Commercial Real Estate Taking Notice of ESG Enforcement — Gravel2Gavel Construction & Real Estate Law Blog — June 3, 2022

Pillsbury Litigation partner and former federal prosecutor Kimberly Jaimez was featured in the article, SEC Ready To Clamp Down On ESG Investment Claims, offering insight on the increased awareness of environmental, social and governance (ESG) concerns in commercial real estate. With ESG now being viewed by most CRE investors as a top priority in business operations, a new source of risk has resulted: increased SEC scrutiny over overinflated or otherwise false ESG claims. This could mean CRE investment funds, REITs, and other real estate entities will have to increase compliance vetting on marketing and communications. Jaimez presented the following comments:

  • “The SEC’s crackdown could potentially affect access to capital as funds begin more rigorous vetting of companies in their ‘impact portfolios’ in an effort to avoid greenwashing allegations.”
  • “Impact investments are typically marketed as ones that create social and environmental benefits. Thus, real estate companies that market development projects as ‘transformative development,’ ‘urban renewal,’ ‘redevelopment’ or ‘sustainable’ real estate should be ready to provide evidence for such statements,” she said. “They should be ready to explain the social and/or environmental benefits generated by their development projects if they want to ensure their inclusion in such impact portfolios going forward.”

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