Embedding an ESG Mindset in Real Estate


Jenny Brusgul, National ESG Advisory Practice Leader, CohnReznick

Jenny Brusgul, National ESG Advisory Practice Leader, CohnReznick. Image courtesy of CohnReznick

Passion for ESG and sustainability can arise from many things: love for the planet, health issues, personal loss due to natural disasters, and so on. For Jenny Brusgul—a professional with a background in strategy consulting focused on mergers and acquisitions—it was inspired by numbers and methodical ways of resolving issues.

“I found my passion in ESG and sustainability when I saw the strategic and financial value that can be created from focusing on environmental and social impacts and resiliency,” she told Multi-Housing News about herself.

Late last year, Brusgul joined CohnReznick as the company’s national ESG advisory practice leader, a role within which she has to wear many hats, she confessed. From trusted advisor to the company’s clients to providing training to CohnReznick’s ESG and industry teams, as well as granting oversight and guidance on the company’s internal ESG programs and initiatives, Brusgul makes sure sustainability is top of mind for all. Here’s what she told MHN about what it takes to make ESG a standard practice across the board in the real estate industry.

Fill us in about CohnReznick’s ESG strategy and the amendments you made since you joined. What are the company’s goals from an ESG perspective?

Brusgul: CohnReznick has had a long history of focusing on environmental and social impacts, especially when it comes to helping our clients. In addition to the internal environmental and employee engagement goals, we also apply an ESG mindset when bringing our solutions to our clients. For example, we took a leadership role more than 40 years ago in the affordable housing industry to help companies benefit from the Low-Income Housing Tax Credit. We started our Renewable Energy Practice in the early 2000s and have purposely focused on clean energy versus fossil fuel companies.

In 2022, we launched our ESG Gamechanger Award program to recognize innovative companies that are changing the game by advancing business sustainability through ESG practices. It was a successful program and is currently active in its second year. One of the ways that I influenced this year’s program was to revise the questions posed to applicants to further quantitatively analyze the responses to enable easier comparison between applications.

Additionally, I have launched an ESG cross-functional working group across our Advisory, Tax and Assurance practices to apply an ESG lens over our existing capabilities, given the cross-functional nature of ESG. We will continue to apply an ESG mindset when serving our clients. My team is also leading the process of conducting our first materiality assessment to provide input into our inaugural sustainability report.

A company that’s just now beginning to look into ESG practices, where should they start?

Brusgul: They should start by taking a current assessment of where they are in their ESG maturity. Most companies already have ESG-friendly policies in place, whether it’s about waste reduction or DEI hiring. Therefore, taking an inventory of the current state can establish a baseline, report and be transparent about existing policies, and identify areas for improvement.

The next step is to identify key stakeholders and conduct a materiality assessment to prioritize material ESG topics that will have an impact on the business. The output of this materiality assessment will drive the company’s ESG strategy, communications and reporting.


READ ALSO: What the US Can Learn From Europe’s ESG Practices


Cost is the main challenge raised when ESG is brought up into the spotlight. Why is this a skewed perspective?

Brusgul: ESG is an investment just like implementing a new ERP system. Every investment involves cost, but what we aim to demonstrate to our clients is that ESG investments produce meaningful business returns.

Of course, some can have a long-term ROI and may be more difficult to quantify due to the intangible nature of the benefits. For example, higher employee engagement and more responsible business practices can attract better talent and reduce turnover. While there are cost savings from higher productivity and lower hiring costs, these indirect benefits are harder to quantify and can take time to realize, but they are indeed beneficial.

On the other hand, there are short-term benefits such as lower operating costs from energy efficiencies and waste reduction, as well as lower cost of capital as lenders are providing better financing rates for ESG projects. Finally, there are also tax credits and incentives that can offset certain ESG investments.

How should real estate companies tackle ESG risks?

Brusgul: Just as how I would advise any company, it’s always important to start by developing an ESG strategy that is aligned and embedded into the company’s overall business strategy, core values and long-term goals. This strategy should be incorporated into decision-making processes, including property acquisitions, developments and management, so that ESG is considered throughout business operations, such as ensuring that climate risk is factored into the purchase price of assets.

Given that the built environment contributes a substantial proportion of greenhouse gas emissions, there are sustainable practices real estate companies can invest in to reduce the carbon footprint of their properties, such as reducing energy consumption and water usage, installing solar panels and energy-efficient HVAC systems and constructing with low-carbon materials.

Seeking third-party certifications is another way for real estate companies to demonstrate their commitment to responsible business practices. Obtaining recognized certifications like LEED for buildings or GRESB (Global Real Estate Sustainability Benchmark) can not only mitigate risks but also attract socially responsible investors.

Which are the strongest motivators for the real estate industry to advance ESG practices?

Brusgul: The two pressure points for the real estate industry are coming from investors and regulators.  Investors are concerned about climate risk, in particular physical risk, which is the impact of climate change on buildings and properties. Investors also want to understand any transition risks, such as changes in regulations or the adoption of low-carbon technology. They want to understand how companies are mitigating these risks before they invest.

On the regulatory front, there are increasing state and federal laws that have sprouted up in the last few years with stricter environmental requirements to reduce greenhouse gas emissions and to become more climate resilient. For example, New York’s Local Law 97 imposes annual fines on most buildings over 25,000 square feet that exceed emissions limits beginning in 2025 to make NYC carbon neutral by 2050.


READ ALSO: Building the Case for Passive House Standards


What do investors look for in ESG? How about tenants/residents?

Brusgul: Investors are looking for transparency and accountability on ESG performance and risk mitigation. They want to ensure that their investments are aligned with their values and the impact they are trying to drive. As a result, better stakeholder engagement and communication with investors are key to keeping investors informed and involved in a company’s ESG efforts. While measurement methodologies differ depending on the industry, investors are looking for companies to measure and demonstrate the impact of their ESG initiatives by applying the best practices from various methodologies that best fit their needs.

On the tenant side, we are hearing our real estate clients say that their tenants are increasingly interested in ESG factors when choosing a property or leasing space. Many tenants, especially those in commercial and residential real estate, are seeking properties that align with their sustainability values and promote positive environmental and social impacts. They are looking for energy efficiency measures such as LED lighting and energy-efficient appliances and HVAC systems, and even renewable energy and EV charging stations. A healthy and comfortable indoor environment is important to tenants so they will prioritize indoor air and water quality, proper ventilation and natural lighting.

With the increasing focus on climate change, tenants may seek properties that are designed to withstand extreme weather events and have measures in place to mitigate potential climate-related risks. Some tenants seek buildings with green certifications and are willing to pay more for these amenities.

What makes an investment sustainable?

Brusgul: A sustainable investment takes into consideration ESG factors in addition to traditional financial metrics. While a financial return is important, sustainable investing also involves considering the impact of investments on society at large. Some key factors include evaluating a company’s carbon footprint, water usage, waste management and efforts to mitigate climate change. Social factors include labor practices, health equity and DEI within the company.

Sustainable investments are generally focused on the long-term rather than short-term gains. Investors seek to support companies that are committed to sustainable practices and are likely to be more resilient in the face of environmental and social challenges over time. Impact measurement is essential to ensure that investments are actually making a difference and aligning with the intended sustainability goals.


READ ALSO: The Growth of Green Financing in the Capital Stack


How do you check for greenwashing?

Brusgul: While more and more companies are releasing sustainability reports, the quality of the information is not consistent nor comparable to financial reports. Companies that are genuinely focused on sustainability are often transparent about their practices, goals and progress. Check if the company provides detailed information about its environmental initiatives, targets and performance.

I am always wary of vague or generic statements without specific data to support their claims. When comparing the company’s claims with ESG reporting standards, I check to see if they are genuinely going above and beyond or just meeting the bare minimum requirements.

Be cautious of marketing buzzwords or vague terms that sound eco-friendly but lack substance. Phrases like ‘all-natural,’ ‘eco-friendly,’ or ‘green’ can be misleading without concrete evidence to support them. Context matters when evaluating environmental claims. For example, a company claiming to be ‘100 percent renewable’ should be evaluated based on the specific operations or products they are referring to, as it may not apply to their entire business. Finally, look for third-party certifications such as ENERGY STAR, LEED and others, or verifications that are widely recognized.

What will ESG look like 10 years from now?

Brusgul: I’m optimistic that ESG will become more of a standard practice than an optional approach. As the understanding of ESG’s impact on long-term sustainability and financial performance grows, ESG factors may be more deeply embedded in investment decisions, corporate strategies and government policies.

On the regulatory front, governments worldwide might implement stricter regulations and reporting requirements related to ESG practices. This could involve mandatory carbon pricing, increased disclosure requirements and incentives for companies demonstrating positive ESG performance.

The financial sector is expected to further embrace sustainable finance instruments, such as green bonds, social bonds and sustainability-linked loans. The volume of assets allocated to sustainable investments could significantly increase as climate financing needed to meet adaptation and mitigation goals is estimated at trillions of dollars annually.

Standardization and transparency in ESG reporting will likely improve. Companies will be required to disclose more detailed and relevant ESG data, allowing investors and stakeholders to make better-informed decisions. Hopefully, we will more likely be able to compare apples to apples across sustainability reports.

Finally, advancements in technology, such as artificial intelligence and the Internet of Things, could play a significant role in low-carbon technology to reduce greenhouse gas emissions, and monitor and optimize ESG performance across various sectors.

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