SA REIT and Nedbank lead sustainability drive in real-estate sector

Source: Supplied. Joanne Solomon, chief executive officer of SA REIT Association.

This guide is a valuable resource for SA REIT members and property organisations starting their sustainability reporting.

It provides key information to improve their reports and outlines a framework of recommendations for sustainability and climate-related disclosures, aligning with international standards in the South African property sector and the global-sustainability landscape.

Joanne Solomon, chief executive officer of SA REIT Association commented, “As industry partners, we are proud to launch the inaugural SA REIT Sustainability Disclosure Guide, marking a significant advancement in fostering a unified approach to sustainability within the South African real-estate sector.

"The property sector plays a crucial role in tackling environmental, social, and governance (ESG) challenges. Our goal is to guide the industry toward a future where sustainable practices are seamlessly integrated into business strategies, enhancing both resilience and value.”

Sustainability has become a key priority for businesses, with capital markets increasingly evaluating performance based on ESG metrics in their investment decisions.

This trend is supported by compelling evidence linking strong ESG performance to an organisation’s ability to secure long-term competitive and financial advantages.

Furthermore, sustainability reporting offers investors valuable insights into a company’s long-term viability, risk management, and growth potential. This transparency empowers investors to make informed decisions that align with their values and financial goals.

“Meaningful sustainability disclosure is essential for attracting financial capital, enhancing accountability, improving business performance, and fostering a resilient property sector.”

The guide aims to enhance the reliability, consistency, and comparability of ESG data among South African REITs, promoting objectivity, facilitating analysis, improving valuations, supporting benchmarking, and encouraging cross-organisational comparisons, said Solomon.

Gary Garrett, managing executive of property finance: Nedbank CIB commented, “As a purpose-led organisation, we aspire to be a key participant in promoting a more sustainable future for the real-estate sector. We are intentional about sustainability and about contributing positively to the communities in which we operate.”

The SA REIT Sustainability Disclosure Guide highlights the significance of accurate and reliable ESG reporting, aligning with global best practices and standards, including the Global Reporting Initiative, the Sustainability Accounting Standards Board, and the Task Force on Climate-related Financial Disclosures.

Garrett said the practices outlined in the guide foster transparency, enhance stakeholder trust, and promote sustainable growth in the property market.

Solomon said the guide aligns with the voluntary JSE Sustainability and Climate Change Disclosure Guidance of 2022 and global best practices, specifically for the South African property sector. It is recommended to use this guide alongside the JSE guidance which serves as its foundation.

Many recommendations in these frameworks are not industry-specific and often overlook the unique challenges faced by property owners in South Africa. For instance, an international decarbonisation-disclosure framework may not account for local municipality restrictions on electricity wheeling or the lengthy process of obtaining water-use licenses.

“This guide will assist issuers and investors in the South African property sector by standardising key sustainability concepts and their reporting. While it serves as a valuable voluntary tool, its application is not mandatory,” she added.