ESG and the state of the industry
Reflections on REALPAC's new report
Environmental, Social, and Governance (ESG) criteria took centre stage at the closing plenary of Building Lasting Change 2023 with the release of REALPAC’s first-ever report on the status of ESG in the Canadian Commercial Real Estate Industry. This plenary was titled “ESG and Commercial Real Estate in Canada” and featured Darryle Neate (Vice President of ESG at REALPAC), Ridhima Nayyar (AVP, Sustainability at RIOCan), Ariel Feldman (Senior Director, Sustainability, at Choice Properties REIT), and Julia St. Michael (Director of ESG at CAPREIT).
As 2030 (and by extension 2040 and 2050) climate targets creep ever closer, we must measure what matters and act with urgency. One of the challenges the building sector faces is how to measure ESG criteria, which increasingly play a role in how tenants and investors make business decisions. REALPAC’s ESG Industry Report aims to consolidate understanding of ESG priorities and practices to facilitate benchmarking and strategy development and address emerging trends and opportunities.
From an environmental standpoint, investor needs, corporate carbon commitments and regulatory pressure have increased demand for certifications and standards such as LEED and the Zero Carbon Building standards. These certifications and standards offer the real estate sector a framework for measuring ESG efforts that is concrete, consistent, and verified. Yet, progress on diversity, equity, and inclusion (EDI) must also accelerate to advance ESG commitments.
The ESG plenary panel at BLC 2023 was inspirational while also being brutally honest about how far the commercial real estate sector needs to go to better address EDI in ESG. Barriers to recruitment, career advancement, and mentorship for underrepresented groups must be addressed, and quickly. While the report indicates incremental improvements — 23 percent of Executive Management professionals are women (a 3 percent increase from the previous year) and 16 percent of Executive Management professionals are people of colour (a 2 percent increase from the previous year) – the panelists affirmed that the commercial real estate sector has more work to do.
The report recognizes an emerging awareness of how holistic and integrated approaches are needed for successful ESG strategies. That is the founding intention of the United Nations Sustainable Development Goals (SDGs), with each goal being interconnected and dependent upon other goals. As ESG strategies mature, we will see more of the building sector track, measure, and verify social and governance criteria the way it measures and reports on building performance.
Interested in learning more? Read REALPAC’s 2023 ESG Industry Report for Commercial Real Estate in Canada.