Last year saw a surge in commercial real estate transactions, with a record $809 billion in commercial property sales, according to Real Capital Analytics. For many companies in the sector, including the commercial real estate services and investment firm CBRE Group, Inc., there has been a boom in business. But CBRE also saw a return on its investments in, and focus on, ESG (environmental, social and governance).
From the start of 2021 through to now, CBRE has repeatedly been recognized for the company’s diversity and inclusion efforts. Bloomberg also named CBRE to its Gender-Equality Index for the third consecutive year in February. In 2021, CBRE featured on the Human Rights Campaign’s “Best Place to Work for LBGTQ Equality,” the Disability Equality Index’s list of Best Places to Work for Disability Inclusion and on Ethisphere’s directory of the “World’s Most Ethical Companies” –for the eighth consecutive year.
“As a professional services firm, we are all about our people, whose integrity and commitment to ethical conduct served us well as we rallied to support colleagues and communities in need, while continuing to deliver world-class solutions for our clients,” said Elizabeth Atlee, CBRE’s senior vice president and chief ethics and compliance officer, said in a public statement.
Internally, CBRE was simultaneously building out its Diversity, Equity and Inclusion (DEI) team, promoting Tim Dismond from chief diversity officer to chief responsibility officer, uniting all of CBRE’s ESG efforts under his leadership. Ryan Mitchell and LaTonya Wilson were both hired to lead DEI efforts for CBRE; Mitchell for advisory services and real estate investments businesses and Woodson for global workplace solutions business.
The move to incorporate more ESG practices into the business is not unusual for the commercial real estate industry. A GlobeSt.com article published last June found that “over the last decade, commercial real estate players have increasingly considered the environment and sustainability when underwriting investments and operating properties.”
Quite simply, business leaders have recognized that the economist Milton Friedman’s 1970s doctrine, “the social responsibility of business is the increase profits,” is effectively dead. Neal Hartman, senior lecturer in managerial communication at MIT Sloan argued in his January 2021 article published by the school, that Friedman was suggesting “greed was good.” Hartmann points out that modern companies’ “focus on the environment and renewable energy have bolstered the brand images of these companies.”
Today’s consumers and shareholders would argue that “green” is good, and in fact, a focus on ESG can have a positive impact on revenues. Yet, more can be done. For example, CBRE contends listed infrastructure is neglected in ESG and sustainable strategies in the October 2021 investment insights report, Why Listed Infrastructure is Essential for ESG and Sustainability, published in conjunction with New York Life Investments. The report states “infrastructure may drive 50 percent of all decarbonization investment.”
So, as the world’s largest manager of commercial properties, CBRE has said that it is committed to improving the efficiency and sustainability of its own building operations as well as that of its clients. According to its 2020 corporate responsibility report, CBRE seeks a greenhouse gas reduction target of cutting its operational emissions by more than two-thirds by 2035.
Further, CBRE its announced commitment to net-zero carbon emissions by 2040 and as part of that strategy. The company has also signed The Climate Pledge, joining a group of companies committed to achieving the Paris Agreement’s net-zero carbon goal 10 years ahead of schedule. Efforts like these helped CBRE earn a spot on the Dow Jones World Sustainability Index for three consecutive years.
However, with approximately 500 offices worldwide and more than 100,000 employees, it stands to reason that CBRE puts so much emphasis on talent diversity. 2020 saw the launch of a partnership between the real estate shop and social impact platform Project Destined, which now includes the Historically Black Colleges and Universities (HBCU) Bridge Program, connecting students with CBRE leaders to expose them to industry career paths.
As CBRE President and CEO Robert Sulentic said in the 2020 Corporate Responsibility Report, “We are particularly focused on onboarding and advancing more people of color and women….”
Beyond internal DEI initiatives, CBRE also pledged $1 billion in purchasing from minority- and women-owned suppliers in 2021, tripling that spend by 2025.
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