Nareit’s first ESG Exchange event of the year showcased the 2020 Leader in the Light Award winners, leaders in sustainability representing a variety of sectors across the REIT industry. Nareit President and CEO Steve Wechsler began the webinar last week by congratulating the winners of each sector:
- Data centers: Digital Realty (NYSE: DLR)
- Diversified: Vornado Realty Trust (NYSE: VNO)
- Health Care: Ventas, Inc. (NYSE: VTR) and Healthpeak Properties, Inc. (NYSE: PEAK)
- Industrial: Prologis (NYSE: PLD)
- Office: Kilroy Realty Corporation (NYSE: KRC)
- Residential: AvalonBay Communities, Inc. (NYSE: AVB)
- Retail: Unibail-Rodamco-Westfield (OTCMKTS: UNBLF)
- Self-Storage: Extra Space Storage (NYSE: EXR)
Wechsler also announced that the 2020 Leader in the Light Most Innovative Award was presented to Kilroy Realty Corporation, and that the Leadership Personified Award went to Sara Neff, SVP of sustainability at Kilroy. Neff joined the presentation to offer her heartfelt gratitude for the achievement.
“One of the things I think that outsiders are always surprised about is that the members of Nareit’s Real Estate Sustainability Council (RESC) share information, and our goal is to help each other push our programs forward,” Neff said. “It is something that I have so valued about this community.”
Neff added that as climate change increasingly impacts REIT assets, RESC members working together are “force multipliers” in helping their companies combat climate change.
Fulya Kocak, Nareit’s SVP of ESG issues, also joined the session to introduce each award winner, who discussed their 2020 achievements and how those activities have shaped their perspectives for 2021.
Sormeh McCullough, energy and sustainability associate at data center sector winner Digital Realty, said that the REIT’s most notable sustainability work in 2020 was setting its carbon reduction goal with The Science Based Target initiative (SBTi). She said that by 2030, Digital Realty has committed to reducing its scope 1 and 2 emissions, or its direct and indirect company emissions, by 68% per square foot; and its scope 3 emissions, indirect emissions in its value chain, by 24% per square foot.
Dan Egan, SVP of energy & sustainability at Vornado Realty Trust, the diversified sector’s Leader in the Light Award winner, said Vornado’s Vision 2030 is a “6-point roadmap” to help the REIT achieve carbon neutrality in all of its buildings over the next decade.
Turning to 2021, Egan said: “I’m really interested to see how we emerge out of COVID-19, returning to work, and understanding how some of the changes that were forced upon us during the pandemic could be carried forth in a permanent way for the greater good.”
Carol Samaan, VP, corporate counsel and ESG at Healthpeak Properties, said her company is working on its 10th annual ESG report, but that its goal is never to rest in its pursuit of sustainability. Samaan added that Healthpeak looks at its ESG efforts holistically, and will use 2021 to explore innovative technology.
Ventas, which also won the health care sector Leader in the Light Award, created an internal task force to help its tenants and operators navigate the pandemic, according to Kelly Meissner, director of sustainability. “This was truly stakeholder engagement and action,” Meissner said.
Prologis, which was awarded the industrial sector award, launched a $5 million global relief fund in 2020 to support organizations on the front lines fighting COVID-19, according to Ying Yu, the REIT’s SVP of ESG. Prologis also donated 1.5 million square feet in 15 markets and more than $9 million in in-kind rent, she said.
Sara Neff of Kilroy Realty rejoined the webinar to discuss her company’s sustainability work within the office sector. She said that Kilroy made a commitment in 2018 to achieve carbon neutral operations, and met that goal last year. Neff added that Kilroy, which also won Nareit’s Most Innovative Award, will be focusing on scope 3 carbon in 2021, both within the construction materials the company uses as well as with its tenant emissions.
Mark Delisi, VP of corporate responsibility and energy management at AvalonBay Communities, said the REIT made significant progress on its diversity and inclusion program in 2020, including establishing a multi-year national partnership with the National Urban League that combines the REIT’s philanthropy and D&I efforts. AvalonBay, which took home the Leader in the Light Award for the residential sector, will be focusing on carbon and climate in the year—and decade—ahead, Delisi said.
Extra Space Storage took home the first self-storage sector award in the Leader in the Light’s 15-year history. Jeff Norman, VP of investor relations and corporate communications, said the company focused on its disclosures in 2020 in order to tell the Extra Space sustainability story.
“We believe that hiring and training and developing diverse top talent will be crucial going forward,” Norman added regarding Extra Space’s 2021 goals.
In a brief Q&A session at the end of the webinar, the panelists discussed the action items they believe that all real estate companies should consider in 2021, including leveraging technology and people, setting zero targets, and focusing on disclosures.