Guidance from Daniele Horton – Cornell Real Estate Review

Cornell was honored to welcome Daniele Horton as a speaker in the Baker Program’s Distinguished Speaker Series, where she shared her experience as an entrepreneur and sustainability leader in the real estate industry.

Daniele Horton, founder and president of Verdani Partners, works with her clients to advance sustainability and resilience for large national and international real estate portfolios.  Her firm partners with organizations to implement sustainability strategies by working within the organization to make measured progress for over 4,000 managed properties.  This business model has proven to be a successful convergence between Daniele’s drive to urgently make an impact on climate change through improved building performance while meeting client goals for value creation, risk management, investor transparency, reporting, and resilience.  Verdani’s innovative approach, tools, and resources help to effectively integrate Environmental, Social, and Governance (ESG) strategies at the portfolio and asset level for their clients across over 720 million square feet of managed building space.

Daniele is an architect, LEED Fellow, and a Certified Energy Manager, with 23 years of industry expertise in architecture, corporate sustainability, and real estate.  Additionally, she volunteers her time to national sustainability committees and industry leadership groups such as the GRESB Benchmark Committee, ULI Greenprint Performance Committee, USGBC, BOMA, NAREIT, and the Women in Sustainability Leadership Awards Alumni group.

In explaining how a company like Verdani advances the building industry during her presentation, Daniele framed the need for ESG initiatives, particularly in large real estate portfolios where solutions can have an impact at scale.  Commercial properties are responsible for a large portion of global carbon emissions and need to be part of the solution as well.  Reducing the environmental footprint of buildings is not only critical to solving our climate crises, but companies with a strong ESG program are also outperforming the market financially, which is a winning strategy with environmental, economic, and social benefits.  The pandemic has offered a wake-up call to some late-comers: companies that had robust ESG programs were better prepared for COVID-19 and its fallout.  Unfortunately, in the real estate industry, innovation and adoption of carbon-neutral plans have historically fallen far behind the strides made by other industries.  While this gap currently exists, there is an opportunity for the real estate sector to have a profound impact on global environmental and sustainability challenges – and the time to act is now.

From an economic standpoint, Daniele cites key initial ESG projects that drive NOI growth and create value in existing buildings: utility data tracking, energy efficiency and LED lighting retrofits, smart irrigation systems, and a smart roof rental if solar is feasible.  Her firm also advocates for strategic data and energy management systems that allow firms to pinpoint building-specific issues while collecting and managing the portfolio-level data required by investors to understand building performance and meet reporting needs.  Implementation of these initial strategies, as well as many others, can allow firms to stay ahead of new ESG regulatory policies that are forthcoming both globally and locally.

Verdani has seen that resilience is a critical risk management strategy for success and long-term value creation in real estate.  Physical, social, and transition risks must be analyzed for companies to create a holistic risk mitigation approach.  As was seen in 2020, many firms were forced to address resilience issues mid-pandemic without an existing strategic plan in place.  Large-scale resilience has also become a global, national, and local focus, offering numerous opportunities to create value while protecting real estate assets and vulnerable populations.  Daniele cited the Manhattan Dryline as an example of regional resilience projects in at-risk coastal regions that allow for public-private partnerships and collaboration for the benefit of business and the public.

In an interesting and important aside from Verdani’s initiatives as a firm, Daniele also shared her story of entrepreneurship during the presentation.  As an immigrant from Brazil, she attended graduate school at Harvard and worked for Thomas Property Group as their head of sustainability.  However, the Great Financial Crisis left her with two infants at home and a need for a flexible work environment.  This convergence of crises offered her the opportunity and incentive to start her own purpose-driven company where she would create a performance-based and flexible work environment that allows employees to advance their careers without sacrificing their personal needs.  In her experienced opinion, the corporate world has lost so much talent “because of a lack of recognizing their (female) employees’ need for more flexibility”.  With Verdani, she has been able to build an organization that is globally minded and mission-driven, starting with a culture that puts their employees’ health and well-being first.

The pandemic has brought new challenges for the company, as well as opportunities such as hiring a chef to cook and deliver meals to employees working from home.  Verdani provided COVID wellness kits with PPE and vitamins to support employee wellness and made a special effort to keep the team connected while working remotely.  They also worked to support communities severely impacted by the pandemic and partnered with a local Navajo reservation to make and donate over 1,000 face shields to mitigate the disproportionate impact of the pandemic among Native Americans.

Daniele is proud of her perspective as a leader – utilizing compassion and empathy.  As an immigrant, she represents the proverbial American success story, arriving with no money and limited English, yet finding opportunity and building a successful business.  Her work ethic and mission have allowed Verdani to grow substantially in the decade since its founding, driven primarily by word of mouth from satisfied, recurring clients.  The continued opportunities for ESG in the real estate industry, including the global race to net zero, bode well for Daniele and her responsible corporate partners, as they look towards a more sustainable, resilient, and healthy future in the real estate industry.

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