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Do Words Match Deeds? Exploring the Link Between ESG Discourse and Performance of Real Estate Companies

Author

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  • Siqi Huang
  • Anupam Nanda
  • Eero Valtonen

Abstract

Research on ESG issues in real estate has indicated a complex link between sustainable real estate and financial success. A particular challenge in exploring the link comes from the lack of robust measures of various aspects of real estate sustainability, partly due to the limited availability of granular data. Presently, the assessment of firm-level real estate sustainability mainly uses ESG or CSR ratings from rating agencies, which rely heavily on self-disclosed ESG data from real estate companies. These third-party ESG/CSR ratings come with several limitations, including overlooking the potential impact of disclosure language patterns and sentiment bias on ESG ratings. In this study, we focus on the words around ESG actions and promises from official disclosures and credible news sources and offer a comprehensive evaluation of real estate companies' sustainability performance. We focus on 65 US REITs over a 15-year time period. Our preliminary analysis, based on computational linguistic techniques, highlights various salient features of what companies disclose in the public domain.

Suggested Citation

  • Siqi Huang & Anupam Nanda & Eero Valtonen, 2024. "Do Words Match Deeds? Exploring the Link Between ESG Discourse and Performance of Real Estate Companies," ERES eres2024-076, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2024-076
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    Keywords

    ESG Discourse; Real Estate Sustainability;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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