With all of the other troubles currently affecting commercial real estate, should ESG still be a priority?

https://www.afire.org/podcast/202405cast/

Compliance with established environmental, social, and governance (ESG) became a critical measure of real estate performance over the past decade. But with the current slate of challenges faced by CRE—everything from high costs to building and infrastructure obsolescence—some investors are feeling inclined to put ESG lower on the punch list.

...but that would be a mistake, argues Patrick Richard, CEO of Stoneweg US, the US-based subsidiary of the Swiss real estate firm.

In fact, in this new episode of the AFIRE Podcast, in conversation with AFIRE CEO Gunnar Branson, Richard builds a compelling case that investors should prioritize ESG investments as a way to generate higher returns on investment—especially now.

“One thing that sustainability does is protect the value of your assets,” explains Richard, who sees ESG prioritization as a way to decrease risk and increase revenue—critical differentiators in the current real estate market. Richard explains how investing in climate resilience can decrease insurance premiums and lender interest rates, currently significant cost centers affecting pro formas. By investing with an ESG mindset, despite some current external financial or philosophical pressures, Richard says: “Not only are you protecting your assets, but you’re creating value at the same time."