NAREIM DEI vendor due diligence

Member Survey: Key takeaways. June 6

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.

To download the Member Survey on vendor DEI due diligence & selection process, click here

According to the member survey:

• 63% of managers are being asked if DEI is a consideration in the vendor selection process and due diligence of vendors. 

• As part of LP DDQs, 58% of managers said they were asked if strategies and policies were in place within their own firms to encourage MWDBE (minority, women and disabled business enterprises) engagement. 

• An increasing number of managers report receiving questions on MWDBE spend.

According to the Survey, more than half of managers (53%) collect DEI data on vendors, primarily certifications for MWDBE status. However, 47% of managers responding to the NAREIM Survey revealed they didn't collect DEI information.

Challenges:

The key challenges for those collecting DEI-data remains getting all the information required. 

Just 13% of real estate investment managers get between 75% to 100% of the data they need for their own reporting requirements; while 40% of managers said none of their top 50 vendors provided all the data requested by them.

The Member Survey, which was conducted between May 8 and June 5 and which saw 19 organizations participate representing more than 8,000 FTEs, revealed Excel was the primary tool for data collection, with some managers highlighting alternative solutions such as: 

• Docuware; SupplierGateway; Venminder; Web-based form that links to Sharepoint cloud with scorecard created post-results; Yardi Vendor Café; Visibility tool overlayed with Dunn & Bradstreet diversity data; Supplier.io to identify new vendor RFPs

Early stages

For most investment managers, DEI policies for vendors are in their infancy but some managers highlighted the early steps and actions they were taking to build supplier diversity programs, including:

• Setting baseline spending goals (direct and indirect) with MWBEs in order to develop supplier diversity strategy and program

• Insist vendor teams have at least one mid-to-senior level person who is a woman or minority. And reject providers who fail to meet criteria.

• Code of Conduct encouraging bringing MWDBE companies to compete for assignments

• Improve the tracking of MWDBE status of our current and new vendors, as well as the tracking of money that has been awarded to MWDBE firms. 

• Created local "yellow pages" of BIPOC and women-owned organizations around every property, making use of yellow pages part of property management bonus targets 

• Baseline current spend on MWDBE and look for crossover spend within assets. Future state will include tier 2 supplier base for large projects.

To download the Member Survey on vendor DEI due diligence & selection process, click here