For Carl Chang, CEO and founder of Kairos Investment Management Co., being a good steward of the world is a priority. Hear from Chang about the social impact and sustainability measures the employee-owned, entrepreneurial real estate investment firm, based in Rancho Santa Margarita, California, is implementing to help both its residents as well as the environment.
MFE: Why is environmental, social, and governance (ESG) important for your firm?
Chang: ESG is important to everyone. As property owners and stewards of the assets and people we serve, each of us has a responsibility to the environment, to each other, and to the globe.
This responsibility guides Kairos’ implementation of effective ESG strategies, through which we make a difference ecologically, socially, and ethically.
Part of that implementation is a continuous focus on growing our impact. We seek out ways to execute our value-add strategies in current properties and future acquisitions through a variety of programs that focus on water and energy conservation and social interaction to elevate tenants’ quality of life.
For example, as part of our sustainability efforts in 2020, we reduced water consumption in our properties by installing low-flow showerheads and water meters.
We also invest in and support tailored social programs that upskill and support residents. And internally, we offer equal leadership opportunities for all Kairos employees to help create an inclusive and diverse workforce.
Through these and other ESG practices, Kairos upholds our responsibility to the environment, to our communities, and to the residents we serve each day.
MFE: How are you advancing your ESG initiatives this year?
Chang: The Kairos team looks at each aspect of ESG in order to ensure our approach is balanced and meaningful.
To advance our environmental impact, we are closely monitoring and exploring new technologies, many of which are making significant strides in effectively reducing carbon emissions.
That said, the key for responsible owners and operators is to achieve a balance between existing and new technologies. New tech is evolving, and, while innovative, it can sometimes bring unnecessary trials and costs. It’s important to be conscious of that balance. We work to include leading-edge technology at our properties in a manner that is fiscally sensitive toward our residents. For example, we test the efficiency of currently installed energy- and water-saving measures before completing capital expenditures earlier than needed.
Another area of focus for Kairos is our social impact. We are proud of the social programming we have tailor-made for our communities, through which we deliver much-needed resident skills and services such as tax preparation and after-school programming.
The impact of these programs is constantly being measured. We look forward to soon publishing our 2021 Annual Impact Report, which will highlight progress achieved and demonstrate the impact our initiatives have on residents and assets.
MFE: What are some stats you can share on your sustainability strides?
Chang: We continue to monitor the impact of our efforts and see both cost savings and positive environmental impact growing.
For example, we’ve successfully saved $568,273 in annual expenses and reduced energy by 1,756,880 kilowatts per hour in 2020. This was achieved through thoughtful implementations of electrical, water, and waste system improvements. We also incorporate energy-saving methods such as LED lights, programmable thermostats, and upgraded HVAC systems.
These and other sustainability initiatives contributed to a 6.5% increase in equity value among our portfolio of properties.
MFE: Tell me more about your new initiative to help residents improve their credit scores.
Chang: We are proud of this new partnership with Esusu, through which we are helping our residents build credit at no cost to them.
This is really about giving back to the communities we serve—an ethos that is ingrained into who we are as a culture.
Led by Esusu, the new program reports only positive rent payments made, which are then reported to the three main credit bureaus. Residents, in turn, can build up thin or non-existing credit profiles, which significantly improves their financial health.
We see this as an investment in our community base, and as a pillar in our commitment to longstanding affordability. In the U.S., the current inflationary environment is driving up the cost of basic daily necessities, and many of our residents can benefit from additional financial support and guidance.
Through this Esusu program, resident credit scores can grow higher the longer rent payments are reported. This opens the door for important financial milestones such as qualifying for low-interest auto or personal loans.
This focus on giving back to our residents, whether through food drives, flu clinics, or credit-building programs, is an important part of who Kairos is.
MFE: What advice do you have for other owners and operators regarding ESG?
Chang: At the end of the day, our work is about being a good steward of the world we all live in. My advice is, “don’t cut corners. You are impacting the future of your children, grandchildren, and environment.”
As responsible owners and operators of affordable housing, we must balance residents’ needs with the economic costs of implementing ESG strategies.
Part of responsible corporate governance is weighing the benefits of these programs alongside those costs and implementing a balanced strategy that supports positive long-term results for current residents and future generations.
MFE: What else is ahead for Kairos in the coming year?
Chang: We remain focused on providing much-needed affordable housing in markets that are typically underserved while carrying out effective ESG policies that align with our value-add and impact strategies.
Looking ahead, we continue to research and explore avenues that will create lasting social and environmental change while remaining trusted ambassadors to our clients.
Diversity and inclusion is another area of focus for Kairos this year. We actively promote a diverse approach and see varied perspectives as a vital part of our firm.
As of 2020, 38% of our leadership is comprised of minorities, and we look forward to driving that number higher in the years ahead.
MFE: What industry issues are keeping you up at night?
Chang: We see how inflation and supply chain issues are affecting residents’ daily lives, such as commuting to and from work, food prices, availability of basic items, and access to affordable housing. These issues are causing notable hardship on lower-income Americans, especially those in already high-priced markets like Los Angeles or New York. Over the last couple of months, gas prices across the country have skyrocketed, with the gasoline index price rising to 18.3% in March.
These issues deepen our resolve to press forward in our mission. We want to continue to grow our impact, with a focus on affordability. We’re solving for major issues every day, continuing to grow while maintaining our responsibility as stewards and ambassadors of those we serve.
