US commercial real estate debt providers continue to see environmental, social and governance-geared lending as an auxiliary part of their business, not an essential component, according to senior commercial real estate executives speaking at New York University’s InnovateESG forum on February 27. “At the moment, it’s like a good to do, nice to have, and in this particular moment in the cycle when things are so volatile, [ESG] is taking a backseat to just getting deals done as efficiently as possible,” said Sairah Burki, managing director of regulatory affairs and sustainability at the New York-based Commercial Real Estate Finance Council.
There was a sense more lenders will start to incorporate ESG principles into their lending practices. But this shift is not happening overnight. Delays, however, could be costlier than moving ahead with implementing ESG-friendly strategies and there continues to be a significant divergence between what is happening in the US and what is going on in the UK, Europe and beyond. “I no longer believe it’s about how much ESG is going to cost me [if I put it in place], but how much it’s going to cost [if] I don’t put ESG in place,” said Sabine Schaffer, co-founder and CEO Europe of Sydney-based manager Pro-invest Group, speaking at affiliate PERE’s Asia Summit last week.