What is ESG and Why is it Important For Real Estate Developers?
2022 Sep 6 | by Apple Barretto
Traditionally, the real estate industry was profit-driven, with little value given to its sustainability. In recent years, however, recent global challenges have pushed homeowners and investors alike to give more thought to ESG and sustainability concerns. But what is ESG, and why should it matter to real estate developers?
In this article, we explore how real estate plays a significant role in a communities’ sustainability, and what developers should do to implement ESG in their operations.
What is ESG?
ESG is an acronym for Environmental, Social, and (Corporate) Governance. These are three areas of interest for a new breed of socially aware and responsible homebuyers and stakeholders. They consider it essential that organizations everywhere incorporate sustainable, ethical practices into how they do business, rather than just chasing the bottom line.
It’s not uncommon for people nowadays to switch brands simply because competitors take ESG matters more seriously. This is because they want to support businesses whose values reflect their own.
But when it comes to ESG, there is no one size fits all strategy. Each sector, including real estate, needs to tackle specific concerns and act responsibly in the following ways.
Environmental criteria for ESG generally involve anything that impacts the natural environment. For the real estate industry, this includes (amongst others) the source and usage of natural resources, measures to cut back on pollution, recycling and waste management programs, and more. One especially pressing environmental concern for real estate developers is the energy efficiency and emissions of their buildings, which are assessed by “green” rating systems such as Leadership in Energy and Environmental Design (LEED) and Excellence in Design for Greater Efficiencies (EDGE).
Social criteria for ESG looks at how the organization maintains and builds relationships with its stakeholders, which include not just its customers, but also its suppliers, vendors, and other business partners. This includes efforts that give back to the local community like livelihood programs or support for mirco enterprises, to name a few.
Governance criteria delve in the organization’s accurate and transparent accounting methods, integrity, competence, and diversity when selecting its leaders.
It also includes efforts that they take to improve diversity, culture, and reputation within the organization. This is not just applicable to those working within the company, but also to tenants, management companies, and other on-site staff.
Why is ESG Important For Real Estate Developers?
Real estate is an important sector as it impacts cities and influences the character of its surrounding properties.
There is a growing consensus that real estate, economic growth, and the state of the environment are interlinked. This is because each development plays a significant role in improving the quality of life giving new opportunities to provide housing, rehabilitate public spaces, and invest in “green” infrastructure.
This is especially true for our country, as the effects of climate change are disproportionately felt by our communities. Due to our location, our home is especially vulnerable to natural disasters such as flooding, earthquakes, and typhoons.
But ESG concerns go beyond this. We also have to consider the rising income inequality and the long-term trend of urbanization as we take on each project. We must be aware of the needs of both our prospective tenants as well as the existing community to ensure that our projects are mutually beneficial.
Thus, developers play two roles. We are both the culprit, as each of our projects consumes natural resources and takes up land; and the advocate, as we have the opportunity to invest in eco-friendly developments that can improve both our communities and the environment around us.
How Pueblo de Oro does ESG
At Pueblo de Oro, our ESG strategies are deeply integrated into how we develop and run each of our master-planned communities. For over two decades, we have held one firm belief: a house is only as strong as its foundation, and the family ties that bind it.
From that, we pursued building premium, quality homes that cultivate better ways for Filipino families to live.
Pioneering “Green Living”
We are the pioneering developer for green living in the Philippines. For the last 25 years, we have consistently integrated powerful environmental protection measures in each of our developments. This includes flood control measures, erosion mitigation measures, recycling programs, green living spaces, and nature reserves — all of which make our communities more environmentally resilient.
Working with Nature
Long before ESG became a global trend, we have been committed to protecting the natural world around us, which we continuously perform through the following programs:
- Permanent efforts to maintain and protect our 40-hectare urban forest, which is home to numerous rare animal and plant species. We do this in coordination with nearby communities, volunteer organizations, and the Department of Environment and Natural Resources (DENR).
- Use of organic farming products, such as herbicides and fertilizers. This allows us to cut out harmful chemicals while preserving the beauty of our developments.
- Regular tree planting activities, garbage separation, support for e-vehicles and shuttles to cut down on emissions and waste, and promote sustainability.
Empowering our Communities
Aside from innovative, environmentally-protective measures, we also dedicate ourselves to promoting the social aspect of our developments. This is seen in how we craft master-planned communities.
In these communities, Filipino families have everything they need for holistic living, such as commercial spaces and reputable healthcare, financial, and educational institutions. These are easily accessed through walkable streets and proximity to public transport hubs and main thoroughfares.
Not only does this make life healthier and more convenient, but it also promotes eco-friendly habits. We encourage families to take a stroll to their destination — rather than drive. We also have pocket green spaces and fitness parks that not only provide closeness to nature but is also undeniably beneficial for the health and wellbeing.
Pueblo de Oro also implements outstanding social welfare initiatives, which are aimed at benefiting our adopted communities. We provide employment opportunities, training programs, life skills workshops, and much more.
With our strengths in both residential real estate and business development, Pueblo de Oro establishes communities and lifestyles that benefit everyone involved.
ESG in the real estate industry shows that it is important for developers to serve the interests of both the environment and the people around them.
As one of the top developers in the country, Pueblo de Oro dedicates itself to providing the best house and lots for sale by strictly following our ESG strategy. Through this, we can create sustainable developments where Filipino families can enjoy an enhanced quality of life.
Contact us today to learn more about our ongoing developments, and how we continuously uphold the gold standard of community living.