Why ESG matters for multifamily developers, investor

In recent years, environmental, social, and governance (ESG) considerations have become central in commercial real estate, especially in the multifamily sector. Investors now evaluate properties based on environmental impact, community and social factors, and governance practices. Properties that fail to meet evolving efficiency or resilience standards risk losing value, making ESG integration critical for developers and investors.

Insurance is closely tied to environmental ESG factors, as climate risks like storms, flooding, and wildfires have raised premiums and limited coverage. Properties with verified sustainability measures may benefit from better terms, while poor ESG performance can increase costs or restrict insurance. Environmental hazards, including contamination and hazardous materials, often require specialized liability coverage and thorough due diligence.

To manage risks, owners should maintain transparency with insurers, invest in resilience measures, and align insurance programs to cover pollution and climate-driven perils, enhancing both the sustainability and marketability of real estate portfolios.

https://www.esgdive.com/news/esg-multifamily-developers-investors-climate-considerations/804395/