Asset-level vendor DEI data collection is really hard; tier your strategy, lean on brokers
NAREIM DEI virtual meeting: Vendor due diligence & DEI reporting, June 6
It’s best to tier your strategy for collecting vendor DEI metrics – because the process is exceptionally overwhelming and largely manual.
NAREIM members shared real-time pain points as they look to collect data on vendor and service provider DEI metrics in the wake of increased LP questions. Key advice from the virtual meeting held June 6 was to tier types of vendors, starting with vendors providing your own corporate services, followed by portfolio/fund-level vendors and finally asset-level vendors.
As part of the virtual meeting, NAREIM also shared a member survey on vendor DEI due diligence & reporting.
The results? Almost two-thirds of real estate investment managers are being asked by investors and consultants if DEI (diversity, equity and inclusion) is a consideration when choosing vendors and service providers.
Yet almost half of managers aren’t collecting data on the issue yet, according to the latest NAREIM Member Survey. Indeed, of the 63% of real estate investment managers collecting DEI-related information about vendors and service providers, just 13% get all the data they need to fulfil their own LP DDQs.
During the virtual discussion, members shared advice on what information was impactful and challenging to collect.
Diversity certifications or not?
Members agreed that investment managers need to look beyond MWDBE (minority, women, disabled/disadvantaged business enterprise) certifications to find true diversity metrics. There are more than 16 MWDBE certifications, and the hurdles to achieve certification are significant meaning many smaller firms don’t apply to be certified.
When it comes to asset-level vendors, members agreed it was a “heavy lift”, with one manager revealing they were aggregating 11,000 contracts and conducting vendor surveys to gather the information they need to answer LP DDQs.
Members stressed though vendor DEI due diligence wasn’t a “side of the desk” job and requires someone to focus on this. It’s hard to do on the side of your desk.”
Asset level data typically requires managers surveying vendors individually to understand diversity within ownership and the DEI initiatives taking place within the vendor firm.
Indeed, for some larger firms it can prove difficult to access information, with managers forced to rely on publicly available data on websites instead.
As a result of the DEI data collection, one member said a goal would be to require property managers to have one diverse firm on the slate for new vendor shortlists.
Among the services, tools and technology members were using to collect vendor DEI data, the following were advised: Contact local black chambers of commerce, reach out to the National Minority Supplier Development Council, look into Billion Dollar Roundtable and talk to your brokers for help. JLL and CBRE are both helping managers with asset-level DEI data and also have networks of diverse suppliers.
On the technology front, members were using: Revelio Labs; Supplier.io; SupplierGateway among others.
To download the virtual meeting attendee list, click here.