ESG Leadership Through Bold Transparency And Stakeholder Engagement

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Posted: Aug 19, 2022

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Erin Hatcher is Vice President-Sustainability at AMLI Residential, developer, owner and manager of environmentally responsible, luxury apartment communities. With a focus on building certifications and investor reporting, she leads the establishment and integration of AMLI’s ESG strategy. Erin leverages her unique skillset and experience in this highly collaborative role that works across AMLI’s active markets with internal development, construction and operation teams. She received her BFA in Interior Design from the Illinois Institute of Art – Chicago, is LEED Accredited Professional and has obtained her certification as a Construction Documents Technologist.

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ESG Leadership Through Bold Transparency and Stakeholder Engagement

The importance of Environment, Social and Governance (ESG) reporting has exponentially grown within the real estate industry. Although ESG reporting standards exist, many have not been developed with a multifamily real estate lens and require interpretation for applicability or may focus on less material topics. This leaves some organizations frustrated or hesitant to share progress on initiatives. Others have taken a leadership role in shaping ESG reporting by sharing their bold ESG targets and being transparent of progress, positive or negative, as they navigate unprecedented times.

Bold Transparency

AMLI Residential’s ESG journey began back in 2006 when publicly committing to achieve Leadership in Environmental Design (LEED) Silver® certification (or higher) for new developments. At that time, it was rare for multifamily properties to achieve any green building certification, and LEED was and still is regarded as the one of the most rigorous and holistic green guidelines available. This objective was driven by thoughtful, forward-looking leadership and laid the groundwork for building an internal culture focused on goals that stretched beyond obvious, short-term financial metrics.

Today, AMLI’s goals still include achieving LEED certification but stretch well beyond individual building achievements. As highlighted in AMLI’s 2020 Corporate Responsibility Report, portfolio level environmental targets are driving strategic organizational change and better integration of ESG within the operations of the company. This annual report highlights progress on a range of ESG topics, which includes updates on greenhouse gas emission totals and progress on a target to reduce AMLI’s scope 1 and 2 emissions 50% by 2030. In partnership with this reduction, AMLI includes an energy reduction goal of 20% and an objective to increase sourcing of renewable energy by 15%, both on and offsite. These goals expand to address more environmentally focused issues including a water reduction goal of 15% and 15% increase in waste diversion, all to be achieved by 2030. By sharing year over year progress on these goals, it ensures accountability and pushes for authentic messaging.

The “S” in ESG has taken shape and reporting on social topics continues to expand. In addition to more commonly reported social metrics showing employee demographics such as race and ethnicity, gender, and age, goal setting on other topics is where many leaders are starting to shine. The goals range from increasing employee education and expanding benefits to setting metrics to ensure resident satisfaction. A key element to safeguarding success with people-focused, social goals is to create dialog with your stakeholders and listen.

Stakeholder Engagement

The business activities of multifamily developments and asset managers impact a wide variety of stakeholders, and each entity represents a range of interests. To better understand each stakeholder’s values, AMLI launched a survey in 2020 that invited investors, employees, residents, and local community partners to identify the most important ESG issues. This led to the creation and release of a materiality matrix, a data-driven approach to highlight and align our stakeholder priorities. Out of the 23 ESG topics evaluated, resident satisfaction, employee satisfaction, employee ethics, data security and privacy, and resident health and safety were the top five most important according to all stakeholders. Climate strategy and employee inclusion and diversity also topped the list. This matrix drives decision making around ESG initiatives and helps prioritize organizational goals.

The 2020 ESG-focused survey was a break from the annual, resident-facing survey, AMLI’s Sustainable Living Index. The Index, which was launched in 2017 and is in its fifth year, is a valuable tool that enables AMLI to continuously listen and respond to residents’ sentiment around ESG issues, with a focus on environmental features and health and wellness. The results drive internal decision making at our communities but also serves a greater purpose for the multifamily industry by highlighting resident perspectives about sustainability. The 2021 Index reaffirms residents focus and understanding of healthy homes and their connection with green buildings. 79.5% of respondents said living in an apartment with green features is beneficial to their health and 43.2% said green features factored into their decision to live at AMLI. It also provides helpful insights topics like electric car charging stations by learning that 56.2% of residents think they will be driving an EV or a plug-in hybrid in five years.

From Reporting to Results

Reporting expansive ESG strategies and goals can be a big lift, and some skeptics question whether we should invest more in our actions rather than our words. The truth is that we need to do both. Collecting social data points enables organizations to see if their intentions create their intended impact. The same is true for environmental goals. It also empowers organizations to better engage cross-department initiatives since there is clarity on the goals and priories of organizations.

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