ESG for Multifamily Management
Learn about ESG for residential management and how impact investing contributes to building sustainable communities.
Transformation starts with good business decisions. And, in the wake of the pandemic, property operators are the ones who will be responsible for implementing major changes to policies, practices and projects that improve efficiency and resilience for their assets as well as their communities who live, work and thrive within.
Today’s renters understand the impact and importance of sustainability initiatives and, of residents polled in the 2020 NMHC Kingsley Renter’s Preference Survey, 73% said they are interested in, or won’t rent an apartment without, sustainability/green initiatives at the property. This is up from 65% in 2017. Here you’ll learn about ESG for residential management and how impact investing contributes to building sustainable communities.
What is ESG and why do I need it?
ESG stands for Environmental, Social and Governance, and practices associated with these areas have been taking center stage due to the rise of wealth and persistence of social inequities, as well as environmental stressors that cause threats to a healthy society. Any sound due diligence program involves management practices that benefit the triple bottom line: people, planet and profit. In other words, financial and social returns should intentionally work together to improve social and environmental conditions.
Bloomberg states that of the $140 Trillion worth of global assets under professional management, ESG impact investing could climb to more than ⅓ of the global total by 2025. ESG practices are aligned with superior organizational performance, diminished financial risk and higher financial returns, which is why it makes good business sense to engage in activities that support these initiatives. Some additional benefits to property owners and operators include lowering energy use, cutting carbon emissions, and boosting health and wellness among tenant populations.
Where do I start with improving ESG performance?
With a seemingly endless list of options for benchmarking and certifying properties with a letter grade, including LEED, WELL, BREEAM and LBC to name a few; it’s difficult to navigate which decisions will make the most business sense and the greatest impact for residents and their communities at large.
When it comes to property operations, automation and data collection are essential. Industrial IoT technology can be especially useful in apartment leasing and management. For example, what began as a pandemic-driven prioritization of air quality is now becoming an essential amenity for apartment seekers. And with the increasing emergence of proptech solutions, companies like AirRated are sought after to measure data and assign an air quality score. This data-driven approach to improving ESG performance can ease the minds of prospective and current residents as well as promote transparency among property stakeholders in due diligence planning and communications.
By continuing to grow Alfred’s tech-powered strategies for building sustainable communities, including Alfred’s waste reduction program, we’re able to explore innovative solutions to residential management while doing our part to fight the climate crisis as the world strives to become more sustainable and equitable.