The pendulum will swing back to more ESG scrutiny, says RioCan GC Jennifer Suess

She says investor interest will not have disappeared as economy improves

The pendulum will swing back to more ESG scrutiny, says RioCan GC Jennifer Suess

In the competitive world of real estate investment trusts (REITs), few companies stand out as much as RioCan – one of Canada’s largest REITs. With a portfolio that is predominantly retail-based and extends into office and residential spaces, RioCan's strategic positioning in major markets and transit-oriented locations defines its success.

Sitting at the legal helm is Jennifer Suess, senior vice-president, general counsel, ESG & corporate secretary for the company. As the general counsel, Suess finds herself constantly balancing the strategic growth of the organization with the compliance and regulatory demands of being a public entity in Canada. And, with RioCan's considerable market cap of $6 billion and over 600 employees, it’s no small feat.

"Ensuring that the retail component of the REIT’s strategy is focused on curating and maintaining the right collection of tenants is very important," Suess says. “[As is] how we treat those tenants and their experiences during the unique moments Canadians have faced in the past several years, including a pandemic and high interest rate environment. [This customized approach is] critical and a part of the ethos of the culture of every team at RioCan, including those I oversee.”

A significant aspect of Suess's role involves spearheading ESG initiatives across the organization, a domain gaining increasing traction among investors. This includes organizing innovative outreaches and hosting events, such as the first-ever ESG-focused Investor Day, which was held at RioCan's flagship development, 'The Well', in downtown Toronto in the Fall of 2023.

"Effectively embedding ESG across an organization as complex as RioCan has been successful only because we have the attention not just of the board of trustees, which has a dedicated ESG committee at the board level, but also within management," Suess says. “There are several committees dedicated to everything that touches ESG across the REIT, from operational excellence to embedding specific climate-based initiatives and specific budgets across all units of the business. It’s a cross-functional collaboration that’s enhanced through our sustainability council, which is comprised of representatives from every area of the organization.”

Under Suess's stewardship, every RioCan employee incorporates an ESG-specific objective into their annual performance goals, reflecting the company's underlying commitment to these values. Executive-level compensation, too, is directly linked to the development and execution of ESG strategies, a testament to the company's dedication to this cause.

But Suess is hardly alone in her enthusiasm for all things ESG. According to research from Bloomberg, 85 percent of investors are set to increase their ESG investments in the next five years. What’s more, 84 percent of C-suite executives believe that ESG is the key to a more robust corporate strategy. However, with rules and regulations around ESG reporting continuing to evolve, it’s incumbent on GCs like Suess to really understand the nitty gritty of the legalese, not least understanding ESG’s complex link to the real estate market.

“I find it really amazing,” says Suess. “The intersectionality of ESG with the real estate sector allows you to grow the real estate business in ways you previously wouldn't have been able to do. One of the things that we all try to keep in mind here is that each of the initiatives has to somehow translate into revenue and community enhancement. It isn't simply a question of trying to do good – you need to do good for all of your stakeholders with each of these initiatives.”

For example, Suess mentions the partnership with Enwave at 'The Well,' which led to an innovative and environmentally sustainable deep-water heating and cooling system that services not just the RioCan development but the entire surrounding community. Creative solutions like these contribute to reduced energy consumption and greenhouse gas emissions.

“Many of our other new developments will reflect similar technologies,” says Suess. “Which really have been at the forefront of our strategy, because ESG is so critical – not just to us, but also to our investors. [However], when you're in a depressed economy like we are currently in, there's a tendency for some organizations to take their eye off of ESG because companies are worried about very real things such as making their debt payments and managing through what is anticipated by many to be a financially bumpy 2024.

“We know, however, that when the pendulum swings back to a more stable economic environment, the scrutiny that investors bring to ESG will not have disappeared – and we will be expected to have kept pace with all of the developments that are coming down the pipeline. In 2024, you need to make sure that you're doing that at the same time.”

This commitment to ethical practices all year long doesn’t end with ESG. As Suess explains, diversity, equity and inclusion (DEI) is part and parcel of their overall culture and strategy. And, since 2020, RioCan has ramped up its efforts in this domain, starting with the formation of the DEI council.

"We've initiated partnerships with many of the academic programs across the city and the country to ensure that people can begin their careers at RioCan,” she says. “And that we're attracting people from all walks of life – which results in better decision making and better representation in the boardroom.”

Particularly close to Suess's heart is the Women's Initiative Network, a project she initiated in 2017. Aimed at enhancing representation and opportunities for women in a historically male-dominated industry, the initiative has led to significant changes.

"By encouraging transparency and conversation around what true opportunity looks like for women, particularly when you enter some of those tender moments in your career, we've really been able to enhance our retention, particularly of women.”

In fact, under Suess’s guidance, RioCan has seen a remarkable increase in the number of women in senior positions and on RioCan's board, something she plans to continue into 2024 and beyond.

“Now, over 40 percent of senior positions at RioCan are held by women,” she says. “40 percent of our board is female. These are things that truly resonate with me and result in better economic and professional opportunities for women, industry-wide.”

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