An integrated approach to ESG

As a multifamily real estate investment company investing in apartment buildings across the US, FPA Multifamily believes it can leverage its operations, supply chain and business model to create a positive impact. The firm’s Managing Partner, Greg Fowler (pictured), explains how ESG initiatives integrate with workplace culture, impact objectives and financial considerations.

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As a multifamily real estate investment company investing in apartment buildings across the US, FPA Multifamily believes it can leverage its operations, supply chain and business model to create a positive impact. The firm’s Managing Partner, Greg Fowler, explains how ESG initiatives integrate with workplace culture, impact objectives and financial considerations.

How do you promote diversity and inclusion within your firm?

Our team is a microcosm of our residential client base – of the 1,060 total head count at year end, 42% are women and 51% are from multicultural backgrounds. Our diversity is supported by The Fowler Family Scholarship Program, FPA’s Real Estate and Student Housing Internships, and Future Leadership Programs that are funded through the G.A. Fowler Family Foundation. The foundation’s commitment to education focuses on recruiting HBCU students, first generation college students and students of underserved backgrounds.

We have a diversity and inclusion policy and mandatory training for all team members, supplemented with classes on recognising and reacting to micro-aggression, understanding and overcoming racial bias. and empowering female leaders, among others.

How do you and your clients balance measurable ESG outcomes with financial returns?

FPA purchases existing assets – the best way for us to generate meaningful environmental outcomes is by focusing on efficiency retrofits and energy saving initiatives. Pursuing green financing allows us to receive preferential pricing on these efforts while keeping our portfolio sustainable.

Our team works with reputable third party experts in pre-acquisition due diligence and through our ownership to identify potential cost and energy saving opportunities. When feasible, these are worked into the business plan for investment.

We also use data analytics to measure performance. FPA’s sustainability strategy has earned 15 Energy Star Awards in the past year, and cumulatively saved over 51 millon KW hours and 1 billion gallons of water.

Additionally, as a member of ‘1% for the Planet’, FPA has committed to donating 1% of its annual property management revenues, which have added up to over $1.2m for fighting hunger, sequestering carbon, and improving water quality, among other crucial causes.

What role does technology play?

FPA has been using tech and data analytics for five years, leveraging the ENERGY STAR Portfolio Manager system to understand, track and measure energy and water consumption across our portfolio.

We use cloud-based ESG software to produce investment-grade sustainability reports and monitor impact – the tool notifies us of improvement opportunities. This is supplemented by third-party data verification services that help us enrich public disclosures, pinpoint best practices, and demonstrate progress for our stakeholders.

How do managers measure and report the ESG performance of portfolio companies?

Starting at pre-acquisiton, FPA  implements trackers using various tools and technology for completion timelines, ROI calculations, milestones, costs and ESG benefits, as well as quarterly and annual performance reporting.

FPA also participates in the GRESB Real Estate Assessment, the global ESG benchmark for the real estate sector, which covers 1,500 property companies, trusts, funds and developers – together representing $5.7tn in assets under management.

How are ESG considerations integrated in your own decision-making and that of portfolio companies?

FPA’s six-person investment committee, which includes members at the Managing Partner level to the C-suite, deliberates and votes on every asset under purchase consideration. ESG factors that would influence future financial performance are a key part of these conversations.

We also have an ESG committee with people from all seniority levels spanning the organisation, which meets quarterly and communicates proactively to promote sustainable business practices. The ESG Director spearheads this committee and reports straight to me as FPA’s founder.

Greg Fowler, Managing Partner and Founder, FPA Multifamily, LLC – Greg is responsible for the overall direction of the firm and leads the acquisitions and investor relations teams. Greg has been the general partner on over 700 real estate projects valued in excess of $18 Billion USD and FPA has raised 11 discretionary real estate funds and acquired over 130,000 apartment units. Prior to forming FPA, he was Senior Marketing Director for Iliff Thorn & Company. Greg holds a finance degree from San Diego State University and a professional degree in real estate development from the University of California, San Diego. He currently serves on the boards of the Campanile Foundation, USD Real Estate School, National Multifamily Housing Council and the Investment Committee of the Santa Barbara Museum of Art. He is a member of the Urban Land Institute, Pension Real Estate Association (PREA) and the Olympic Club.