2022 Summer Issue - 25

ULI MEETING HIGHLIGHTS 2022
Christine Robinson, Ben Myers, Carol Samaan, Jack Davis
The Rising Tide of ESG Goals for Real Estate
Companies
In March, the U.S. Securities and Exchange
Commission (SEC) proposed rules to enhance
and standardize climate-related disclosures
that public companies make to investors,
including climate-related risks and greenhouse
gas emissions. At the " Real Estate
Companies: The Front Line of Climate Change "
session at the Spring Meeting, moderator
Christine Robinson, partner, sustainability and
ESG services, for Deloitte & Touche, asked
experts about the challenges and successes
in mainstreaming environmental, social, and
governance (ESG) accounting and reporting.
With the proposed rules potentially passing
as early as the end of this year, finding experts
to help meet the new regulations will be a
scramble, said Ben Myers, vice president of
sustainability for Boston Properties (BXP). " It's
definitely a challenge because the nuances
of what goes into the financial statement and
how that is calculated are still very uncertain, "
he said. " It introduces a whole new level of
controls, process, formality, time, burden, and
requirements for the sustainability team. "
" It is so broad, what the SEC is proposing, "
said Carol Samaan, vice president, corporate
counsel and ESG, for Healthpeak Properties Inc.
" The timing of it is very hard. We file our Form
10-K about two and a half months after the end
of our fiscal year. It is really hard to get all of
that utility data rolled up, verified, audited by
internal audit, assured by our external assurer,
reviewed by the financial accounting team, and
reviewed by the board by February 15. If you are
working with a company that might have this
obligation, start having conversations tomorrow,
form a task force, even if these rules get
delayed because of lack of legal challenges. "
" This is going to waterfall throughout the
market, " said Jack Davis, director of RE Tech
Advisors. " Your tenants who are corporations
are going to be reporting this data, and they're
going to be going to their landlords on every
single site and saying, 'I need your data, and
I need your help quantifying this information.'
Same with institutional investors on the private
side. They're going to see what's happening
on the public side, what the REITs [real estate
From left: moderator Christine Robinson, partner, sustainability and ESG
services, Deloitte; Ben Myers, vice president of sustainability, Boston
Properties (BXP); Carol Samaan, vice president, corporate counsel
and ESG, Healthpeak Properties Inc.; and Jack Davis, director, RE Tech
Advisors, examine the latest measures required by real estate companies
to fight climate change.
investment trusts] are doing, and they're going
to start asking the same questions about their
development partners. "
Both Myers and Samaan reported success
with green financing. " We've issued four
green bonds, $3.5 billion overall in green bond
financing, " Myers said. " At the beginning, the
additional restrictions and reporting requirement
costs were the concern. But it attracted a
much larger pool of investors, and with more
demand, we got a better, lower rate . . . about a
five-to-10-basis-point advantage. "
" We issued our first two green bonds last
year, " Samaan said. " We're allocating the net
proceeds to green buildings targeting LEED
[Leadership in Energy and Environmental
Design] Gold or higher. What was really helpful
about the green bonds is that they put focus
on certifications. LEED went from being 'nice
to have' to 'we have a target now that all new
development will be LEED Gold or higher.'
Green bonds gave us leverage to target that. "
Ramping up ESG in the built environment is
a complex endeavor. " However, it's also worth
remembering the risk of not doing it, " Davis
said. " That actually drives a lot more decisionmaking,
in some instances, than the ROI [return
on investment] of incorporating sustainability.
If you're going to not attract capital and not
attract that tenant, or not even get in the tenant's
short list of buildings they will lease in
because you didn't do something, that's
the risk. "
RON NYREN is a freelance architecture, urban planning, and real
estate writer based in the San Francisco Bay area.
SUMMER 2022
URBAN LAND
25
2022 Summer Issue

Table of Contents for the Digital Edition of 2022 Summer Issue
