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Page 30 - February 1-14, 2023 www.crej.com Our Real Estate Group Serving the Commercial Real Estate Community Leasing Real Estate Development Real Estate Acquisition Environmental Private Equity Commercial Lending, Workouts and Foreclosure Real Estate and Commercial Litigation Construction Contracts and Litigation Corporate 1700 Lincoln Street, Suite 4300 | Denver, Colorado 80203 Phone 303-298-1122 | Fax 303-296-9101 www.SennLaw.com Our clients rely on our experienced team of lawyers to guide them through all of their legal needs, from significant business decisions to the most complex global deals and litigation. Our breadth and depth of practice enable us to handle the most complex matters and solve our clients' problems seamlessly. Law & Accounting W ith an estimated 40% of global greenhouse gas emissions coming from the construction and real estate sector, pressure from stake- holders to hold the industry responsible shows no sign of easing up. Going into 2023, expectations are high that construction companies will continue to adopt more envi- ronmentally sustainable busi- ness practices, especially in the wake of local energy use ordi- nances and mandates. These rapid developments on the reg- ulatory front mean that there will be close monitoring and reporting of energy usage, and building energy performance and progress. For example, the Denver City Council recently passed Ordinance 21-1310, which adopted a comprehen- sive build- ing decar- b o n i z a t i o n policy for existing com- mercial and multifamily buildings. In light of these and other i n d u s t r y - wide devel- o p m e n t s , here are four simple ways that companies can prepare for the fast-paced changes affecting environmental, social and gov- ernance developments in the construction and real estate industry. n Conduct a self-assess- ment at the entity level. “To know thyself is the beginning of wisdom.” The initial phase of adapt- ing to the changes your business may e n c o u n t e r and keep- ing up with the rapidly c h a n g i n g sustainabil- ity market requires an initial self- assessment. Because of the diverse nature of ESG, each company has to own where it is in the ESG journey. Compa- nies should engage in a pro- cess to make sense of how the organization is dealing with current sustainability scenarios as well as gain insight as to where it is headed in terms of sustainability. Forward-think- ing tools – such as forecasting, back casting or scenario plan- ning – may be helpful for this exercise. This self-assessment would help inform the orga- nization’s overall short- and long-term sustainability goals. To that end, a company may engage assessment tools such as software programs and questionnaires that can provide key insights that will help the company improve its respon- siveness to its stakeholders. E q u i p p e d with a solid k n o w l e d g e of where your com- pany is in its sustainability journey, you can empower your contrac- tors and staff with the right tools to get the job done. n Conduct an assessment at the product/service-offer- ing level. The construction and real estate industry has the potential to make a huge difference when it comes to environmental sustainability. According to the U.S. Envi- ronmental Protection Agency, “green building” is the prac- tice of “creating structures and using processes that are envi- ronmentally responsible and resource-efficient throughout a building’s lifecycle from siting to design, construction, opera- tion, maintenance, renovation and deconstruction.” In other words, sustainable buildings save energy and help reduce pollution from their inception and as the structure remains standing. This means that there are tremendous opportunities in the construc- tion and real estate industry for companies that have incor- porated sustainability practices into their business processes. For example, Deloitte’s 2022 Gen Z and Millennial Survey found that Gen Z and millen- nials are increasingly commit- ted to environmental sustain- ability and desire to engage with companies and services that prioritize sustainability. In the world of commercial real estate investment and trans- actions, this means that an increasing number of poten- tial investors and consumers alike are actively looking for ways to signal their commit- ment to decreasing their car- bon footprint while conducting business. Homebuyers are also looking for builders who use sustainable building products. Based on the desire to increase sustainability and attract sustainably minded residents, residential housing project developers can consider large sustainable projects like implementing solar panels or small-scale sustainable projects Prepare construction, real estate firm for sustainability Walé Oriola Counsel, Faegre Drinker Alexis Jackson Associate, Faegre Drinker Lindsey Folcik Associate, Faegre Drinker Please see Oriola, Page 31 Companies should engage in a process to make sense of how the organization is dealing with current sustainability scenarios as well as gain insight as to where it is headed in terms of sustainability.