Six organisations, including the United Nations, have jointly published a guide to investing in property that can be used by professional investors to better manage ESG risk and cut associated greenhouse gas emissions.
Sustainable Real Estate Investment. Implementing the 2015 Paris Climate Agreement – An action framework sets out how investors can approach the asset class; organisations involved in the development of the guide include the UNEP Finance Initiative, PRI, Rics, IIGCC (representing European investor groups), INCR Ceres (ditto for North America), and IGCC (Australasia).
To download a copy of the guide visit: http://www.unepfi.org/work-streams/property/SustainableREI/
Representatives of these organisations have commented on the developments:
Tatiana Bosteels, head of responsible property investments at Hermes Investment Management and chair of UNEP FI’s property working group and IIGCC’s property work programme said: “Buildings consume around 40% of the world’s energy and contribute up to 30% of its annual greenhouse gas emissions, so the people who manage global real estate assets – valued at around $50trn – have a vital role to play if humanity is to curb emissions in line with the goals set out in the Paris Agreement. With this framework now available, real estate investors have no reason to delay taking concrete steps to transform their routine business practice so that it addresses the climate challenge.”
Eric Usher, acting head of UNEP FI – a unique global partnership between UNEP and the financial sector – said: “Not least after COP, governments must now find new and cost-effective ways to curb pollution. Public private collaboration will be essential to finance a low-carbon economy, including the buildings sector. This new framework will allow real estate investors to play their role in making this transition happen.
Stephanie Pfeifer, CEO of IIGCC – a European network of 120 institutional investors with €13trn of assets under management – said: “As part of wider efforts to implement the Paris Agreement, every property asset owner, investor and stakeholder concerned to preserve asset values and returns over the longer term will need to actively manage ESG and climate-related risks as a routine component of their business thinking, practices and management processes.”
Martin Brühl, RICS president, said: “This framework is important for investors and for our qualified professionals. It is a user-friendly map of tools and guidance that can support us with the actual implementation of ESG and climate risk strategies. Professional standards are a means to fulfil ESG goals and to mitigate climate change risk. The standards RICS promotes provide a basis for reliable and consistent energy metrics and emissions monitoring. They also make it easier to value sustainable buildings and, ultimately, enhance market transparency as well as de-risk investments.”
Fiona Reynolds, managing director of the Principles for Responsible Investment – an international network of investors representing over $59trn in assets under management – said: “This timely and well-designed framework will become a recommended guide that we will encourage PRI signatories who invest in or manage real estate to use as a routine part of their work to meet their reporting obligations to the PRI.”
Mindy Lubber, president, Ceres, INCR – a North American network of more than 110 institutional investors managing $13trn in assets – said: “To make the Paris Agreement real and prevent dangerous climate change, investors must find ways to channel at least $1 trillion per year into low-carbon and clean-energy activities worldwide. This new framework is a valuable tool for portfolio managers looking to boost property investments that will help drive the low-carbon energy transition.”
Emma Herd, CEO IGCC (Australia), said: “The property sector has a crucial role to play in reducing global emissions and increasing community resilience to climate impacts. Developing the investment tools to adapt existing property stock, along with ensuring new developments perform far better than current infrastructure, will help asset owners or managers secure investment returns and tackle climate change.”