Strategist Sees Broad Range in Public Sustainability Reporting

Lenora Suki, head of sustainable finance product strategy at Bloomberg LP, joined REIT.com for a video interview at NAREIT’s 2016 Leader in the Light Working Forum at the Ritz Carlton – Coconut Grove in Miami.

Suki described the current state of public sustainability reporting.

According to Suki, a broad range of disclosure practices exists across different industries. At the far end is robust disclosure, from companies that are framing sustainability as part of how they create business value, she said.  Such companies are reporting on quantitative metrics for environmental, social and governance issues and integrating the information into their annual reports and regulatory filings.

However, the vast majority of companies are trying to figure out how they should be thinking about public sustainability reporting, Suki said.

Suki said she expects to see sustainability reporting evolving quickly, in part due to pressure from regulators, asset owners, and new stock exchange listing requirements.

Suki also sees a broad range of reporting standards within the REIT sector.  She pointed out that only about 44 percent of REITs in the FTSE EPRA/NAREIT Global Real Estate Index Series are reporting on their policies or governance.

Sustainability reporting in the United States lags Europe and Asia, Suki observed. Europe and Asia, she said, are reporting more quantitative indicators that include energy, emissions, water, and even some social indicators.

And while public reporting in the U.S. still has a ways to go, Suki said a lot of reporting is being made to private platforms, such as the Global Real Estate Sustainability Benchmark (GRESB). “There’s actually quite a lot of effort going into reporting that’s not making it into public reporting,” she said.

Meanwhile, Suki commented on Bloomberg’s collaboration with the Sustainability Accounting Standards Board (SASB).

Suki explained that SASB was formed to advance comparable, cost-effective metrics for companies to report on the 10-K form required by the Securities and Exchange Commission.  She said Bloomberg hopes to use the data provided to SASB and integrate it into the Bloomberg toolkit.

Suki also touched on the impact of transparency on green bond issuance.

“It’s an early market and green bond issuers are trying to understand exactly what they need to report. Some of them are confused by what market participants are asking for,” Suki said. She emphasized that investors really want to see more information about how green bond funds will be deployed.