REAL ESTATE – The United Nations has called for real estate investors to consider the environment when they make portfolio decisions.
The UN’s Environment Programme Finance Initiative has launched a working group on responsible property investment, saying "leading investors worldwide must embed environmental thinking in the heart of their property investment portfolios if the financial services sector is to play a pivotal role in halting climate change".
It said the success of the UN Principles for Responsible Investment (PRI), now signed by institutions representing more than $6trn in assets, has shown the growing commitment by institutional investors and their financial partners to achieve better long-term investment returns through more sustainable investment activity.
The new United Nations Environmental Programme Finance Initiative ("UNEP FI") Property Working Group, was launched at the headquarters of Caisse des dépôts in Paris.
It was born out of the PRI research process and is constituted by institutional investors and fund managers striving to encourage sustainability in mainstream property finance.
"Investors’ responsibility cannot be limited to their assets in large listed companies. The environmental and social stakes in real estate must be a subject of investors’ benchmarking to prepare property responsible investment practices," said Jean-Pierre Sicard, Head of Sustainable Development at Caisse des Dépôts and co-chair of the PWG.
A recent UK report estimated that, through their construction, use and demolition, built structures are the source for nearly 50% of carbon emissions. By taking sustainability factors into account and by embracing environmental, social and governance issues in property investment considerations, the PWG believes that the finance sector can improve the sustainable management of new and existing buildings.
This can be done by significantly reducing their carbon emissions, and by increasing their energy and water efficiency.