ESG and Real Estate

After observing the enormous and rapidly growing pressure on humanity to slow the pace of climate change over recent years, I decided to explore the intersection of sustainable investing and the commercial real estate industry in this research project. I’m interested in real estate as a career after graduation and found that real estate is one of the most impactful sectors when it comes to global warming. Buildings are responsible for more than 40% of greenhouse gas emissions globally. In creating a more environmentally-friendly world over the coming decades, everybody involved in the real estate industry will need to play an active role in designing and executing this vision. The massive influx of capital to investments weighing environmental, social, and governance considerations has created an exciting, yet still relatively unknown, atmosphere for the world of commercial real estate. In exploring this subject, I first wanted to examine how real estate and ESG investing principles are currently interacting. What is working? What is not? Does working mean financial performance or environmental performance? Maybe a balance of the two? What is slowing progress down? Where does the future seem to be headed? I’m going to break down the issues, answer these questions, and think through solutions - i.e., the best paths forward for regulators, developers, owners, operators, and anybody else involved in the crossover between real estate and a greener future.