ESG and Sustainability in Multifamily: A New Era

Multifamily Housing

ESG (environmental, social, and governance) is one of 2025’s hottest topics in property management. By prioritizing ESG principles, property managers can improve their buildings’ sustainability and create environments for their tenants that support healthier and happier lifestyles. ESG initiatives can also bring notable financial benefits.

As a result, developers, owners, and operators should make ESG improvements to their multifamily buildings today that will benefit their businesses far into the future. By doing so, they’ll lower their properties' operating expenses, help residents connect with their neighbors, and run their buildings in a truly equitable way.

Understanding ESG

In many cases, ESG is discussed as a single concept. However, breaking it down into individual components can help you understand this topic as a whole. 

Here’s what you should know about the core elements of ESG:

• Environmental. This element is all about a building’s impact on the world around it. Water conservation, energy efficiency, emissions reduction, and waste management are all crucial parts of the “E” in “ESG.”
• Social. This element deals with how properties affect individual residents and communities. Everything from tenant well-being to community involvement falls into this category.
• Governance. Finally, this element focuses on using transparent and ethical policies/procedures in property management.

How ESG Helps Multifamily Property Managers

Prioritizing ESG isn’t just the right thing to do—it can also deliver concrete advantages for property managers. When you take ESG practices seriously, you can:

Keep Tenants Satisfied

According to a Deloitte survey, 55% of Gen Z workers and 54% of Millennial job-seekers research a potential employer’s environmental policies before accepting job offers. With that in mind, it’s not hard to see how that passion for sustainability extends to housing. It’s also easy to understand how making your properties more eco-friendly could help them appeal to members of these generations.

The social and governance aspects of ESG contribute to tenant happiness as well. When properties are fairly managed and offer a strong sense of community, individuals and families will be more likely to enjoy their experiences there (and less likely to look for alternative housing).

Enjoy Better Revenue/Market Value

Since sustainable multifamily buildings offer higher levels of tenant satisfaction, you can raise your rates in buildings that have received ESG improvements. In fact, research published by Cushman & Wakefield in 2021 found that average market sales prices per square foot were 21.4% higher for LEED (Leadership in Energy and Environmental Design)-certified buildings than buildings without this certification over the past three years. At the same time, increased efficiency seen in these buildings will translate to reduced utility expenses, reducing overhead and allowing you to invest your resources more strategically. 

Avoid Unexpected Problems

A strong commitment to ESG can offset many risks and reputational problems that can lead to high vacancy rates. And when your buildings are well-governed, you’ll reduce your chances of health and safety-related issues (and the lawsuits that can come with them).

Comply With Regulations

Today’s ESG best practices aren’t necessarily set in stone, but when you take a proactive approach to ESG implementation, you’ll be able to adapt to future changes with minimal pain. Of course, adopting ESG principles will also help you follow existing regulations and market more effectively to a broader base of potential renters.

Following ESG Principles in Your Properties

If you haven’t already considered ESG and sustainability in your multifamily buildings, there’s no better time to start than now. The following tips can help you align with ESG principles while managing your properties more efficiently. 

Environmental

To mitigate the environmental impact of your buildings, you can:

• Start using solar energy. Instead of getting all your energy from the grid, consider installing solar panels to offset your power needs.
• Add smart lighting to apartments. LED-based smart lights are much more efficient than incandescent light bulbs. These lighting solutions can even turn themselves off when they aren’t needed.
• Install smart thermostats. Smart thermostats are another form of smart technology that can improve your building’s energy efficiency. These thermostats are able to learn tenants’ temperature preferences and keep utility costs for unused apartments to a minimum.
• Introduce new water fixtures. Low-flow faucets, showerheads, and toilets will all help reduce water usage in your multifamily building. The best products save water by providing usage options such as multiple flushing options, so your tenants won’t have to compromise on their preferred experience.
• Rethink your approach to waste. To reduce waste in your multifamily building, try installing waste compactors, scheduling regular waste audits, and promoting recycling and composting programs.
• Prioritize sustainability in new buildings. Unfortunately, there’s only so much you can do to make older buildings eco-friendly. But that’s not the case for new properties, which should be designed to follow sustainable practices from day one.
• Focus on green building certifications. By attaining LEED certification or other green building certifications for your multifamily buildings, you can ensure they’re as efficient and sustainable as possible.

Social

Property managers can make life better for their tenants by:

• Holding community events. Social get-togethers and volunteer activities aren’t just a way for residents of your multifamily building to pass the time. These events can help your tenants feel like they’re part of a community and develop better relationships with each other.
• Keeping people connected with software. If your property management software offers resident portal functionality, your tenants will always know what’s happening around your building. The best portals also make it easy to handle payments and maintenance requests by reducing reliance on paperwork and enabling project tracking through your property management software (PMS). 
• Introducing new outdoor spaces. Green spaces such as community gardens can help your residents enjoy nature. At the same time, these areas will add visual appeal to your building.
• Adopting inclusive practices. Keeping diversity in mind while creating policies for your multifamily building will help you take an essential step toward providing a truly welcoming community.

Governance

To enhance your apartment building in terms of governance, focus on:

• Simplify resident communication. In addition to their social benefits, online resident portals make it easy for tenants to contact you with concerns and questions.
• Keeping rent under control. By offering affordable rates that consider pricing for other local apartments, you’ll keep tenants happy and your building competitive.
• Complying with relevant standards. Adhering to legal and regulatory standards for tenant screening and other aspects of property management will go a long way toward helping you avoid legal battles down the line.
• Monitoring your ESG initiative. By using technology to measure and report the performance of your ESG improvements, you’ll know your initiative is delivering the results you’re looking for.

Support Your ESG Program With a Property Management System

When you focus on ESG and sustainability, you’ll know your multifamily building is ready for the future. Between that and the concrete benefits these initiatives deliver today, ESG implementation should be a high priority for all property managers.

Your property management software sits at the center of ESG efforts and allows you to coordinate communication and capitalize on the data and cost-saving benefits these enhancements deliver. A best-in-class PMS like ExactEstate integrates these strategies into your overall workflow with features like reliable tenant screening, work order management assistance, and real-time data on properties. To get a property management system you can count on, schedule a demo of ExactEstate today.