2021 ESG Sentiment Survey | RE Tech Advisors

By Deb Cloutier & Jack Davis

2021 was a breakthrough year for ESG in commercial real estate. I think we all felt that something dramatic was happening, and the pace of interest, activity, and innovation continues to accelerate. The results of our fourth annual ESG Sentiment Survey confirm this, and illustrate how as an industry we are both maturing as a key part of real estate investing, yet still struggling with many of the same challenges.

How respondents’ investors and/or clients feel about ESG

As always, our goal with this effort is to take a barometer reading of leaders in sustainability in commercial real estate, and understand what issues, trends, hopes, and frustrations are influencing their work. We’re fortunate to be able to track year-over-year changes, and identify emerging ESG trends and focus areas. The following pages summarize the results, painting a broader picture of the market growth and emerging priorities that we each tackle daily. We sent this survey to a select group of over 300 real estate professionals and received 44 responses.

Not surprisingly, decarbonization and net zero were the dominate theme of this year’s survey, with diversity and inclusion, regulatory issues, and climate risk management also capturing the attention of our respondents. Data challenges and lack of ESG standards (or perhaps too many ESG standards) continue to frustrate progress, and new topics are emerging such as building electrification, battery storage, and carbon capture/storage, to name a few. Interestingly, health and wellness has perhaps receded slightly in terms of market attention, and concerns about greenwashing have crept into the dialogue.

But perhaps the most notable trend we saw in the data could be characterized as the “institutionalization of ESG.” As noted through several questions, ESG has solidified its place as a core part of real estate investment management. 90% of respondents note higher program budgets for 2022. 93% of respondents believe that their investors see ESG as critical and important to achieving investment objectives. Internal organizational support for ESG has never been higher, and respondents continue to believe that their work in ESG has a positive impact on their career trajectory. ESG has arrived, and is widely viewed as a driver of value and competitive distinction.

Please review the results that follow, and share with us your observations, takeaways, and thoughts. For those of you who participated in this year’s survey, we thank you for your input and appreciate your insights. We look forward to collaborating with each of you in the year ahead.

The Authors