During Nareit’s May 24 webinar and LinkedIn Live broadcast, The Green Economy: ESG Career Paths in Real Estate, panelists discussed how hiring for ESG roles has evolved over the last few years; shared tips for gaining the skills and knowledge to become a leader in the ESG space; and provided insight into what it’s like to work in ESG for a REIT.
Nareit Senior Vice President of ESG issues Fulya Kocak moderated the conversation between Kurt Harrison, co-head of the global sustainability practice at Russell Reynolds Associates, Kim Pexton, vice president of sustainability at JBG SMITH (NYSE: JBGS), and Ryan Yetzer, senior manager of construction & sustainability at Physicians Realty Trust (NYSE: DOC).
Russell Reynolds’ global ESG and sustainability practice launched four years ago in response to the growing demand for ESG talent from financial services clients. “I’ve never seen anything like the current level of demand for talented leadership,” Harrison observed.
Harrison, who authored the whitepaper ESG 2.0, The Next Generation of Leadership, began by discussing how hiring for ESG roles has evolved in recent years. While a ‘head of ESG’ used to typically be an internal appointee charged with figuring out how to build a fundamental framework and speak with credibility to investors, today the role requires ESG domain expertise. Harrison is seeing demand for “business people first” who can speak the language and also have academic credentials in sustainability or impact investing that can allow them to build out an enterprise-wide ESG policy and framework. “There definitely is a supply-demand imbalance at the present time,” he noted.
In Pexton’s experience with hiring entry- or mid-level ESG staff, she’s seen backgrounds range from finance to design or architectural. She’s found it helpful for professionals to be able to understand the stakeholder ‘investor speak’ or what in the ESG space is valuable and material. “The other characteristic that's really important is to be adaptable and nimble because really, I think anyone who works in the ESG space knows that you have to be able to go from 36,000 feet to an inch in a matter of hanging up a Zoom call and picking up the next one.”
Yetzer then shared insights into what it’s like to actually work in an ESG role at a REIT. Rather than there being a typical day, he described the work as more about having typical seasons: reporting and certifications. During reporting season, the focus is on what goes into the 10k from an ESG perspective, developing an ESG report, and disclosures. During certification season, the focus is on developing new initiatives and plans based on what investors have been asking about and what frameworks they want to report to. The most satisfying part of the job, Yetzer said, has been seeing the metrics improve and tracking progress. “I like seeing the numbers go down every year on the environmental side.”
Turning to professional development, panelists agreed that a successful ESG candidate has both the technical skills and the experience and business acumen that allows them to be strategic leaders. Kocak noted that “there's a misunderstanding that if you know all the technical aspects of ESG, you're all set and you will keep growing in your career, but there is a point in your career that you hit where the technical skills will not take you to that next level.” Harrison agreed, adding that—looking beyond credentials—finalist candidates have the ability to influence a wide away of stakeholders.
Finally, panelists shared resources that have helped them along the way in their careers, including:
- Nareit’s Real Estate Sustainability Council
- ULI’s Foundations of Real Estate certificate
- LEED certification programs
- Fundamentals of Sustainability Accounting credentials
- Nareit’s Practical Reference for ESG Implementation (PDF)
Commercial real estate professionals can learn about the latest ESG developments impacting the real estate sector at Nareit’s REITworks Conference. The 2022 conference will be held on Sept. 12-13, and the program will cover key topics relating to ESG reporting and disclosures; DEI and social responsibility; sustainability best practices; strategies for communicating with investors and stakeholders; and much more. Sign up to be notified when registration opens.