A new “green lease” strategy is one of the efforts highlighted in CareTrust REIT’s third annual corporate sustainability report, released Wednesday.
The strategy includes adding new environmental, social and governance-specific requirements in lease agreements when amending or modifying existing lease relationships.
“In 2022, we prepared ‘green’ lease language for our form master lease. In 2023, to date, such language has been included in master leases entered into with seven new operators,” the San Clemente, CA-based real estate investment trust said.
Additionally last year, the REIT added data tracking for energy and water for an additional 50 properties, with tracking services at 100 properties.
And CareTrust has added incentives for operators to engage in ESG practices. Between September 2022 and September 2023, the REIT tallied $567,304 in environmental improvements.
Five operators received financial incentives for their environmental projects. For example, a CareTrust-owned skilled nursing facility in Bethany, CO, was able to receive an incentive to cover 100% of the premium cost to install three high-efficiency, Energy Star-rated rooftop heating, ventilation and air conditioning units for a total of $5,208.
“We are gratified to have pioneered an ESG program tailored for triple-net landlords that is unique, innovative and geared towards risk reduction while maximizing improvements for tenants aligned with their principles and objectives,” President and CEO Dave Sedgwick said. “We continuously look for new ways to promote sustainable practices among our tenants.”
The report outlines advancements in several key ESG initiatives over a short period of time, according to the REIT.
“This report showcases our advancements in several key initiatives over a short period of time,” Sedgwick said in a statement. “This report, among many initiatives, shows our alignment with the Global Reporting Initiative Standards and answers the question of how a landlord, with unique triple-net lease constraints, can make meaningful progress across an array of corporate responsibilities.”
In 2020, CareTrust hired Conservice ESG to conduct an assessment and develop a three-year ESG roadmap that aligned with the REIT’s core values and goals. The REIT’s 2021 corporate sustainability report showed that the company executed on its stated plans from its inaugural report in 2020.
In 2022, CareTrust conducted a portfolio-wide physical climate risk assessment, integrated its ESG checklist into the acquisition process and funded several environmental improvement projects through its tenant incentive program.
