What the US Can Learn From Europe’s ESG Practices

Anna Malhari of Veris Residential shares insights from her work on both continents.

This Women’s History Month, in celebration of female leaders in the multifamily industry, Multi-Housing News is sharing the voice of several women with stand-out achievements in their field.

In the year before the onset of the pandemic, Anna Malhari left Europe for the U.S. Now, she serves as the chief operating officer of Veris Residential—formerly known as Mack-Cali—a REIT that recently simplified its business to focus exclusively on multifamily properties. The transition included a renewed commitment to ESG best practices.

MHN asked Malhari to describe the main similarities and differences between Europe and the U.S. when it comes to sustainability and ESG practices, highlighting the pros of each of these world regions. She also shares details about Veris Residential’s commitment to reducing energy consumption and carbon emissions across its portfolio, as well as implementing sustainability initiatives and educational opportunities that have an impact on the Northeast communities that the company is active in.

You’ve started your career in Europe. What prompted your relocation to the U.S.?

Anna Malhari, COO, Veris Residential

Anna Malhari, COO, Veris Residential. Image courtesy of Veris Residential

Malhari: I began my real estate career in Prague and moved to London in 2011 to work in private equity real estate. I later joined NorthStar Realty Europe, where I worked until 2019, first within the investment and then the capital markets teams. While NorthStar had a European asset base, it was NYSE-listed, providing me with significant exposure to the U.S. REIT market.

My role as COO at Veris Residential allowed me to leverage the financial and operational experiences that I gained at NorthStar and the other firms at which I worked, and for me personally, was the ideal next step in my career—it aligned with my interests while also giving me the opportunity to challenge myself in a new role.

What similarities are there between the two continents from a sustainability standpoint? What is different?

Malhari: A similarity, and a particularly good one, is that both the U.S. and Europe have grown increasingly focused on sustainability—from the corporate as well as customer perspectives—in a variety of spaces, ranging from consumer products to the places where people live.

That said, while many U.S. companies have accelerated their efforts—with progress continuing to be made across several fronts—the U.S. real estate industry is still playing catch-up to its European counterparts, specifically with respect to acknowledging the urgency involved in incorporating sustainability into larger business frameworks and committing to tangible goals and disclosure practices.

In general, European businesses are required to fully integrate ESG reporting, including carbon emissions, into their public disclosures, enabling them to use this information more proactively to inform investment decision-making.

Recently, in a positive move, we have seen steps taken in the U.S. to ensure more transparency amongst companies and enhance the standardization of climate-related disclosures. The SEC has proposed rule changes requiring companies to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks and certain climate-related financial statement metrics, illustrating that the U.S. is taking these matters more seriously than it had previously.

What have you learned from Europe’s way of handling sustainability matters? Are those experiences applicable in the U.S.? What can Europe learn from the U.S. from this standpoint?

Malhari: The U.S. can learn a lot from its European counterparts with respect to developing ESG processes, initiatives and partnerships, as well as measurement and disclosure frameworks, without which I do not believe companies can meaningfully address ESG issues, reach ESG goals, and all in all, change our planet for the better. For example, many U.S. entities still aren’t part of crucial global ESG initiatives. In fact, Veris Residential recently became the first U.S. REIT to join Climate Group’s EV 100, joining some of our European peers.

With respect to what Europe can learn from the U.S., in my view, the U.S. is somewhat ahead of Europe as it relates to proptech and developing new technologies that can help achieve sustainability goals. U.S. companies, Veris Residential included, have been integrating technologies for some time, leveraging smart building management systems, resident apps and an online portal for maintenance requests. We have accelerated these efforts over the last 18 months, implementing even more technology to positively impact our resident experience and our environmental footprint.

For example, at one of our properties, we’re in the process of testing hydropanels that convert moisture in the air into net-zero drinking water. We have also installed smart thermostats and additional sensors across our multifamily common areas, allowing us to monitor energy consumption and manage emissions through a live dashboard.

RiverHouse 11 at Port Imperial. Image courtesy of Veris Residential

Tell us more about Veris Residential’s current portfolio. How does sustainability bode into it?

Malhari: We made the strategic decision to simplify our business and strengthen our operational platform by focusing on managing and developing top-tier multifamily properties that meet the needs of socially conscious residents and the communities we serve. It was and continues to be our goal to amplify the company’s responsibility as a corporate citizen, positively impact the environment and, hopefully, influence the rest of the real estate industry to follow suit.

Our residential portfolio currently offers the highest quality properties with the lowest average age—of six years—and commands the highest rents in the region. This quality is reflected in 25 percent of our properties being LEED-certified, as well as all wholly-owned assets being WELL Health-Safety certified.

We’re also developing new multifamily properties with our ESG commitment in mind. A key example is Haus25, which is pursuing LEED Silver certification and includes a vast range of sustainable features,  including a cogeneration system, rainwater retention and smart thermostats, both in common areas and the apartments. The building also offers prime public transit options to residents as well as 20 electric vehicle charging stations in the garage, along with 375 bike parking spaces—that’s one bike space for every two apartments.

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Is it easier to focus on sustainability matters having a portfolio that comprises only luxury assets compared to one consisting of affordable housing units? Tell us more about operating multifamily assets with a focus on sustainability.

Malhari: Cost is often cited as a barrier to implementing sustainability measures, but we believe a lot can be done within reasonable payback periods and through the utilization of the various subsidy programs available to landlords as well as developers of affordable housing.

At Veris Residential, we take pride in creating luxury buildings that emphasize sustainability, but we’re also very cognizant of the fact that sustainability shouldn’t be a privilege. We approach the communities in which we develop with the same care that we apply to the buildings themselves.

To that end and in support of the many families who live in the Jersey City, N.J., area that surrounds Haus25, as well as the building’s future residents, Veris Residential constructed a public school on the same block. Our goal in building this school was to not only address the need for more public schools in downtown Jersey City but also provide a schooling option for residents located within walking distance of their homes—cutting down on the car and bus emissions associated with transport to and from school. The school was designed to integrate with the community by providing a common-area room accessible for shared use during off-hours.

We also built a public park located at the corner of Christopher Columbus Drive and Warren Street, as well as others in Port Imperial.

Haus25 interior

Haus25. Interior rendering courtesy of Veris Residential

Property renovations and sustainability—how does this unfold at Veris’ properties?

Malhari: We don’t view sustainability as an add-on or additional cost layer that compromises returns. In fact, the opposite is true: Sustainability is a crucial lens through which we examine every aspect of our business, from development all the way through to operations. Given the relatively young age of the newly constructed properties that comprise our portfolio, renovations are rarely required. Instead, we’re more focused on making eco-conscious enhancements that take our properties to the next level.

We are always looking to partner with like-minded companies that aim to push the envelope when it comes to creating advanced sustainability measures. One example of this is our partnership with Logical Buildings to provide residents with access to GridRewards—giving residents the insights they need to reduce their energy consumption and save money.

Our commitment to sustainability is also ingrained within our company’s culture, which is becoming increasingly visible across our day-to-day operations. We encourage our employees to think from a ‘green perspective’ about every aspect of their job function, and have incorporated company-wide actions that promote sustainability, such as switching to 100 percent renewable energy and eliminating the use of single-use plastic water bottles in our corporate headquarters and across our properties. It’s the culmination of these seemingly ‘small’ efforts that we feel will lead to long-term results.

Which are presently the most valuable amenities for the residents living at your properties?

Malhari: Over the past two years, providing work-from-home amenities has been particularly crucial, along with paying attention to details that often go overlooked, but greatly impact residents’ lives. We take great pride in our offering of apartments with spacious floorplates and a variety of outdoor spaces, which many of our residents sought as they relocated from Manhattan in the wake of the pandemic.

As our buildings were designed pre-COVID-19, the existing private work pods and large-yet-segmented common areas were also a major draw for residents. We also introduced virtual fitness classes and a range of virtual events such as world wildlife night, which enabled residents to experience the happenings at The Australia Zoo. We’ve always made a concerted effort to widen our residents’ experience beyond the walls of their apartments.

RiverHouse 9 at Port Imperial

RiverHouse 9 at Port Imperial. Image courtesy of Veris Residential

How invested are your residents in the climate change battle?

Malhari: Many people want to live a more environmentally-conscious life, but they don’t know where to start—especially in an apartment setting, where many aspects of rental living feel beyond their control. We strive to make it easier for our residents to live more sustainably, and we believe this ethos resonates with them.

In addition to our aforementioned partnerships with like-minded sustainable companies, Veris Residential also curates programming with philanthropic organizations, which we find allows our residents to experience the difference they’re making firsthand. It is our hope that the more we raise awareness for our efforts, the more it will inspire people to want to live in a Veris Residential building.

What is ahead for Veris in the upcoming years from an ESG perspective?

Malhari: We are committed to ensuring that we hit every single letter of ESG, and we know that taking action to facilitate diversity and inclusion, along with our participation in the UN Global Compact, is just as important as making sure the ‘environmental’ box is ticked. With this in mind, we have launched Embrace by Veris Residential—a platform for our employees and residents that creates an open door to being more sustainable, equitable and responsible.

At the corporate level, we are rolling out social initiatives, including our DE&I Council, the Diversity & Women’s Networks, and ally groups to support them. We are not only encouraging our employees and residents to participate but also to communicate candidly with us as to how we can continue improving, to learn and grow together.

It is the end of Women’s History Month. Do you have a message for women working in the multifamily industry?

Malhari: My message to women in the industry is this: There is real value in what you bring to the table, as a diverse workforce is a strong workforce.

Every company needs to enhance its diversification of perspectives and bringing women’s voices into important discussions helps to achieve this directive. It’s important to recognize that there are quite a few women in the real estate industry, but they predominantly serve in property management and junior-level positions. There is a major deficit of women in the investment, capital markets, development and construction sides of real estate—and it’s extremely important to help correct this imbalance, rather than just saying we need more women in real estate.

I hope to inspire other women to have their voices be heard in the real estate industry because their views matter.

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