employees recognize the importance of understanding cultural differences and how they may appear in the workplace, which can affect day-to-day interactions and behaviors. Our strategic programs and initiatives expand cultural awareness and competency and have helped our managers and employees grow culturally, demonstrate empathy, and appreciate differences, and have empowered them to communicate more clearly to avoid misunderstandings.
Building cultural awareness and competence has helped our employees feel safe, respected, and connected, which makes it clear that not only do they belong at EQR, but have joined a community where everyone can thrive.
Silver - Ventas, Inc.
Our top DEI priority is to establish and execute ambitious, attainable, and authentic DEI goals in the key areas of people, culture, financial and investment, and philanthropy, industry, and community engagement. Our overarching mission is to drive lasting change within Ventas, our communities, our commercial real estate industry, and the broader environment,
Ventas’s 40-plus strong, cross-functional DEI committee has dedicated its efforts in 2021 to cataloging and documenting our current activities, evaluating best practices across a variety of industries, and establishing a baseline of current performance against which we can actively measure our progress. The DEI committee represents every level of our company, is chaired by our CEO, and reports to our board—a level of visibility that drives high engagement and accountability in DEI matters.
Our team has developed specific goals for each area of our published DEI framework where we believe Ventas can use its current strengths and business activities to make a tangible and meaningful impact. We will showcase these goals in our 2022 corporate sustainability report and demonstrate our progress toward them in a transparent way. This approach will drive structured action that is designed to advance DEI throughout our sphere of influence and deliver better business performance.
Bronze - Equinix, Inc. (Nasdaq: EQIX)
Our top priority is to continue to embed diversity, inclusion, and belonging (DIB) into the fabric of our business while holding ourselves accountable to sustained, transparent, and measurable change. To aid in that effort, we are working to empower global teams to amplify employee networks, identify barriers, and promote inclusion at the local level.
We are igniting our WeAreEquinix groups—employee-led teams that have formed across the globe. With added resources dedicated to these teams, they are empowered to focus on the pillars on which they were founded, which include: diversity, inclusion, and belonging; Equinix Employee Connection Networks (our name for ERGs); and wellbeing. These teams provide opportunities for learning, host events, and share feedback to Equinix’s DIB Council and global program leaders who help shape our DEI strategy.
These efforts are further supported by our recent undertaking of a self-identification initiative called “I Matter” in which all employees were invited to share data across identities, including race/ethnicity, sexual orientation, gender identity, and disabilities. With the data gathered, we will better understand our employee base and identify gaps in representation and employee experience. And with our leaders and WeAreEquinix teams, we will be enabled to respond to these insights in a localized and meaningful way.