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BOMA NEWS - February 07, 2024

ESG Trends in Commercial Real Estate

BY Jaiden Padda, Kreso Kristic and Mike Parker

The commitment to sustainability in buildings has reached unprecedented levels – the BOMA BEST team analyzed the cutting-edge ESG trends shaping the industry today. Environmental considerations, particularly related to climate change, are at the forefront of these ESG trends. The urgency to address climate-related risks and transition towards a low-carbon economy has led to increased scrutiny of companies’ carbon footprints, renewable energy strategies, and green building certifications. Governments and regulatory bodies are introducing stricter environmental standards and disclosure requirements, propelling organizations further towards sustainable practices. The integration of technology, such as artificial intelligence and data analytics, is aiding companies in developing innovative solutions for environmental challenges. This includes monitoring and optimizing energy consumption, waste reduction, and overall environmental performance.

The following are the top ten trends we found. It’s an interesting time, and there is clearly a commitment to address climate-related risks in commercial real estate.

  1. Carbon Neutrality and Net-Zero Goals: The industry is placing a heightened focus on energy efficiency and carbon capture, with a growing number of properties setting ambitious net-zero carbon emission goals. This involves implementing strategies to reduce energy consumption and utilize renewable energy sources.
  2. Green Building Certifications: Companies are pursuing sustainable building certifications, such as BOMA BEST, to assist them in building effective strategies and then demonstrate their commitment to environmentally responsible practices in building operations.
  3. Climate Mitigation and Resilience Planning: Proactively evaluating and mitigating climate-related risks by developing strategies to manage the consequences of extreme weather events and long-term climate changes on commercial properties.
  4. Biodiversity Conservation: Initiatives to support biodiversity, such as partnering with beekeeping companies to install beehives, are gaining traction to ensure responsible land use practices and conservation efforts to maintain ecological balance.
  5. Data Transparency and Reporting: There is an increasing emphasis on transparent communication and reporting of ESG initiatives and performance to stakeholders, demonstrating a commitment to accountability and continuous improvement.
  6. Responsible Supply Chain Management: Firms are focusing on ethical supply chain management, including the adoption of supplier codes of conduct, to ensure responsible and sustainable business practices throughout their operations.
  7. Occupant Health and Well-being: Companies are prioritizing tenant relationships by conducting tenant satisfaction surveys to understand and improve tenant experiences. There is a stronger consideration of incorporating features that enhance indoor air quality, access to natural light, and wellness amenities to create healthier and more productive workspaces.
  8. Sustainable Transportation and Accessibility:  Integrating eco-friendly transit options and ensuring proximity to public transportation, bike-sharing facilities, and electric vehicle charging stations.
  9. Circular Economy Practices: The adoption of circular economy principles is gaining traction in commercial real estate. This involves minimizing waste, promoting recycling, and ensuring that resources are used efficiently throughout the life cycle of a property.
  10. Community Engagement: Building owners and managers are engaging with local communities and incorporating initiatives that positively contribute to societal well-being, job creation, and homelessness.

There is a discernable shift in how management firms are addressing ESG and looking to leverage building certification programs to further refine their efforts.

To find out more about BOMA BEST, please contact: info@bomabest.org