{"id":1004572175,"date":"2022-03-16T09:51:46","date_gmt":"2022-03-16T17:51:46","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004572175"},"modified":"2023-01-27T09:37:52","modified_gmt":"2023-01-27T17:37:52","slug":"life-sciences-properties-must-make-esg-a-priority-heres-how","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/life-sciences-properties-must-make-esg-a-priority-heres-how\/","title":{"rendered":"Life Science Properties Must Make ESG a Priority. Here\u2019s How."},"content":{"rendered":"
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Suzet McKinney<\/p><\/div>\n

Even before COVID-19, the life science real estate market was heating up as never before. Behind this growth are demographics\u2014an aging U.S. population requiring more healthcare facilities\u2014and a well-documented preference among biotech, biopharma and health-care device manufacturers for better appointed, more sophisticated spaces for their research, development and production.\u00a0<\/span><\/p>\n

Now, as the pandemic abates, venture capital is flooding into the sector at a historic pace, with VC allocations breaking records every year. But like nearly every other investment category, life science real estate is increasingly being evaluated through the filter of environmental, social and governance criteria. Indeed, ESG investing is booming<\/a>, and has become \u201ca critical element in gaining market share, engaging employees and raising capital,\u201d as Bain & Co. noted in a recent report<\/a>.<\/p>\n

With investors and fund managers using ESG ratings to\u00a0guide investment strategies, as documented in a recent MIT Sloan School of Management report<\/a>, developers in the fast-paced life science industry have come under scrutiny. This isn\u2019t surprising. After all, the life science ecosystem touches the lives of countless millions of people around the world daily. Life science companies, including their real estate developer partners, are under an ESG microscope from regulators, activists and the media.<\/p>\n

Critical Criteria\u00a0<\/strong><\/h2>\n

A distinguishing feature of life science developers is that their assets\u2014laboratories, production facilities and major life science campuses\u2014are expensive, complex projects that take years to plan and build. Well publicized and highly visible to the surrounding communities, these projects can become a lightning rod from an ESG perspective. While it behooves every organization to apply ESG to their purpose, mission and operations, the bar for life science real estate developers and their tenants may be set even higher.<\/p>\n

Clearly and transparently communicating ESG commitments and controls is the key starting point. In this effort, the developer must convey this information to investors, shareholders, local officials, regulators and community members.<\/p>\n

As developers, we naturally start with the environmental impacts. Have potential issues or known problems been disclosed? What are we doing to ameliorate these environmental impacts? How have we operationalized environmental protection and sustainability?<\/p>\n

On the \u201csocial\u201d element of ESG, consider broadening your perspective. In 2021, we formed the Sterling Bay Diversity and Inclusion Council, a cross section of our C-suite leaders to meet regularly and explore ways to create more inclusive, creative and productive environments in life sciences and office buildings.<\/p>\n

Going beyond diversity and inclusion, we\u2019ve worked hard to communicate the positive economic impact life science businesses can have in an area\u2014especially in underserved neighborhoods. Research has shown that life science developments facilitate job growth and greater business activity. Every life science job creates an additional 3.57 jobs<\/a> to support it in the larger economy; 40 percent of these jobs employ workers with high school or GED-level qualifications; and every dollar invested in life science research increases business activity<\/a> in an area by $2.43.<\/p>\n

An ESG Checklist<\/b><\/h2>\n

A vocal commitment to ESG is one thing but operationalizing it can be daunting. At Sterling Bay, we\u2019ve created a checklist to help ensure that our many activities conform to our public ESG goals, which in turn can be shared with stakeholders. The checklist includes:<\/p>\n