Hidden Benefits of Working with an ESG-Minded CRE Organization
Environmental, social, and governance (ESG) programs do more for a company than meets the eye. This emerging framework, which reimagines how corporations interact with the world around them, can boost profitability and valuation. But did you know ESG programs also provide lesser-known benefits that are equally valuable to investors and other stakeholders?
How ESG Programs Deliver Added Value
ESG programs empower corporations to take ownership of the sustainability of their operations, creating a more positive impact on the communities they serve. In place in about 90% of the world’s largest companies, ESG is a path to better corporate citizenship that can result in rising stock prices and other tangible, short- and long-term benefits.
Sustainability initiatives, such as in-office recycling, have a real impact on an organization’s carbon footprint and its bottom line. When these are coupled with other ESG initiatives, like water consumption reduction, recurring expenses fall, freeing up funds to serve clients and partners better.
ESG is no longer an afterthought for publicly traded companies. It has become a core component of corporate reputation. It is now part of the foundation on which trust is built with financial partners. More than 90% of CEOs and business leaders believe ESG issues will impact reputation over the course of the next year. Through a proactive approach to ESG, many companies have gained more tangible benefits of enhanced public image, including more customers, higher-quality employees, and greater profitability.
Gone are the days when ESG risk lived in its own silo. It is a core component of a company’s overall risk management strategy. New approaches to risk management that include ESG have proven effective at reducing sustainability-related incidents or controversies. Organizations that act as good corporate citizens are less likely to face incidents or controversies that could disrupt financial performance.
ESG is quickly rising on the list of investors’ priorities, provided it does not hamper financial performance. When weighing options, some investors prefer companies that are not only part of the ESG discussion but proactively address it. In recent years, ESG reporting, which aims to show how ESG impacts financial performance, has been increasingly included in corporate earnings reports and disclosure statements.
Clients want to feel good about the businesses they support and the impact those businesses are making on their community and the communities of others. As a result, ESG is high on the list of clients’ priorities today. First-time clients often become financial partners when they feel a connection to an organization, such as a shared community purpose.
Innovation and Growth
Launching a corporate ESG program is a transformative experience. As organizations explore new options, they identify unmet needs, find new use cases, learn ways to incorporate emerging technologies into traditional business practices, and improve collaboration with community stakeholders. The result is a win-win for everyone involved.
A Value-Added, Forward-Thinking Strategy
At Arbor, we follow an ESG framework because we believe in its value for our community and our financial partners. Even before ESG became an industry buzzword, Arbor was a socially responsible company. We have a long-standing tradition of making a donation for the planting of a tree in honor of each deal we close. For more than two decades, our business model has focused on affordable housing lending, a key component of improving Americans’ quality of life and strengthening their communities.
Click here to read more about ESG at Arbor.
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