By its very nature, the real estate business has a significant environmental footprint. As long-term owners and investors, REITs and publicly traded real estate companies are well aware of the enduring impact of their strategies and operations. Our industry has consequently made the importance of ecofriendly practices and policies an article of faith.
However, the concept of sustainability has evolved over time to refer to more than what is commonly associated with “being green”—utilizing clean energy, minimizing waste and other environmentally conscious principles. Sustainability now includes the social and governance matters that are receiving a growing amount of attention from boards of directors, investors, equity analysts, the media and other stakeholders.
Many of the companies mentioned in this sustainability-themed issue of REIT magazine have robust environmental programs. Yet, this edition also shines a light on the “S” and “G” of ESG.
For example, the feature “Well Rounded” examines the ways in which REITs are formalizing and refining their social and governance initiatives in the never-ending process of building more effective sustainability platforms. That article includes a sidebar on NAREIT’s efforts to promote the greater involvement of women in REITs and real estate investment. In “Green Capital,” institutional investment managers discuss what they are looking for regarding how companies approach all three planks of ESG.
At AvalonBay, we seek out ways to help provide the locales in which we operate with a better way of life by creating durable, mutually beneficial partnerships. That means devoting our resources to philanthropy and initiatives that will have lasting, positive effects on the surrounding communities, including community preparedness and disaster relief, affordable housing and support for the disadvantaged.
On the governance side, we abide by the best practices and principles that have bolstered the REIT industry’s overall reputation for transparency. We also publish an annual corporate responsibility report that documents our performance and establishes goals to drive short- and long-term strategies. This report not only helps explain AvalonBay’s sustainability objectives, but also gives stakeholders a means to hold the company accountable.
Our experience developing and fine-tuning an effective ESG program is no different from those of other REITs and real estate companies. The guiding tenets of sustainability are growing more rigorous for all of us. Meanwhile, stakeholders have appropriately increased their expectations for how companies address pertinent issues.
The REIT approach to real estate investment welcomes the scrutiny of the public markets, which all but assures that our companies can’t fall short of those expectations. Living up to them will require an ongoing commitment to a well-rounded sustainability program.
Chairman & CEO
AvalonBay Communities, Inc.