Stakeholders, lawmakers, shareholders, regulators, and activists in companies of all sizes, are turning up the pressure, and this approach is growing in all sectors. Particularly, listed companies have a strong mandate and are focusing on methods to report the performance of ESG metrics.
For real estate investment trusts, the investor base is critical to their ability to successfully raise debt or capital. REITs are facing an increasing awareness of climate change and ESG investing issues by investors, which might change the criteria in selecting stocks. Furthermore, financial institutions seem to be reluctant to lend to non-ESG-compliant companies or, alternatively, they consider applying higher interest in these cases, to push them to comply with the new ESG standards.
But not only investors have concerns about ESG requirements. Tenants have subscribed to ESG standards and practice them strictly and will seek to rent offices that have very high “green” compliance. If REITs want to retain or attract new tenants and keep their revenue intact and growing, they really need to fulfil these requirements and put ESG at the heart of their business.
In addition, the European legislator has followed the planned schedule, although with delays, but at an unprecedented pace in the EU. Among all the regulations that the European Commission has published in recent months, a common link can be seen: the use of capital markets to drive the transformation of companies. This can be seen in initiatives from the NextGen EU to the Sustainable Finance Regulation Disclosure.
However, the fact is that for many companies, the push from the regulator is not even necessary. Sustainable development has become a responsibility, an opportunity and a source of competitive advantages.
On the 28th of March, the IV Iberian REIT & Listed Conference will gather a panel of real estate experts that will provide valuable insights on all these matters, specifically addressing how green real estate is, whether green investments are top performers or not, and ultimately discussing how those questions affect REITs.
Join Iberian Property & EPRA in a unique event, impossible to miss!
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