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Survey Shows CRE Prioritizing ESG and Technology

A recent report issued by consulting firm Wipfli LLP outlined the impact of issues such as ESG and technology on real estate investments and projects.

The company’s “Real Estate Industry Outlook 2022 Research Report” pointed out that 77% of industry respondents surveyed indicated that ESG is impacting both investor pools and real estate projects.

Some respondents said that ESG has led to a decrease in their investor pools and is making it more difficult to bring in new investors. Others, however, pointed out that ESG initiatives and mandates are increasing their projects. Still others said that their ESG focus is helping them attract and retain employees, adding that ESG is an important aspect when it comes to acquisitions, lease renewals and investor relations.

“It’s hard now to find any kind of fund that doesn’t consider climate risks in some way,” one survey respondent commented. “Investor portfolios with ESG perform better than those without,” said another.

Along those lines, 35% of those surveyed said they’re making environmental and green energy changes, while 33% said they’re incorporating ESG in business practices and investments. Only 7% noted that they’re focused on gender equality and workforce diversity.

Wipfli’s numbers also showed that investors are directing larger sums of money into companies that have strong ESG programs. While specific ESG measures are still undergoing change, once the metrics are finalized, “ESG will be vital for building a robust portfolio that attracts investment,” the report said.

On the technology side, 85% of respondents said they understood the importance of digital transformation in areas of decreasing costs, platform standardization and data analytics. Some firms believe they don’t need technology outside of Excel and QuickBooks, but others are starting to understand the importance of digital transformation to remain competitive. Breaking the information down, 64% of respondents said they use technology for property management purposes, 55% rely on it for CRM and marketing automation, while 40% use technology to fuel investor management portals.

While technology seems to help “organizations make decisions faster, close deals faster and improve the structure of those deals,” similar to ESG, “technology is a need-to-have investment going forward to continue growing and competing,” the report said.

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