It’s clear that many renters expect property owners and managers to upgrade their ESG credentials – but why have property managers often viewed ESG with skepticism?
Some property owners managers can often be wary of the cost of implementing ESG initiatives compared to larger institutional property owners. A survey found that 83% of building owners expect an increase in renters’ demand for sustainable and environmental-friendly buildings as a result of COVID-19. In the coming years, it will benefit all property owners and managers to offer amenities that meet renter needs.
ESG policies discourage businesses from relying solely on financial metrics and encourage broader social and environmental metrics in their decision-making. Buildings with high ESG scores, on average, experienced lower costs of capital compared to buildings with poor ESG scores in both developed and emerging markets during a four-year study period.
ESG investing has been around for decades and continues to grow. ESG-related strategies have shown consistent inflows and asset growth over the past decade. Take a look at the figure below.
Source: Bloomberg Intelligence
In a recent report, Bain & Company argues that ESG should be a core part of what differentiates companies from competitors. On the regulatory front, ESG is no longer a ‘nice-to-have.’ More than 35 stock exchanges around the world have already issued (or are in the process of issuing) ESG reporting guidelines.
At TheGuarantors, we create fair financial products that help both renters and landlords thrive. Reach out to us to learn about lease guarantee and security deposit replacement, which increase affordability and accessibility for renters to homes they would not otherwise qualify for with traditional application requirements. Simultaneously, these products give property owners and managers an added layer of protection against potential default and damages, stabilizing the bottom line, decreasing bad debt, and increasing NOI no matter the economic environment.