Episode #230 – Sustainability, Regulation and AI with Bob Greenlee, Part 2

(0:07) You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.

(0:40) Hey, guys, welcome back, you're listening to the second part of last week's episode? Let's jump back in. So let's talk about sustainability in a general sense, where do you think that real estate professionals are getting sustainability wrong or making mistakes in how they pursue it? Right? And it strikes me that you have this really key amount of insight into what makes this kind of project work? And what makes this kind of project just like you said, efficient? So where do you see what do you see as the common problems that we're making in real estate that we could perhaps fix? I don't know that there is, I hate to characterize that as a mistake, because I think that anything that people are doing that is driving towards sustainability is generally a good thing. It comes from the reporting. And so if in your mind, you do something that is sustainable, and then you go to a community and report that you've done something, whatever it happens to be, and don't know what you don't know, and don't know that the people to whom you have just reported, let's say, interpreted what you've said in a certain way, and they understand that you have made a claim of something green or sustainable. And then you didn't know. But it was.

(2:09) And so there's a phrase going around the Jitsi going round. That is that is what most in the industry are trying to solve for today. And that is greenwashing. And so it is it comes from some exercise or addition to or program that was in that was well intentioned. And yet it fell short because of some lack of understanding along the way. And it isn't to say that it wasn't a move towards sustainability. That was it, it was the claims made, that this is a sustainable thing. And it means x because there is some accepted definition of bear. And sort of right the mean the person moved in that direction that's paused. They articulated in a way that was inaccurate, that's a negative. And that's that. Right.

That's greenwashing. And so the better we get at understanding the sustainability in real estate, and sustainability and business, and these faculties, right, the last green Washington, there will be now the SEC is going to John, those securities exchange commission is going to jump into that and find new heavily or claims that are not accurate, that are greenwashing claims. And so now, and sometime in the second quarter, probably next year, people wouldn't be very well tuned in to being careful about, you know, what they're saying and how they're saying it, what terms of art they're using in terms of science, for that matter. But I don't say I think the any movement towards sustainability is a good move. The good news is we're in a world now where you have to know how to say what you've done, how to describe what you've done, got the right words, and that to me have to mean the same thing to that, you know, your listening audience. I'll jump from that into another part of what we're doing.

And I think it's, and that is standardization. So I mentioned the SEC, regulating rain or sustainability floodings, which they have already proposed to do last March and so or a year or so from then that will be executable. And so if I don't know how they can regulate something that isn't standard arts, so it and they're there, right when they first announced it, there's all kinds of companies that popped up and, and started marketing saying we can help you get ready for this new SEC regulated world that we're all gonna live in. And they were all doing it differently. They're all doing, you know, what, whatever their take was, that's what they came to market with. And again, so there's no standardization in the process. Even NDSU. inequities are something like 130 different scoring agencies and writing frameworks and at the you know, so and they're all over the board at the top 27 or last week in Egypt, there was one of the best outcomes of that whole

(5:00) What process was the Pol war, consolidating some of these different frameworks and, and that has started to happen among among major ones. And that's a global exercise, that standardization is something that we're working very hard at. So there as we're applying to real estate, solely, and as we're the first one among the birth, I think to do that. And we feel like there's a great opportunity to really control the data, control the education control the message, we're talking to universities around the country, and they're actually willing to form a consortium, which is highly unusual, normally, they're very proprietary group that have their own kind of discarded reason. And in this case, what they would not want to have happen is have UC Berkeley, which is the leading sustainability School of the country come up with something that they don't know about.

And they get not left behind by by long, but they get left behind by a period of time. So they wanted, they're willing to form this consortium, which is actually very cool around sustainability, and ESG. So all of that, hopefully, will read to standardization of ESG data in the application real estate. And you know, and further the, to your question, now 20 minutes ago, to how the how the sustainability can be achieved in a standardized way. So since the SEC, you know, so we're recording this towards the end of 2022. Right? So we have about another quarter and a half, or whatever it is, right until that sort of SEC regulation, theoretically come into play.

But you know, you mentioned this when we first talked and I, I wrote it down and highlighted it, which is you can't regulate something that isn't standardized, or at least it seems very difficult to do. So. Is there any sense in the industry of what they are going to land on? Or if they're going to, you know, I'm not exactly sure how it works. And they just come out and say, here's what it means. And here's the official definition, I know that you guys are sort of pushing in that direction, but like, what is the mechanism by which that actually gets decided? Or is that not clear? I suspect it boils down like everything else in life to money. And not to be cynical, actually, I think it's a positive way of describing that. So one of the first groups that we've associated with the Mortgage Bankers Association, the mortgage industry standards and measurement organization, Ms. Bo has is now moving towards regulating or requiring reading mortgages. And so they have accepted all of our E data elements.

There are 4000 S, data elements that are under review. As we speak, they have not addressed G yet. Again, if you're looking for governance instead of government, that's a hard, hard one to kind of get your head around. But so Mortgage Bankers Association through mezzmo is leading the effort to standardize green mortgages, again, with the data included in green one. And with that that amendment will sell upstream right to the government sponsored enterprises GSEs, Fannie Mae's and Freddie Mac's and so forth, Ginnie Mae. And so and then when doing the value, for example, sells about a billion dollars every month.

(8:32) mortgage bonds more mortgage backed securities and could sell far is what they told us. So now as you go from the Mortgage Bankers Association and the individual backs to the GSEs, then to the mortgage backed securities, now you're on Wall Street. Right. So now you now you come to the SEC, back door, front door, for that matter. And, and so that, I think is how that process on bold. So if you have Akademia on one side, which we're working very hard on, and mortgage banking on the other covered a pretty wide swath of the fabric of, of America in many respects. Right. So I think that's, that is potentially That at least is our kind of two pronged approach to doing it. Is there a right way or a better way? You know, I don't know. But that's that's what we've chosen to do. And it seems like it's headed in the right direction. Some, I'm curious, it strikes me that you particularly are someone who aligns with and works with many different certain parts of the economy, right. Like you have your work with MIT, you know, you've done academic work, in terms of you know, doing the research and exploring AI, you've got your direct connections to the real estate industry in terms of your clients. You've got, you know, sort of the federal regulators you've got, like zip mismo for example, or companies or go

(10:00) groups that are representing different parts of the economy, you have all these different stakeholders that you have to kind of interpolate between. Right. I'm curious, has that been difficult? I think a lot of people assume that there are these walls between, for example, academia and the government and, you know, industry and that those people don't tend to communicate particularly well. I'm curious what your experience has been, as it hasn't been difficult as had been easier than expected. And what do you think the the, do you think that that is necessary in order to achieve the kind of thing that you are trying to achieve? That's a terrific question in ESG, is the interconnectivity of all things. It kind of at the end of the day, it really is that, which is to say that everybody is on a sustainability journey. Is one fairly finite and a limited way of describing that ESG though mean, environmental, social, that's government now, you know, it truly is. And everything there is to think about making it measurable, is really what it boils down to, to make it meaningful or material. materiality is one of the biggest kind of benchmarks of of ESG. And, and one of the problems also with ESG, is that what's material to you may not be material to me, and so you want your ESG score to reflect what is material view?

(11:40) And we get these, these disconnects across 130 different frameworks, right, that's, that that is a problem. In the end, it's a bit like having it's still a move towards sustainability, that's still a positive, there's still a lot of dysfunction in that, but but on balance, right, I mean, that's a positive direction to be going. So does it take all aspects of that? I think so. Because you don't want this to be the tree hugger group, and therefore, you know, they can be easily dismissed, or you don't want it to be Wall Street, it can be easily dismissed, right? You want it to resonate with with people. And so on some level, it probably does. And again, the standardization is not just simply standardizing data, it's standardizing the language to some extent, so at least we all agree on what we're talking about.

And if we can do that, that can then come back to AI with the natural language processing, you know, to be able to hear those words and put them in the same place. You know, so I'm not sure that answered your question, necessarily, but no, but my take? Yeah, I think I think it's really interesting, right? Because I have always kind of viewed, you know, sort of academia, industry business, or, you know, governance or whatever, to be almost like different cultures and have different sort of linguistic, you know, mechanisms and sort of structures, and it can be hard to go between those. And it strikes me that you guys have done that really well. And that's part of what makes what you do so interesting and impactful. Right? It's you have these different pieces from all these different worlds. You know, one of the things I wrote down when we we met before we we recorded the show, we got to know each other a little bit. One of the things I wrote down that you said, you're I think we were talking about core values are sort of the values behind the business. And you said that like in terms of ether SGX, our objective is to save the planet, which is a pretty big objection to have right.

(13:50) Let's find motivated seller leads online but don't know where to start. Download our FREE motivated seller keyword report today, AdWords nerds have spent over $5 million this year researching the most profitable keywords for finding motivated seller leads. And you can grab these exact keywords when you download our report at www dot AdWords nerds.com/keywords. And curious, you could take this question wherever you like. It's a broad one. How do you think about having a mission driven business? Or do you think of yourself as having a mission driven business and how does that affect the decisions you make day in and day out? I call it purpose driven. It's kinda it's the same idea. I I don't know that we're mission critical, for example. So I'm drawing a little bit of a differentiate. Then I look right. I'm at a point in my life where I want to be transformation. I feel like I have accumulated a network and a knowledge base and and ability to do what we're doing

(15:00) so it doesn't mean that I know all about AI or I know, right? I mean, but I know who does. And we are having a great time doing it. But it is Bonn, it is important. It does need to happen. You know, we haven't talked at all about climate change or climate risk. But it's part of it. It goes to Larry Fink's letter in 2018, right when he talked about it, and I was talking about it the other day to somebody that no matter what you think about climate change, you have to acknowledge climate risk. So if somebody else is going to bait in their feelings about climate change, right to whatever economic decisions that they're making, again, you doesn't matter what you think about it, the risk is real. And so you have to address that. So that to me, is it's just one it's not even a very good example. But it is an example of, you know, there's there's some reality to this, there's some urgency to this, I have grandchildren, you know, I want to get it right for them. And that's a great driver, my brother Leinart, and my brother in law and I were talking the other day, at my daughter's wedding.

(16:11) Without the didn't know that that's awesome. is huge. I had to have this year actually, pilot do shoot me now. But it was, but we were talking about I said, you know, every night, I'd find myself, you know, want to bed earlier and earlier. And at three o'clock, I wake up, and I've just solved whatever I was noodling in our and he said, yeah, that's, that's Python. Pi two is 314, right? Point, one, four, whatever it is. So the 314 I'm up and solving, you know, whatever your issues are. And how cool is, you know, I mean, I jack to get going every day, it starts with,

(16:52) you know, I mentioned you before we came on air, the very cool thing that I'm working on this morning is just kind of one thing after the other. And it's because of the interconnectivity of all these different things. It's new and different. But they all relate. And that's it's just, it's easy to pull. And you don't ask me a question that I won't give you six different pieces of the answer. Right, partly because that is sort of delayed uploads.

(17:16) Yeah, I, I think it's really fascinating, right? Because there are certain people I have on the show, they're always very interesting. I love everyone that I have on the show. But there are people where their passion for what they do is very palpable. And I think with you, it is absolutely the case, right, you can tell how important it is to you and how deep of a field. It is. And I think that just really comes across, you know, we're coming up a time and I want to keep you too late. I did want to ask you this, because I think you are definitely one of the deeper thinkers I've ever had on the show, I find your viewpoint really fascinating. So I'm gonna ask this question, which is, give me something that you have read that has had a massive impact on your life that isn't directly related to what you do. So it could be a book, it could be a mentor, whatever, you can take it wherever you like. But what's been that kind of like intellectual spark really changed the way you saw the world, but wasn't necessarily directly about, for example, ESG, or somebody like that.

(18:21) In the book recommendations is what this comes down to, I wanted all your reading and science feel about. So all by light, I have always read things like the power of positive thinking or something like that. Today, when I get up in the morning, I listened to a broadcast by god named Darren Hardy. And he's not talking about, he's just talking about how do you how do you define success for yourself? And what would it look like? And what do you have to do to get it? And it's not what, you know, it's not success defined by anybody else, or positivity defined by anybody else? Or it? It's there's, you know, how do I want to live my life? And it's just it's, I've listened to 50% of them, I guess, I mean, some I don't care about some don't art materials on whatever. But I find that and just the I'm a very positive person, generally. And did I have to read the get there? Probably not, but are but this is this is of the latest stop. This has been and it's bite size, right? That's also important. I love to read. I've been a gracious reader, but in terms of kind of rule what's insights in my life today, I have to say, and it's not a plug, but I may try to turn into one. If I could solve this, I want to get paid more.

(19:43) But that's, you know, how do you what does it take for me to put together the life that I want to lead? So that's that's really what it's all about. Well, thank you for that. That is certainly awesome. And I will make sure to look it up and link to it in the show notes as well. So for people who are in Interested in ESG? Interested in what you're doing? What are the best ways for them to either get started to reach out to you? Why do they just go to ether esg.net? And kind of contact you like what's what, what would you give people as kind of a next step, if they want to start incorporating this into their real estate investing or their development or whatever they're doing? Well, I think that's, that's a fine way to do it. And we're very interested and collaboration. We're another thing that I did this morning was I've started and found on LinkedIn that somebody I didn't know though I knew his company.

I don't even know what happened since then. But he had announced that he was working on a university collaboration with the appraisal process. And so we connected now to say we have value, which relates to, you know, kind of everything, every score that we present, there is a value correlation to that. Let's connect on, we think the definition of highest and best use, for example, it's time to revamp that a little bit. And that was part of our message didn't end today. So E three SG dotnet. Yeah, please come and share with your thoughts and how to collaborate. Again, this connects to so many different things. You know, Which way would you like to take? Is there something about your property that you'd like to explore? Let's talk about that. Is there a bond that I've mentioned that we're starting a bond? Is there an investment you'd like to make? It goes to lots of different places, and all of it can be started or through the yttria? St. Web? Yeah.

So II three SG dotnet. I mentioned it before, that's the website, you can go there and check out Bob and everything he's doing. And I will say, Bob, I just I find what you guys are doing so fascinating and interesting. And I think it's very rare to find something that really shifts the way that you view an industry or the world that also positively impacts the finances of a project and helps to make the world a better place. I mean, it literally is this really transformative idea that you guys have. So again, I want to thank you so much for coming on the show. Bob Greenlee thank you so much, man. This was awesome. Ben Baird, it was a pleasure. That is it. That's it for our interview this week. I hope you enjoyed it. I did. I learned a ton from Bob. And I bet you did too. Hey, by the way, all of my past episodes, you can find it AdWords nerds.com/podcast. I'd love for you to go over there. Check out the blog. We've got all our past episodes, transcripts, all the show notes and more. And of course, if you could leave me a review wherever you got this podcast, I would really appreciate it. It helps other people find the show. That's gonna be it for this week's episode. I will see you next week. Thank you so much. And cheers

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