Walking the Walk with Governance
This blog is the third installment of a three-part series designed to introduce real estate companies to the process for integrating environmental social and governance (ESG) impact into their investment strategy and organizational framework.
Governance plays a critical role in a successful ESG framework. While the environmental and social areas covered in the first two installments of this series focus more on what a business is doing to make impactful investments, the governance component looks at how a business is operating and whether or not it is building a culture of inclusion, diversity and corporate responsibility.
While large and public companies may have different compliance and reporting thresholds than smaller, private organizations, the basic premise of good governance remains the same: your organization should be embracing the values you express externally in internal operations. Here’s how to make sure you’re walking the walk with governance.
1. Do you practice what you preach?
If you are committed to creating environmental and social impact through your business investments, then the same standards must be applied to how your business operates. Do you hold your office space to the same environmental standards as the properties you own and operate? Are your employees being paid a living wage with adequate health benefits? Do you provide your workforce with the flexibility and support to address emergency child and elder care issues as they arise? Are you investing in your workforce with the same vigor that you invest in your properties? For most impact focused companies, the answers to these questions are yes; however, they are important questions to consider on a regular basis as your business continues to evolve and grow.
2. Are you committed to a diverse and inclusive workforce?
Commercial Property Executive highlighted the significant work that remains in building a more diverse and inclusive commercial real estate sector, citing a study from Bella Research Group and the Knight Foundation. To be a leader, we have to hold ourselves to a higher standard and examine what we’re doing to proactively build a more diverse and inclusive team. These efforts must also extend throughout the entire business, from managed properties up to the executive suite and board of directors. If you’re looking to deepen your understanding of how to facilitate a more inclusive workplace and hire a diverse workforce, Management Leadership for Tomorrow and Future Housing Leaders have some great resources.
3. Are your beliefs backed by good governance policies and procedures?
Have you adopted policies and procedures to protect against fraud and abuse? Are your employees empowered with policies like whistleblower protections? Compliance and reporting may not be the most exciting component of an impact framework, but they are extremely important. This is especially true for owners with properties that rely on partnerships with the public sector and, as a result, may have additional layers of reporting and oversight.
The bottom line
You can’t deliver impact through your investments if you don’t also create and maintain a culture of impact within your own business. Governance is the backbone of a successful impact framework; it offers proof that what is being said is actually being done. It also lays the groundwork for a culture that will allow your organization to grow and thrive in the future.