As climate change and other environmental challenges continue to take center stage, more and more apartment operators are talking about Environmental, Social and Governance (ESG) factors and how to create more comprehensive ESG practices within their organizations.

The "E," specifically, has been a huge point of focus for many apartment operators across the country who are looking to minimize their environmental impact and create more sustainable communities. From utilizing eco-friendly building materials to mitigating waste from apartment communities, there are multiple facets of the environmental aspect of ESG that operators are taking action on.

Local water sources
Apartment communities are at risk of negatively impacting the environment in a number of ways, such as using harmful pesticides and fertilizers or neglecting to properly remove excess trash and pet waste. Chemicals used to repel pests and treat gardens at a community can trickle into nearby bodies of land and water, and over time, wreak havoc on the environment. Pet waste may seem like a minuscule problem, but it's one of the greatest environmental impacts. As more communities become pet inclusive, operators are looking to better mitigate pet waste. After all, pet waste does not simply decompose and disappear – it causes long-term impact. Eventually, it washes into water sources and causes great damage to surrounding areas and can contaminate local water sources.

Ecological Solutions and Evidence published a study that found almost every 2.5 acres of land contains roughly 11 pounds of phosphorus and 24 pounds of nitrogen derived from unscooped pet waste. High levels of these nutrients not only decrease the oxygen necessary for aquatic life to survive, they simultaneously bolster the growth of harmful algae and disease-causing bacterias, like fecal coliform, in our water supply.

Additionally, a surplus of nitrogen in the atmosphere encourages an increased production of ammonia and ozone, pollutants that impair the ability to breathe, restrict visibility and negatively adjust plant growth. Excessive amounts of nitrogen also causes faster-growing nuisance plants to out-pace and eliminate slower-growing plants that provide vital benefits to the environment.

Carbon emissions and energy consumption
Reducing carbon emissions is one of the main areas operators are focusing on. Nearly 40% of global carbon dioxide emissions come from real estate, and of that, approximately 70% are produced by building operations.

Many companies have committed to reaching net-zero emissions in the future. For example, Hines has been targeting net-zero operational carbon in its building portfolio by 2040. Hines has been developing systems and roadmaps for reducing embodied carbon across building lifecycles and designing processes to retrofit existing buildings to be carbon neutral.

A large part of reducing carbon comes from managing energy consumption (electricity, water, gas) in communities. Companies are implementing smart home technology and thermostats, energy-efficient appliances, electric vehicle charging stations and more to help residents reduce and better manage their energy consumption – even when they're not home. Mill Creek completed several LED lighting retrofits within a few communities and reduced common area electricity use as much as 57%.

While the ultimate goal of being an ESG community and implementing sustainable practices is to protect the well-being of residents and enhance the longevity of the environment, there are ample operational benefits. Being an environmentally conscious community isn't just attractive to potential residents and investors – it's a revenue booster as well. ESG reporting can not only impact investment opportunities (investors are looking at ESG reporting efforts), but it can make an impact on attracting and retaining residents. Per multifamily data research cited on apartmentdata.com, 80% of apartment residents believe that residing in green apartment communities is beneficial to their health. Sixty-one percent of renters also say they would pay more each month for an eco-friendly apartment.

A more sustainable community is what modern residents desire. Operators can make an enormous difference for the environment and their residents by creating cleaner, greener and healthier communities. Implementing the practices and services that reinforce those efforts leads to higher resident satisfaction and occupancy rates and increased investment opportunities.