Designing, building, and operating a portfolio of commercial properties is, to say the obvious, complex and expensive, with long planning horizons, and even longer return on investment. Therefore investing in companies involved in these property ventures requires exhaustive planning and consideration. Every aspect of a building needs to be assessed through architecture, engineering, and financial lenses. Put possibly as important, is assessing an investment through environmental, sustainability, and social aspects.
Structure has been developed for assessment of these factors through Environmental, Social, and Governance (ESG) standards, which document a set of criteria for how a company should be assessed by a conscientious investor, with regard to:
ESG criteria are increasingly informing the investment choices of large institutional investors such as public pension funds. According to the a recent report from US SIF Foundation, investors held $17.1 trillion in assets chosen according to ESG criteria at the end of 2019, up from $12 trillion just two years earlier. This represents an increase of ESG criteria based investing of 42% in 2 years, and 33% of all US assets under professional management.