ESG
UDR ESG
Our Commitment to Environmental, Social, and Governance Responsibilities
At UDR, we understand the impact our business can have on the environment and upon our stakeholders. Our ESG efforts assist us in identifying and managing our sustainability risks and opportunities. Our ESG improvements are designed to improve operational quality, improve associate and resident retention, and reduce our impact on the environment.
The 2021 ESG Report describes our work in environmental sustainability, our commitment to community and relationships, and our dedication to sound corporate governance.
Download the Full ReportChairman and Chief Executive Officer Message - Thomas W. Toomey
2020 was a challenging but also highly rewarding year. UDR, like many businesses, faced obstacles unlike anything we have encountered over our nearly 50-year history. I am proud of how our associates responded. Their supreme efforts helped us to fend off the worst that COVID could throw at us, and their compassion helped our residents through personal difficulties as cities shut down and social distancing became the norm. Throughout COVID, our resilient business model – which is founded on highly efficient operations, welcoming customer service, accretive capital allocation, and being a strong corporate citizen – did not falter. It was gratifying to see firsthand our Company not only survive but also thrive in many ways during the year. The pandemic may have de-emphasized ESG pursuits at some companies, but not at UDR. Whereas in years past E and G typically garnered the lion’s share of our focus, S came to the forefront during 2020. At the beginning of COVID, we made a pledge to take care of all members of the “UDR family” to the best of our ability. Perhaps the most satisfying outcome of 2020 was our success in making good on this. I sincerely hope you find our 2021 ESG Report insightful and appreciate the significant work all UDR associates contributed to make our ESG successes a reality.
Our 2021 ESG Report emphasizes the Company’s ESG achievements over the past year and provides insights into what we are doing to stay ahead of the “ESG curve” over the years to come. We remain committed to transparent and consistent ESG reporting, utilizing the Global Reporting Initiative ("GRI"), the Sustainability Accounting Standards Board ("SASB"), and the Task Force on Climate Related Financial Disclosures ("TCFD") standards to structure our report, and have a number of key areas to highlight for 2020.
We exceeded our 2025 greenhouse gas (“GHG”) emissions and energy reduction targets five years ahead of schedule. Our GHG emissions decreased by 21% compared to our baseline year of 2015. This reduction was in part due to an 18% decline in our common area energy utilization since 2015. Our accelerated achievement of these goals was made possible by accretive capital investments in solar energy production, building management system installations, and a variety of other energy conservation technologies. Our work is far from over on these fronts, as evidenced by our new E reduction targets outlined in this report, but we have made great progress to date.
While COVID demanded much of our attention in 2020, UDR has been actively addressing a variety of other non-pandemic-related S initiatives as well for years.
Pandemic-Related S Initiatives/Successes:
- Communication: We maintained clear and consistent communication with our associates during COVID regarding the most-up-to-date health and safety guidelines. Regular “All Associate Calls” were held to address how our business was performing and what help our associates needed as well as to provide an open platform for associates to ask questions or express concerns.
- Health and Safety: Housing is a necessity. Much like other frontline workers, many of our associates did not have the luxury to work from home. As such, we invested approximately $3.2 million in personal protective equipment, intensified our community cleaning procedures, allowed work from home where applicable and provided more flexible work schedules for those who could not, moved property tours and resident interactions to a 100% virtual, touchless environment, and more.
- Financial Support: We supported our associates through one-time bonuses, additional COVID-related paid-time-off to treat a COVID illness or take care of a family member with COVID, offered multiple vacation time buyouts so days accrued would not go to waste, and paid for all COVID-related testing.
- Mental Health Support: We enhanced our mental health benefits through our UDR Wellness Initiative and actively promoted our 24/7 mental health hotline for those who needed additional mental health support.
- Flexible: In addition to consistent communication and the extensive health and safety measures we implemented at our communities, UDR has actively worked with residents that were and continue to be negatively impacted by COVID. We have offered accommodative rent payback plans and aggressively helped our residents in need apply for governmental rental assistance. Through the end of August 2021, we have received $14.3 million in rental assistance to over 1,400 of our 54,667 residential homes.
- Community: Our residents still wanted to feel a sense of community in a world where six feet of separation and masks became the norm. We moved community events like Quarantine Bingo to the virtual world and enforced stringent social distancing protocols for in-person events like community ice-cream parties. Establishing a sense of community has always been important to UDR, and I am proud that our teams in the field could come through for our residents in this way.
- Diversity, Equity, and Inclusion ("DEI"): UDR has conducted an extensive, company-wide DEI overview during the past year and a half from which we expect to derive actionable recommendations on how we can further diversify our workforce and level the playing field for all associates. Along with focus groups, surveys, and individual interviews conducted by our independent consultant, as part of our diversity and inclusion training, we include unconscious bias training for all associates. This is a solid first step, one of many we plan to take in the years to come.
- Giving Back: During 2020, UDR gave back to the communities in which we operate. We provided computers to a school with predominantly lower-income students to help make virtual learning possible, organized food drives and blood donations, and provided a variety of care packages to frontline workers who live at our communities. These are just a small sample of what we have done, but they speak to the compassion and generosity our associates show daily throughout the year.
- Culture Statement: We live our culture statement each day. In 2020, we updated the statement to ensure the goals and expectations that make UDR a socially conscious corporate citizen were clear. Additionally, we created an Associate Culture website that prospective and current associates can access to better understand our cultural cornerstones at a high level.
For G of ESG, we remain committed to our three primary principles of strong corporate governance – dialogue, transparency, and responsiveness. We recognize that strong corporate governance is critical to our long-term success and ability to create opportunities and value for all stakeholders. In 2020, we formerly adopted the “Rooney Rule” for Board refreshment after informally utilizing the “rule” during past searches.
Over the 12 months preceding this report, the Board of Director’s continued its refreshment efforts with the addition of Diane M. Morefield in 2020 and Kevin C. Nickelberry in 2021. With these continued efforts, the Board has now added six new independent directors in the last seven years with diverse and additive skill sets. In addition, the most recent two additions have further enhanced the gender and ethnic diversity of the board to forty percent (40%).
UDR’s commitment to operating in a sustainable manner across all facets of our business is clear. It is built into our Company ethos and is a driving force for how we approach our day-to-day tasks. Our ongoing investment in ESG initiatives, the setting of ESG improvement goals, and the transparent reporting of our progress remain critical to our long-term success as these pay financial, environmental, and social dividends that benefit all stakeholders.
I am proud of the ESG work our Company and associates have accomplished, as well as our sustainability leadership within the industry. Our business and the ESG landscape will continue to evolve, but our commitment to being a strong corporate citizen will remain steadfast. I am excited for our future.
Thomas W. Toomey Chairman and Chief Executive Officer
Awards
Newsweek America's Most Responsible Companies 2022 GRESB Global and Regional Sector Leader 2021 Smart Buildings Innovator of the Year for Second Consecutive Year NAA 2020 Excellence in Technology & Innovation Award Smart Buildings Innovator of the Year Award NAA 2020 Silver Sustainable Living Innovation Award
Committing to set a science-based target through the Science Based Target initiative ("SBTi")
Installed over 1.7 million kilowatt hours of solar generation capacity since 2019
GRESB Real Estate Global and Regional Sector Leader
9 UN Sustainable Development Goals ("SDGs") selected for alignment
Achieved an “A” rating on our GRESB Public Disclosure for the third consecutive year.
Residents sign our Green Lease Addendum
Board of Directors are women
12% increase in resident loyalty scores
Associates
Interactions with our shareholders in 2020 and early 2021, representing 84% of common stock outstanding
of Common Area Electric Consumption procured from Renewable Energy Sources
of resident interactions completed online
UDR ESG Methodology
Materiality Assessment
We believe consistent reviews of our ESG processes and initiatives ensure that they (1) remain aligned with and enhance our strategic goals, (2) address the evolving needs and expectations of our stakeholders, and (3) continue to provide useful and actionable ESG metrics. Ongoing reviews are critical to our long-term success as a Company, the results and total shareholder return ("TSR") we generate, our cultural evolution, and our residents’ experience.
Stakeholder feedback on our GHG Emissions, overall sustainability practices, DEI outreach, resident / associate health and safety, combined with changes in the regulatory environment resulted in an upward shift in these sustainable topics in our 2020 materiality matrix. Our consistent reviews of ESG processes and initiatives combined with stakeholder feedback contribute to the updates to our materiality matrix. We have set more rigorous targets for some of our E goals and are in the process of setting a science-based target for greenhouse gas mitigation and adaptation through the SBTi. We are continuously broadening how we can utilize new technologies across our portfolio with additional onsite solar and wind generation, as well as submetering and the ability to harness real time data at more of our properties through Smart Building and SmartHome tech through our Next Generation Operating Platform. We have created a long term plan to obtain additional green building certifications at our existing communities. In addition, we have added new ESG goals around diversity, equity, and inclusion, associate health and wellbeing, and stakeholder engagement around ESG.
ESG Governance
In 2020, our Governance Committee Charter was revised to formally assign the Governance Committee oversight of the Company’s disclosures of ESG matters, including any ESG report that is published. In addition, sustainability has been incorporated into UDR’s overall risk assessments reviewed at every Board meeting, and the Board has performed in-depth reviews of various ESG topics like climate change risk, DEI initiatives, and more throughout the years.
- Progress updates toward long-term environmental goals.
- Reviews of SASB / TCFD / GRI standards for annual changes / updates / recommendations.
- Assessments of risk posed to our portfolio by climate change, including physical, transitional, and regulatory risks.
- Feedback from stakeholders (shareholders, associates, and residents).
UDR’s ESG Committee, made up of senior officers at the Company, sets Company-wide ESG targets, goals, and strategy. Chairman and CEO, Tom Toomey, steers the Committee which approves the ESG strategy, while UDR’s Senior Vice President of Corporate Services and Innovation, Matt Cozad, is responsible for the implementation and monitoring of progress towards meeting ESG targets and goals and the integrity of the Company’s overall ESG reporting processes. As part of our on-going commitment to our stakeholders, we expanded the Company’s ESG control environment to include additional internal and external assurance testing of the accuracy and completeness of significant ESG metrics, including emissions, energy usage, water usage, waste diversion, and S-related pay, diversity, training, and gender metrics included in the report and included in the 2021 GRESB survey.
United Nations Sustainable Development Goals
UDR’s ESG goals align with several of the United Nations Sustainable Development Goals. The UN SDGs purpose was to adopt a long-term, comprehensive strategy to address the world’s greatest challenges related to global sustainable development, including quality education, life below water, zero hunger, no poverty, climate action, etc. These integrated goals, provide a global perspective for our ambitions to continuously improve our corporate citizenship and create long-term value for our stakeholders. We have aligned with 9 of the 17 UN SDGs that we believe are the most relevant to our industry and towards which we can make material progress.
ESG Measurement and Reporting
We have established ambitious yet realistic ESG goals and targets to operate more sustainably and create long-term value for our stakeholders in the coming years. For each goal and target, we have developed a framework to report our progress to the ESG Committee, our Board of Directors, and our Stakeholders. During 2020, each of our goals and targets was reviewed to confirm alignment with the findings of our materiality assessment. Trends that emerged during COVID impacted some of our environmental goals in ways that may not be sustainable going forward as COVID restrictions ease, such as YOY reductions in Scope 1 and 2 GHG emissions and common area energy consumption or increases in whole building water consumption. We will continue to evaluate and expect to update some of our goals in 2021 to reflect science-based targets.
