E-Book, Englisch, 288 Seiten, E-Book
Reihe: Haufe Fachbuch
Wieduwilt Implementing ESG into Real Estate Contracts
1. Auflage 2025
ISBN: 978-3-648-18204-8
Verlag: Haufe
Format: EPUB
Kopierschutz: 6 - ePub Watermark
A guide and toolkit for practitioners from a European perspective
E-Book, Englisch, 288 Seiten, E-Book
Reihe: Haufe Fachbuch
ISBN: 978-3-648-18204-8
Verlag: Haufe
Format: EPUB
Kopierschutz: 6 - ePub Watermark
Sabine Wieduwilt Sabine Wieduwilt is a Real Estate partner in the Frankfurt office of the global law firm Dentons. She specializes in acquisition and disposition, property development and asset management of commercially used properties. Sabine Wieduwilt is Co-Head of Dentons' Europe & UK Real Estate ESG Steering Committee and assists on the implementation of ESG for Real Estate in Europe.
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Preface
Sabine Wieduwilt
This is not a book about whether ESG is good or evil; it’s not about the politics or the carbon or GHG emissions attributed to the real estate sector. Nor is it about the extent to which solid surfacing or child labour is still being used, or everything that could go wrong. It’s certainly not about blaming and shaming. It is about how we can make ESG work – how it should or could be done. Above all, it’s about offering a toolkit.
In the past five years much has been written about ESG, including about ESG in real estate – seemingly more than was written in the previous thousand, at least in the real estate industry. Maybe this is due to the growth of social media commentary, maybe not. Sustainability / CSR / ESG is not a new topic. However, the talk of Sustainability / CSR / ESG has spread across the globe much like the hurricanes and other ever-more common extreme weather events seen almost daily in the news, and not entirely unrelated to the way we have been treating the planet and its inhabitants, human or otherwise.
At the same time, in times of crisis, we question the sense of engaging in this debate, when there seem to be more pressing needs. Nevertheless, even in these ‹interesting times’, sustainability / CSR / ESG has a place in our thinking and, far from being detrimental to business, can be a profitable endeavour. Furthermore, can we really go back to old ways of thinking? In Europe, during the last economic crisis, we heard similar arguments: we need to focus on the problems of today; we can’t afford to invest in our future. Where does such myopia lead? And if we can’t go backwards, what can we do? Perhaps the answer is to move forward, but in smaller steps?
The role of corporations in being part of both the problem and the solution of the climate crisis and sustainability has never been more pronounced. Pressure from activist investors and financial institutions is holding companies increasingly accountable for their environmental, social and governance, or ESG, performance.1
This comes from the introductory statement to »The ESG and sustainability landscape« at the IBA conference on 29 March 2023. No need to say:
ESG as a concept has taken on an increasingly significant role within the wider business community. One way in which companies can embrace sustainable business practices is through incorporating ESG factors into commercial contracts. As such, there has been a proliferation of ESG-specific requirements in commercial contracts over the last ten years, including by reference to increasing legislation and regulation in this area and voluntary standards. These clauses are incorporated into many different types of contracts such as supply contracts, transactional documents, public sector contracts, employment agreements, shipping agreements, and insurance agreements.2
So what do I want to do with this book Implementing ESG into Real Estate Contracts. A guide and toolkit for practitioners?
I have been thinking about this book for quite some time. What I saw being developed were publications on laws and regulations and ESG standards, guidance on different contract types in real estate, led by initiatives in the industry. There has been some great thought leadership. From my point of view, the most prominent seemed to be the standard-setting on green leases, but that was not the only type of contract being looked into more deeply through the sector and practice lens.3
| There are many individual publications on the application of individual problems, on individual types of contracts, such as green leases. However, there is little that brings the topics together, the common denominator, the structures of implementation in the individual contract types and the specific application in individual cases. For market participants in the real estate industry, the biggest challenge seems to be to join the dots of different laws, regulations and standards to create a single cohesive picture. When you go into the detail of implementing ESG into contracts, it isn’t that easy. Of course, there’s the legal bit, then the commercial and industry-specific bit; then there’s the bit about implementation in the company and with your contract partners. For the legal bit we tend to look at one part but ignore the other – in the sense of »yeah, this might have a connection to data protection«. Same with »what about antitrust?« and then we sometimes leave that part hanging somewhere, put it off until later. Of course, in this book we have also left some parts hanging somewhere to be addressed later. |
For the »contract implementation« bit – How do you implement contracts? There’s the idea, the concept, the content, the draft, the negotiations, the redraft, the finalizing, the signing. Then it may still be just a piece of paper, or perhaps a ream, or nowadays a huge piece of data, but it still might be a piece of paper that gets lost in a drawer or in the infinity of the electronic universe. What types of contracts or clauses have a chance or a higher likelihood of being used or lived between contract partners or even within a company or companies and its or their dealings? Is there a chronology or procedure that describes how contracts are implemented within an organisation?
Despite the fact that there is no one common ESG picture for the real estate industry, not even for a single property, what I wanted to achieve with this book was to combine different perspectives on ESG and real estate and the drafting of contracts. I have had the opportunity to regularly exchange and collaborate with several participants in the real estate industry and, since 2023, also with the wider Dentons Europe Real Estate ESG Task Force, comprising experts from 15 countries – which keeps the challenge and discussion going – we see that we have common challenges and face similar issues – even where we don’t have the same underlying national laws, the issues we need to consider in terms of real estate and ESG are similar.
»And, when you want something, all the universe conspires in helping you to achieve it.«4 For this book, there are some stories to tell that can be drawn from the discussions with other industry sectors or practices. However, what is noticeable is that we’ve got things we know about ESG that are more relevant to the industry. And I’m very lucky that I have encountered many persons that have inspired me along my career – such as our inspirational real estate leaders across Europe, including the UK, and across various countries, our trendsetting guru when it comes to ESG, Birgit Spießhofer, my friend Anja Kleinke, who inspired me to join the group of authors to write the book ESG and Real Estate in 2021, as well as those persons who, when I asked if they would join me in putting this together reacted with an instantaneous »yes« – Bettina Noé from Haufe, my very dear colleagues and friends who are in our great Dentons Europe Real Estate ESG Task Force, starting with Sonja Taghiyeva, further colleagues from the firm, such as Melanie Bressel, my great assistant for ten years now5, as well as great industry professionals whom I have encountered as role models for their expertise as well as challengers of standard ways of thinking.?And, last but not least, my dear husband and children, who have challenged the standard ways of thinking, without trying to be missionaries about it. My children gave me the idea for the game you can download as part of the online content to this book, which leaves winning partly to chance and partly to your knowledge of ESG and real estate6. This book was written in a similar way as we’ve been having talks on ESG in the market and within the firm: it’s an act of listening, brainstorming, structuring, writing what comes to mind, reviewing what we’ve done, trying things out, starting all over again. We’re not quite at the point where the market has found its solutions, and we just have to copy-paste for the different situations whatever the standards tell us to do.
The book provides an overview of the content and systematics of implementing ESG issues and ESG regulation in real estate contracts. First of all, the starting points of ESG and ESG regulation for contract design are described in general terms. Subsequently, the implementation for individual contract types and asset classes is presented.
In chapter #1, we combine the framework of thinking ESG, of thinking ESG and real estate and contract design and drafting in general, with a focus on some aspects we might encounter in real estate.
In chapter #2, we dive a bit deeper into specifics that might be relevant for certain contract types in real estate.
In chapter #3, we look at different usage types of real estate.
In what order should you read this book? Any way you like. A good friend told me she reads the book ESG and Real Estate like this: »Think of a solution you need, open the book and check if the answer will find you on the page you’re opening.«
We want to stay true to the word »toolkit« – we want to give an impression of a topic that we deem relevant, then add notes on what might be relevant for contracts. This is...
