CEDER 2024 in review: ESG – more than just green

The market presentation held by CBRE at the beginning of CEDER 2024 showed, among other things, that ESG-compliant properties are up to 10% more valuable in the eyes of CEE investors, with 80% of investors focusing on upgrading their existing assets.

To begin the ESG panel that followed the presentation, moderator Maria Florea, Head of Office Advisory at iO Partners, wanted to clarify the difference between the terms “ESG” and “green”.

Oana Cojocaru, Sustainability Director at Globalworth, explained that ESG covers much more than just the environmental facet of things, and that it all starts from the factor of governance: “You cannot have environmental policies, and you cannot have social policies unless you have governance. Governance means that you need to have regulations within your company. (…) Governance comes to be an assurance that what you say (…) within your environmental and social policies is actually what you do.”

Later in the discussion, Tudor Popp, Managing Partner at Hotspot, also emphasized that the S and G in ESG are very important aspects that need to be taken into consideration, using their company, which specializes in coworking spaces, as an example: “Yes, our spaces are green certified, and we look a lot into these aspects of certification. (…) The social and the governance are also very important for us because our business is to be attractive. (…) And the attractiveness comes through being in the right place and doing all that we know in order to be sociable.” He went on to explain that he considered the social part crucial for bringing people back to the office, as well as the “soft factors” which deal with all the facets of wellness: from social, to physical, to organisational wellness.

Ioana Roman, Partner & Head of Real Estate at Filip & Company, explained that most tenants intending to relocate are looking very closely at all three aspects of ESG: “We've seen, for the past three years, increasingly requests from tenants to include various clauses in our leases regarding ESG components. Of course, the main focus is on the environmental component, but also, we've seen various clauses on the governance, either related to anti-corruption, money laundering clauses, to make sure that at least during the lease term, everybody is observing the right rules. (…) We've seen also requests from the tenants on (…) how the developers are looking at the community around them, how they are basically helping or contributing to this.”