The time has come for senior living providers to embrace ESG principles, according to Lynne Katzmann, CEO of Juniper Communities, and Kelly Worden, VP at the International WELL Building Institute. Their recent talk at the Senior Living Innovation Forum explored how ESG is more than corporate jargon; it's an essential framework that harmonizes financial objectives with ethical responsibilities.
Why it Matters:
Lynne Katzmann (Juniper Communities)
ESG and CSR Evolution: ESG serves as an advanced version of what was formerly known as Corporate Social Responsibility (CSR). Far from being a hindrance, it offers a way to both achieve financial goals and fulfill ethical obligations.
Facing Financial Realities: With many operators in the senior living sector just breaking even, the incorporation of ESG strategies offers a pathway to improve financial margins.
Tangible Measures: Actions like retrofitting with LED lights and phasing out single-use plastics are more than environmentally responsible—they also positively impact the bottom line.
Employee Retention and Living Wages: By proactively increasing minimum wages in 2020 ahead of industry norms, Juniper not only met ethical benchmarks but has also saw a rise in staff retention, enhancing both financial and social sustainability within the company.
Kelly Worden (International WELL Building Institute)
Risk Mitigation: ESG is rooted in identifying and mitigating risks, not just creating a positive impact.
Frameworks: ESG benchmarks like GRESB drive transparency between investors and real estate owners.
Financial Return: Studies show that ESG efforts in well-certified spaces lead to increased rents, tenant retention, and perceived well-being among occupants.
Several leading REITs—Sabra, Omega, LTC, CareTrust, and NHI—are pioneering collaborative ESG efforts. They’re also offering funds to help implement energy-saving solutions, setting the stage for a more sustainable and financially stable senior living industry.
The Bottom Line:
ESG shouldn't be an afterthought; it's a logical and strategic move for any operator. Not only do these measures help meet regulatory requirements and attract capital, but they also align closely with the ethical and operational goals of senior living providers.
⬇️ Katzmann and Worden's presentation is an informative watch to understand ESG's new competitive imperative.