Arbor’s Leah Fisher Joins Global Sustainability Panel at InnovateESG

Arbor Senior Vice President, Special Projects, Governance and Risk, Leah Fisher recently spoke on a panel discussion at InnovateESG 2023, a conference focused on environmental, social, and governance missions, hosted by NYU Stern’s Chen Institute for Global Real Estate Finance. Fisher joined Bill Ferguson, Chairman, Ferguson Partners and Executive-in-Residence, Chen Institute, Gunnar Branson, CEO, AFIRE, Sairah Burki, Managing Director, Regulatory Affairs & Sustainability, CREFC and Dana Roffman, Independent Director and Advisor to public and private companies for a thought-provoking conversation about benchmarking U.S. and global commitments to governance and sustainability.

Regulations and Incentives Needed to Inspire Change

Fisher drove home the theme of the day, Environmental, Social, and Governance (ESG) financing, telling attendees that more targeted and specific sustainability regulations are needed for financial institutions to make more green financing commitments.

“I think you’re going to have a lot in the industry that are going to look for a loophole so that they can stay accountable in their minds and accountable to shareholders until they have someone very specifically saying, ‘This is what we expect from you on every level in terms of your counterparties, your investors, your partners and your commitment in terms of your office space and what that looks like,’” said Fisher.

Fisher added that more incentives are also needed to inspire the industry to apply ESG principles to everyday business practices. “I think that we’ll need to get a lot [closer with incentives] before you have folks that are willing to make the commitment because, at the end of the day, the question becomes ‘is it worth it?’”

Cultivating Borrower Interest in ESG

Conversations about ESG and new construction are not enough, according to Fisher. It’s equally important to encourage borrowers to become interested in sustainably retrofitting properties.

“How do you approach these folks to introduce these concepts without saying this is a requirement?” said Fisher. “If [lenders] can’t say we’ll give you more optimal pricing, or here’s a program that is more favorable for you if you make a commitment to sustainability on some level with your property, that’s where the divide is. It’s about finding the line between pushing and cultivating with our borrowers.”

Shareholders Want Transparency

The investment community generally understands that sustainability is a long game, Fisher has found, but shareholders are typically looking for faster returns.

“It’s figuring out how we can raise our voices in the lending community to say, ‘We want to do this,’” said Fisher. “Organizations are saying ‘we recognize the importance, but we also have to bridge the gap between what you’re asking us to do and what’s realistic based on the fact that we have shareholders we’re accountable to and we have borrowers all over this country who may not understand this priority.’”

The Tenant is the Boss

Tenants are taking a more active role in pushing landlords to make their buildings more environmentally friendly. Tenants also want to use the sustainable buildings they lease to demonstrate progress towards commitments they’ve made in their companies, said Gunnar Branson.

“The tenant, and more specifically the tenant’s employees, are changing the rules on us,” said Branson. “Part of what the employees are insisting upon is working in a building that doesn’t kill them. They’re insisting upon transparency. Investors are also insisting on transparency.”

Educating Borrowers on a Greener Future

At InnovateESG 2023, Fisher and the other panelists gave attendees an honest and inspirational look at how the real estate industry can come together to meet the challenges and opportunities in making building infrastructure more sustainable for future generations.

Watch the video to hear Fisher’s full comments.

Interested in the multifamily real estate investment market? Contact Arbor today to learn about our array of multifamily and single-family rental financing options and view our other market research and multifamily posts in our research section.