Mixed-use REIT JBG SMITH’s (NYSE: JBGS) mission to create vibrant, amenity-rich communities where people thrive is underpinned by its integration of sustainability priorities across all levels and functions of the organization.
“Organizations cannot truly achieve integration without scale and engagement throughout entire value chains, from the porters that clean our buildings to asset managers developing business plans, to the development team creating our next decade of building stock, to the c-suite that guides investment strategy,” says Kimberly Pexton, senior vice president of sustainability at JBGS.
The REIT’s sustainability priorities include maintaining a carbon-neutral portfolio, setting interim 2030 performance targets, developing a net-zero strategy, incorporating climate-related risk assessment into diligence processes, underwriting energy and water efficiency projects across the portfolio, developing a robust ESG scorecard tied to all employee compensation, and deploying asset-level engagement programs to improve waste diversion.
“Key objectives, performance targets, and public progress reporting are only some items, but the work to achieve results at scale is built by implementing hundreds of different moves daily,” Pexton says.
JBGS’s efforts were recognized recently when it received Nareit’s 2024 Leader in the Light award in the diversified sector. The Leader in the Light program honors REITs that demonstrate leadership in demonstrating sustainable and socially responsible investment and operating practices, good governance, and transparency.
“Sustainability is important to JBGS because it is a clear business driver — our customers expect it, our investors require it, and our people are proud of our work in this space,” Pexton says.
She adds that sustainability is a key part of the firm’s placemaking strategy, aimed at mixing high-quality multifamily and commercial buildings with anchor, specialty, and local and minority retail businesses in “a high-density, thoughtfully planned and designed public space.”
JBGS’s use of innovation to enhance a mixed-use urban destination at its National Landing community in Arlington, Virginia, earned it a 2024 Nareit Impact at Scale award. Based in nearby Bethesda, Maryland, JBGS’s National Landing portfolio is made up of 5.6 million square feet of office space as well as 4,223 existing and under-construction multifamily units, and 8.2 million square feet of potential space.
Focus on 2030 Targets
“Our intention is to remain focused on the 2030 achievement of our performance targets and on operationalizing our net-zero carbon emissions strategy,” Pexton says.
By setting predicted energy/water reductions, an embodied carbon reduction target, and carbon-neutral development assessment, JBGS differentiates its approach, addressing locked-in carbon emissions in the development pipeline.
And when it comes to transparency and disclosure, JBGS takes a “more is more” approach. JBGS remains committed to reporting financial and non-financial indicators in public facing documents such as its sustainability report, annual report, investor presentations and quarterly packages, and on its corporate and property level websites. “We are often told that we disclose more than our peers by drawing attention to performance targets and progress on those targets,” Pexton says.
In its latest annual report, JBGS proactively included its 2030 targets and progress for both the existing portfolio and development pipeline and details about its long-term strategy to reduce energy and water consumption; including operational and capital improvements that align with its business plan and contribute to attaining performance targets.
Meanwhile, JBGS completed its first official ESG disclosure test in 2023, which is distinctive from its annual environmental data verification process. The work is an ongoing collaboration across the JBGS accounting, human resources, impact investing, and sustainability teams. Results of this test flagged no issues, Pexton says, with JBGS’ efforts resulting in a GRESB Public Disclosure score of “A" for the past four consecutive years.
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