ESG: Why It’s Important and Ways Operators Can Excel

It has morphed from an obscure acronym to a primary objective for apartment operators. ESG is the short form of environmental, social and governance—as most now know but might not have five years ago—and essentially measures an organization’s commitment to environmental and social impacts and evaluates the way it manages those components.

A company’s ESG metrics are becoming increasingly important to investors, residents, stakeholders and the public at large. An organization does not want to be viewed as one that doesn’t engage in environmentally friendly practices or is tone-deaf to social issues.

Naturally, many organizations were already engaging in ESG-friendly initiatives before the concept was given an official name—but that doesn’t mean the effort cannot be further strengthened. For instance, practices that were thought to be environmentally friendly in the past might have been replaced by greener alternatives. Adjusting accordingly can prove crucial, particularly when considering some government-sponsored enterprise (GSE) loans offer improved rates for sustainability and affordability.

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