The conversation around sustainability has now gone beyond the environmental component. The ‘s’ – social – in ESG is now firmly part of the equation in the world of private real estate investing. This is the overriding message that comes out of this year’s PERE Sustainable Investing report.
There is a rapidly growing realization among investors and managers that responsible investing involves the physical assets they own and manage not only meeting a list of green criteria, but having a meaningful impact on society – a more holistic, “human-centric” approach to sustainability. But there is a growing acknowledgement that by capitalizing real estate that people want to live, work and play in, leases are more likely to get renewed, tenancy lengths to increase and rental income to grow. Engaging effectively with tenants and the wider community is likely to be making a difference to the bottom line.