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Investors - NOVEMBER 22, 2021

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Commercial real estate lenders can play an ESG role

by Loretta Clodfelter

When it comes to environmental, social and governance (ESG) factors in real estate, commercial real estate lenders can also play a role.

“Commercial real estate properties are one of the largest contributors to carbon emissions, and property owners are shifting focus to curtailing emissions and upgrading properties to accomplish their ESG goals,” noted Alex Cohen, CEO of Liberty SBF, a nonbank lender. “Europe has already set carbon caps and guidelines for ESG, and European entities will be held to that standard for investments in the United States. As more and more ESG requirements make their way to the U.S., lenders will be playing a significant role in this capital-intensive process.”

Cohen says those planning on investing into commercial real estate loans in the near future should get a head start and look through the lens of ESG because, in due time, there will be requirements to retrofit buildings, comply with carbon caps and more. “Short-term, floating-

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