Real estate investment trusts have been improving their public reports of environmental, social and governance, or ESG, efforts and outcomes in recent years.
According to new insights from global index provider FTSE Russell and the National Association of Real Estate Investments Trusts, the percentage of REITs that publicly report ESG criteria have steadily risen.
“In 2019, 84 of the 100 largest equity REITs, representing 89% of equity market cap, publicly reported on ESG efforts and outcomes. This is a very impressive number and clearly indicates a progression in this area within the REIT community. ESG factors are clearly becoming a much more important factor in determining success in the real estate market,” John D. Worth, executive vice president, research & investor outreach, Nareit, said in a note.
During a recent presentation, “Growth of Real Estate in a Technology-driven, New Economy”, at the CAiP 2020 Real Estate & Infrastructure Virtual Forum, FTSE Russell and Nareit revealed that REITs are increasingly reporting on carbon emissions, waste management, energy, and water usage. REITs are also adding resources dedicated to sustainability, board diversity, and community development programs.
“As ESG measurement reach and standards continue to improve globally and begin to permeate important industries such as real estate, it helps global market data and index providers such as FTSE Russell continue to improve the measures we provide to investors,” Catherine Yoshimoto, director, product management, FTSE Russell, said in a note.
As ESG investments gain in popularity, there is an increased demand for accurate reporting on ESG-related criteria and standards. The improved ESG reporting may help investors better gauge opportunities and expand exposure to markets that are properly reporting their ESG efforts and outcomes.
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