GLOBAL - A global consortium of pension asset managers including USS, APG and PGGM has convinced the world's largest property managers to disclose detailed data on the environmental performance of their funds for the first time.
More than 340 property funds and companies responded to the call for action by the GRESB Foundation, which is backed by $1.7trn in institutional capital, to disclose information on environmental management and performance.
Research into the data shows reporting on environmental metrics has improved substantially, with frontrunners in the commercial property sector reducing their energy consumption by 3% in 2010.
The results show respondents used energy worth $5bn in 2010, or the equivalent of about 34 million tonnes in estimated carbon emissions. On average, the funds consumed 1% less energy in 2010 compared to the year before, with Europe trailing Australia and the US.
APG, which was one of the founding partners of the foundation, said the data would be used in its future investment decisions.
APG CIO Angelien Kemna added: "The data provided by the GRESB Foundation now forms an integral part of APGʼs 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."
Dutch pension fund administrator PGGM was the other founding partner of GRESB. CIO Jac Kragt said: "GRESB is the first and only ESG performance benchmark that covers both private and listed real estate, on a global scale.
"ʻSustainability pays offʼ 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."
GRESB Foundation executive director Nils Kok said the 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."
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