Khalid Husain, head of ESG at Cohen & Steers, participated in a video interview in conjunction with Nareit’s REITworks: 2022 Conference held on Sept. 12-13 in La Quinta, California.
Husain commented on how Cohen & Steers has integrated ESG into its processes, given that it is an asset management firm with funds that are in scope of European regulations. He noted that the firm has had ESG integrated into its products for a number of years, “but we think there’s an opportunity to balance portfolio construction with specific ESG criteria.”
The scope and number of ESG policies and regulations worldwide will continue to increase, Husain said, and noted that Cohen & Steers assesses companies through a mix of quantitative metrics as well as looking at the culture of the company.
Turning to climate risk, Husain said Cohen & Steers is interested in greenhouse gas emission trends over time, and what those numbers include. Scope 1 and 2 emissions are fairly straightforward to determine, he said, while Scope 3 is more complex.
When looking at companies that have set forward net zero targets, or Paris Agreement-aligned commitments, Husain said Cohen & Steers is interested in how they will deploy decarbonization pathways. That includes what sort of operating and capital expenditure will need to be deployed, what will be the payback on that investment, and how will tenant demand shift over time. A final consideration is how does it all relate to corporate strategy and capital allocation, he added.