Daniele Horton, founder and CEO of Verdani Partners—a sponsor of Nareit’s ESG JumpStart: 2023 Virtual Class Series— participated in a video interview in conjunction with the event.
Horton explained that her firm’s focus this year will be on climate change in terms of decarbonization, and adaptation and resiliency. She noted that although social issues are still important for the real estate industry, “we’re seeing a big shift and more refocusing back to climate change.” One of the key drivers for that is because countries are not on track to reach the goals of the Paris Agreement, she added.
“The real estate industry really needs to accelerate its decarbonization efforts and we’re going to continue to get a lot more pressure from a regulatory perspective to do so,” Horton said. Given the market’s focus on decarbonization and resiliency, “we’re preparing our clients for more strict regulations,” she added.
Horton also commented on the risks associated with stranded assets. She noted that “the long term success of companies really hinges on their ability to keep up the pace with new regulations.”
Real estate companies that are currently not working to decarbonize and increase their resiliency to climate impacts may find their assets becoming stranded and could face financial risks including asset write-off and devaluation, higher operating expenses , higher costs for investments, and reputation and regulatory risks of non-compliance, Horton said.