Ruth Tang, partner, asset management, at KPMG LLP, participated in a video interview in conjunction with Nareit’s REITworks: 2021 Conference.
ESG has become a “must have” for companies, rather than a “nice to have,” Tang said. “Companies are talking about how to assemble a more rigorous and credible reporting process. We’re seeing ESG being taken a lot more seriously now…we’re seeing a surge in reporting” as companies either believe they have a role to play in reducing climate change or impacting social issues, or simply due to stakeholder pressure, she added.
Tang noted that a recent KPMG benchmark study that looked at 10 large public REITs showed that half of the companies had assurance reports over their ESG metrics. “Being able to be confident enough about your data that it can go through the rigor of an assurance process is a whole other level,” she said.
As for the next potential changes in ESG reporting that should be on the REIT industry’s radar, Tang pointed to the anticipated SEC rulemaking later this year.
Sustainable finance is another emerging issue, Tang said: “Reporting ESG metrics back to the lender will soon be a normal thing.”