ESG and Sustainability in Real Estate Finance: Asset Management, Legal and Regulatory Uncertainty, Risk Mitigation

Description

The commercial real estate industry is currently navigating a new legal and regulatory landscape relating to ESG and sustainability punctuated by shifts in regulatory and deregulatory policy changes on the state, federal, and international levels. These changes have created uncertainty in the real estate finance industry, leaving investors and developers examining the relevance of ESG and sustainability initiatives and wondering whether and to what extent they should continue to pursue these initiatives going forward.

ESG and sustainability factors can provide important metrics beyond traditional financial criteria to evaluate how properties and portfolios are performing, providing a strong business case for continuing to pursue these initiatives.

Pursuing ESG and sustainability initiatives can enhance an asset's bottom line. Building sustainability measures such as energy efficiency is appealing to tenants because it demonstrates that the landlord is engaging in cost savings measures that will likely be passed onto tenants. Investors are also demanding and prioritizing sustainability because they recognize that green properties are better positioned for long-term growth and risk mitigation, leading to higher returns and reduced volatility.

The Trump administration intends to rollback most ESG and sustainability-related federal laws, but there are regulatory developments on the state and international levels that make compliance strategies in this area complex. Counsel must understand the growing patchwork of laws and regulations to effectively advise their clients in this area.

Listen as our authoritative panel discusses ESG and sustainability considerations in real estate finance and investment and provides suggestions for investment funds and asset managers navigating the uncertain legal and regulatory landscape.