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The Institute for Real Estate Management (IREM) Survey Results

Sean Starkey • 10/20/2022
The Institute for Real Estate Management (IREM) released a report outlining survey results of United States and Canadian Property Manager’s knowledge of Environmental Social and Governance (ESG) practices a few months ago.1 The purpose of the survey was to assess adoption of ESG practices, understand barriers to adoption and identify gaps in real estate managers’ knowledge of ESG concepts and practices.  

While the overwhelming majority of those surveyed believe that ESG programs are important to the real estate industry, the report’s findings suggest a much smaller percentage know about and subsequently implement these programs. While progress in this field has been made each year since the inception of ESG-focused investing, the survey underscores the acute need for further education and training. 

The over-arching conclusion from IREM’s survey suggests that there is a need for managers to have deeper exposure to ESG initiatives due to their overall lack of familiarity with the topic. More than half (61.6%) of respondents indicate being at most “somewhat familiar” with ESG principles as applied to real estate portfolios, which suggests a need for training. In addition, the lack of formal ESG initiates in companies is skewed by size and sector. Formal ESG initiatives are significantly less common in residential portfolios (20.9%) than in mixed use (30%) or commercial (46.7%) portfolios.  

The survey also pointed out a lack of consistent metrics used to measure the success of a company’s ESG progress—67% of responders indicated they use energy, water or waste reductions to measure the success of their ESG emissions, but only 27% indicated they use  carbon reduction to measure success. This inconsistency illustrates the opportunity to educate property managers on which metrics are more important and useful as indicators of success. For example, energy, water and waste reductions also have carbon reduction outputs that managers may not be tracking to date. 

Across the 19 ESG initiatives listed in the survey, environmental initiatives had the lowest adoption rates in comparison to governance and social initiatives. 

Not surprisingly, the survey notes that the largest barrier to implementing impactful ESG initiatives is the overall cost and getting buy-in from investors or owners. This would explain why environmental initiatives are often implemented at a lower rate. Whereas social and governance initiatives can be instituted via company policies, environmental initiatives like benchmarking require action, and thus have an associated cost or buy-in from ownership.  

At the macro level, the report illustrates why ot is no longer sufficient to simply believe that ESG practices are important. Larry Fink, as CEO of Blackrock, wrote the following in 2018: “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” 2 The key here? It’s time to show how your business is positively contributing to society. The first step to demonstrating progress is to understanding where to start and the subsequent required steps to achieve success.  

For those not familiar with how to implement ESG practices or where to start, the Energy and Sustainability Services Team (ESS) within Asset Services can help to develop these strategies.  

To find a team member to discuss the initiatives with visit Cushman & Wakefield’s Energy & Sustainability (ESS).

1 - IREM ESG Survey. (2022, August). Retrieved from https://www.irem.org/file%20library/globalnavigation/certifications/forproperties/csp/irem-esg-survey-22-fnl.pdf 
2 - Sorkin, A. (2018, January 15). BlackRock’s Message: Contribute to Society, or Risk Losing Our Support. Retrieved from https://www.nytimes.com/2018/01/15/business/dealbook/blackrock-laurence-fink-letter.html 
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