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Investors stimulate property sector to disclose environmental performance
Commercial property sector improves energy efficiency
Amsterdam, September 1, 2011 – At the request of a global consortium of institutional investors, 340 of the world’s largest property funds have disclosed detailed data on the environmental performance of their portfolio. A report launched today shows that reporting on environmental metrics has improved substantially. Frontrunners in the commercial property sector reduced their energy consumption by three percent in 2010.
More than 340 property funds and companies, with real estate assets worth nearly US$1 trillion, have responded to a call for action by the GRESB Foundation, which is backed by US$1.7 trillion in institutional capital, to disclose information on environmental management and performance. The results, presented at a large real estate conference (EPRA) today, show that the respondents used energy worth US$5 billion in 2010, or the equivalent of about 34 million tons in estimated carbon emissions. On average, the funds consumed one percent less energy in 2010 compared to the year before, with Europe trailing Australia and the US. Environmental leaders, dubbed “Green Stars,” reduced energy consumption by as much as three percent.
Investors push for more transparency
Dutch pension giant APG is one of the driving forces behind the initiative. Angelien Kemna, CIO, comments: “The data provided by the GRESB Foundation now forms an integral part of APG’s investment process, assisting us in the due diligence process of new real estate investments and in engaging with our existing property investments. Ultimately, this should reduce the environmental impact of APG's real estate investments and improve the financial risk-return profile of our investments. The ever louder demands from policymakers to reduce emissions will increasingly affect the way the property sector operates.”
PGGM, the leading Dutch pension fund administrator with origins in the care and welfare sector, is the other founding partner of GRESB. Jac Kragt, CIO, comments: “GRESB is the first and only ESG performance benchmark that covers both private and listed real estate, on a global scale. ‘Sustainability pays of’ is one of our investment beliefs. As a responsible investor we have integrated sustainability into our investment process. As a global investor in both private and listed real estate it is important to us and our clients to be able to benchmark ESG performance and compare between funds, companies, regions and listed and private real estate.”
Reporting on environmental metrics improved
According to Nils Kok, Executive Director of the GRESB Foundation, disclosure of environmental performance is improving rapidly in the global property sector, but there is still a long way to go. “More efficient use of energy and other resources by the real estate sector can structurally reduce energy demand. But the data shows that the most fund managers in the commercial property sector are just at the beginning of full integration of environmental management in daily operations. Reporting on energy, carbon, water and waste is still not common.”