Originally published on March 13, 2024, by Jennifer Lefurgy, Ph.D., for NAIOP.
Understanding the ever-evolving regulations and reporting requirements around ESG can be challenging. A panel of industry experts spoke to I.CON West attendees on why these regulations are about more than compliance. They can lead to market differentiation, improved communication with tenants, and interest from global investors.
Moderator Megan Krest, associate director of ESG at Cushman & Wakefield, asked the panelists about their work in California involving reporting and compliance. Ethan Gilbert, director of global ESG at Prologis, discussed AB 802, a California law requiring buildings over 50,000 square feet to submit annual energy consumption data to the state.
“It’s a challenge because most industrial owners are operating under a triple net lease model, so utilities are under the direct control of our tenants,” he said. “The usage is not something the landlords have insight into, yet the state holds us accountable.”
Prologis has been modifying its lease language to make sure that they have data-sharing agreements in place to ensure the company has access to the information needed to meet compliance obligations. It’s taken some work to help tenants understand why Prologis needs this data and what they intend to do with it. “We don’t want to share this publicly. We don’t want to give away your secret sauce, but we want to make sure that we can work together on improving the performance of the asset,” Gilbert said. He’d like utilities to share their data more easily, too.