Real Estate Investors (REITs, CRE, Asset Managers)
We work closely with real estate investors and operators - whether they are starting or well into their sustainability journeys - to seize opportunities arising from shifts in the industry. We support REITs, corporate real estate owners, and other real estate investors on a variety of sustainability and climate topics, ranging from Net Zero target setting to physical climate and transition risk analysis.
What We Do for Real Estate Investors
For investors starting their sustainability journey
Create a sustainability ambition & roadmap
No matter where your company is in its sustainability journey, setting a clear ambition and strategic vision around which the entire organization can rally is vital to driving sustainable impact. We support our real estate investment clients wherever they are, from establishing an initial vision at the outset of their journey to revisiting and refreshing their goals when market conditions and dynamics change.
Leverage data & analytics
As reporting requirements and data sources become increasingly complex, data-driven digital solutions become integral to simplifying and automating the process. We make our proprietary tools, like our ESG Data Platform, available to our real estate investor clients to help them measure, manage, analyze, and report key sustainability, climate, and ESG data with the click of a button.
Develop robust narratives for leadership & investors
Creating narratives which highlight accomplishments while illustrating goals and targets is essential to helping leaders and investors understand your company’s sustainability journey. From ESG / sustainability reports to executive leadership trainings, we support our real estate investor clients to build narratives which showcase the sustainable value they create and help key stakeholders understand their vision for the future.
Unlock external financing (federal & state subsidies)
For owners and operators of real assets, a wide array of financial incentives and subsidies are available, but finding them and understanding them is not always straightforward. We bring our deep knowledge of state and federal incentives in the sustainability space to help our real estate investor clients access new capital flows and finance their sustainable growth plans.
For investors already well into their sustainability journey
Optimize and deliver on commitments (Net Zero, renewable energy, etc.)
In recent years, real estate investors have rapidly set a host of sustainability commitments, ranging from Net Zero and emissions reduction targets to commitments on renewable energy and climate resilience investment. We accompany our real estate investment clients in delivering on those promises, helping them to assess what is achievable and plot a financially viable course to get there.
Quantify value at stake from sustainability
The financial case for sustainable- and climate-focused business models in real estate is not always evident or straightforward for investors. We leverage our expertise of what works and what doesn’t for real estate investors – coupled with proprietary solutions – to ensure our clients capture the financial opportunity that sustainability offers while protecting shareholder value.
Assess climate risks and integrate them into decisionmaking
Today, it seems that every major insurance provider has its own climate risk projection with troves of property-level data but with little guidance on how to make sense of it. Through our extensive work with climate risk data from multiple sources, we have developed a bespoke methodology backed by our proprietary solution (RECRA), allowing us to help your company rapidly analyze climate risks across the portfolio and integrate findings into acquisition and capital recycling processes.
Enhance reporting & disclosures
Whether it be the enacted California Climate Disclosure law, disclosure requirements currently under consideration by the SEC, or other legislation in Canada or the EU, legal requirements for real estate investors are increasing rapidly. We help our real estate clients understand what their requirements are, what their peers are doing, and position them to enhance disclosures in a way that is consistent with their operating model and business needs.
Examples of Our Work
Developing a Net Zero Strategy for an S&P 500 REIT
Supported a listed REIT to set and plan for delivery on a Net Zero target, including developing a bespoke quantitative model to incorporate building energy efficiency improvements, electrification trends and initiatives, the greening of the grid, and renewable energy procurement across a variety of asset classes and geographies. We also estimated associated costs to help prioritize ROI-positive initiatives and make the business case for integrating sustainability into capital deployment processes.
Assessed bankability of deal structures for onsite solar for a major healthcare REIT
Supported a major American healthcare REIT to assess the business case for a pilot onsite solar program designed to provide renewable energy for ~300,000 sqft. of assets. This effort included analyzing the NPV of the installations across a range of deal structures, assessing their impact on NOI in multiple energy price and interest rate scenarios, and understanding roof replacement considerations. We also supported the REIT assess the solar solutions provider landscape to identify robust partners.
Integrating Physical Climate Risk into a public REIT's acquisition and divestment processes
Supported a listed REIT to analyze and synthesize the physical climate risks facing its portfolio of more than 1,000 properties, leveraging the data provided by the company’s insurance broker and our proprietary XXX to distill the risk facing each property into a unique risk factor which accounts for 5 different climate hazards in multiple Representative Concentration Pathways and multiple timeframes. We also worked with the REIT to identify how physical climate risk can be integrated into its investment processes.
Featured Tools & Solutions for Real Estate Investors
Real Estate Climate Risk Assessment (RECRA)
RECRA combines property-level physical climate risk data and proprietary analytics to help REITs and organizations with large physical footprints to rapidly assess the risks facing their portfolios, size value at risk, and prioritize where to act.
ESG Data Platform
Telesto’s ESG Data Platform offers an integrated ESG data solution tailored to your company’s specific business needs. The platform enables your organization to automatically calculate Scope 1-3 emissions, conduct materiality assessments, and generate TCFD- and SBTi-aligned reports with a single click.
Featured Insights for Real Estate Investors
Materiality & REITs: What the Data Tell Us
Materiality assessments are a central part of REITs’ ESG reporting and disclosures. After reviewing the top 100 American REITs materials, Telesto analyzes the trends shaping the space.
The “S” in ESG represents social factors, which are increasingly recognized as crucial considerations for real estate firms. The “Social” category includes a company’s impact on society and its stakeholders.
For real estate firms looking to create long-term value, the integration of environmental factors continues to be a strategic imperative. While some real estate firms hesitate and perceive ESG initiatives as a financial hurdle, a closer look reveals that the benefits far outweigh the costs.
With only 46% of the 100 largest REITs conducting materiality assessments and many focusing on the wrong material topics, this multi-trillion-dollar industry leaves much to be desired in its contributions to sustainability.