Institute for Real Estate Management (IREM) Survey Results | United States

The Institute for Real Estate Management (IREM) released a report a few months ago outlining the results of a survey of US and Canadian real estate managers’ knowledge of environmental, social and governance (ESG) practices.1 The objective of the survey was to assess the adoption of ESG practices, understand barriers to adoption, and identify gaps in property managers’ knowledge of ESG concepts and practices.

While the overwhelming majority of respondents believe that ESG programs are important for the real estate industry, the report’s findings suggest that a much smaller percentage are aware of these programs and subsequently implement them. While progress in this area has been made every year since the launch of ESG-focused investing, the survey highlights the acute need for ongoing training.

The overall conclusion of the IREM survey suggests that there is a need for managers to be more exposed to ESG initiatives due to their general lack of familiarity with the topic. More than half (61.6%) of respondents indicate that they are at most “fairly familiar” with ESG principles applied to real estate portfolios, which suggests a need for training. Moreover, the lack of formal ESG initiators in companies is biased by size and sector. Formal ESG initiatives are significantly less common in residential portfolios (20.9%) than in mixed-use (30%) or commercial (46.7%) portfolios.

The survey also highlighted the lack of consistent metrics used to measure the success of a company’s ESG progress: 67% of respondents indicated that they use energy, water or waste reductions to measure success of their ESG emissions, but only 27% indicated that they use carbon reduction to measure success. This inconsistency illustrates the possibility of educating property managers on the most important and useful metrics as indicators of success. For example, energy, water, and waste reductions also have carbon reduction outcomes that managers may not be tracking to date.

Of the 19 ESG initiatives listed in the survey, environmental initiatives had the lowest adoption rates compared to governance and social initiatives.

Not surprisingly, the survey notes that the biggest barrier to implementing impactful ESG initiatives is the overall cost and gaining buy-in from investors or owners. This would explain why environmental initiatives are often implemented at a slower pace. While social and governance initiatives can be instituted through corporate policies, environmental initiatives such as benchmarking require action and therefore have an associated cost or ownership buy-in.

At the macro level, the report illustrates why it is no longer enough to simply believe that ESG practices matter. Larry Fink, as CEO of Blackrock, wrote the following in 2018: “To thrive over time, every business must not only deliver financial performance, but also show how it is making a positive contribution to society. 2 The key here? It’s time to show how your business contributes positively to society. The first step to demonstrating progress is understanding where to start and the next steps required to be successful.

For those unsure of how to implement ESG practices or where to start, the Energy and Sustainability Services (ESS) team within Asset Services can help develop these strategies.

To find a team member to discuss initiatives with, visit Cushman & Wakefield’s Energy & Sustainability (ESS) site.

1 – IREM ESG survey. (2022, August). Extract of
2 – Sorkin, A. (2018, January 15). Message from BlackRock: Contribute to society or risk losing our support. Extract of

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