ESG: The Future of Commercial Real Estate

As we wrap up gifts and 2021, we close the year with a topic of increasing importance - in commercial real estate, and beyond.

Adding another acronym to the CRE mix, let’s dive into ESG. In case you’re unfamiliar, that’s environmental, social, and governance. Socially conscious investors utilize ESG standards to screen possible investments, applying the criteria to a company’s operations.

As Investopedia notes, “Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.”

How does this affect commercial real estate, and why should CRE investors and subject matter experts keep an eye on all things ESG? As Forbes reported earlier this year, ESG investments have climbed, steadily, since the onset of the COVID-19 pandemic. It’s cool to be kind and, in the development and CRE world, this applies in terms of being socially conscious.

“The industry is on the precipice of a digital transformation as the convergence of ESG, new administration, occupant needs, and market demands presents an ideal opportunity for CRE to prioritize the ‘E’ in ESG as an integral driver of economic recovery and long-term portfolio value,” says Forbes Council Member and President and Cofounder of Carbon Lighthouse, Brenden Millstein.

With all this in mind, CRE that prioritizes ESG efforts proves more valuable for society, as a whole, and financially. In the realm of commercial real estate and PropTech, ESG criteria cannot be ignored or dismissed. Digitization and technology that optimize environmental, societal, and governance standards are the future. CRE investors, owners, property managers, and even tenants would be wise to do more than simply keep ESG on their radars. They must evaluate options, develop their operations, act, and invest with ESG at the forefront. It continues to become evident that paying it forward to society will legitimately pay it forward in terms of profit. 

“ESG is not just a buzzword, but rather part of the new standard for how asset owners are being evaluated by competitions and investors,” says Dottid Founder and CEO, Kyle Waldrep. “Dottid understands the importance of ESG metrics and we look forward to serving our customers with actionable insights.” 

ESG continues to inch toward the spotlight—and it has done so in a very organic way, especially given the economic and social effects of the COVID-19 pandemic. In 2022, we will explore ways that YOU can keep ESG top of mind on a large scale, and in terms of one’s daily agenda. For now, we’re doing our part to inform our readers about the ESG world that cannot be minimized or ignored. As we improve the Dottid platform on a monthly basis, we are constantly analyzing data and industry breakthroughs to make ESG a significant variable in our platform.

2022 holds incredible potential for upholding and advancing ESG efforts. Regardless of your role in the CRE arena, ESG will affect you and is worthy of your attention.