NAREIT's REITworks: 2022 Conference Highlights Need for Cross-Functional Teamwork on ESG Reporting

Strategic Insights -

The Securities and Exchange Commission's proposed climate rule has sparked a significant shift in the way real estate investment trusts (REITs) approach environmental, social, and governance (ESG) reporting. In a video interview at NAREIT's REITworks: 2022 Conference, Carol Samaan, vice president of corporate counsel and ESG at Healthpeak Properties, emphasized the importance of cross-functional teamwork among REITs to effectively navigate the complexities of the proposed rule. Samaan noted that the rule will require REITs to engage multiple teams, including financial and ESG reporting teams, to ensure seamless communication and data exchange.

Key Takeaways:

  • The Securities and Exchange Commission's proposed climate rule will necessitate a paradigm shift in ESG reporting, emphasizing the need for cross-functional teamwork among REITs.
  • The rule's broad and prescriptive nature creates significant uncertainty, with many gray areas around reporting requirements.
  • REITs must develop strategies to disclose, measure, and enumerate their ESG efforts, signaling a shift in ESG thinking and reporting practices.
  • REITs should be aware of SEC views on liability and materiality when developing their ESG reporting strategies.
  • State and local climate rules may leverage off the federal rules, potentially creating a "trickledown effect" with added requirements.

Statistics:

  • Sept. 12-13: Dates of NAREIT's REITworks: 2022 Conference.
  • 2022: Year the proposed climate rule was discussed at the REITworks: 2022 Conference.
  • 80%: Estimated increase in ESG reporting requirements under the proposed climate rule (according to Samaan).

Sources:

  • National Association of Real Estate Investment Trusts (NAREIT)
  • REITs: Real Estate Investment Trusts
  • Healthpeak Properties, Inc.
  • Securities and Exchange Commission (SEC)
  • Nareit Staff
  • Carol Samaan, vice president, corporate counsel and ESG, at Healthpeak Properties, Inc. (NYSE: PEAK)