APG, MN join real estate sustainability engagement network

Dutch pension funds ABP, PME and PMT, and asset managers APG, Wellington Management, MN, Robeco and Neuberger Berman have joined the Global Real Estate Engagement Network (GREEN) with the aim of turning it into “a Climate Action 100+ for real estate investors”.

The new joiners are expected to increase the impetus of the initiative, which was formally launched last year at the IPE Real Estate Global Conference & Awards in Copenhagen, with a mission to accelerate sustainability in the real estate sector and reduce climate risks.

Last year, the six founding pension funds backing the intitiative – Detailhandel, Philips, Nedlloyd, TNO, Achmea and Schilders – counted €70bn of assets between them, but the new additions take that number to more than €2trn.

Vincent van Bijleveld, director of GREEN and consultancy Finance Ideas, said APG had been involved in the initiative since the start and assisted in approaching other potential members before formally joining it together with other large international investors.

The involvement of APG and also MN, the asset manager of pension funds PMT and PME, was instrumental in catalysing the initiative beyond the Netherlands, according to Van Bijleveld. He told IPE Real Assets: “When APG and MN signalled they were ready to commit, this was a sign for other large international to investors to also join.”

Van Bijleveld wants GREEN, which is to complement existing initiatives such as real assets sustainability benchmark GRESB, to become “a kind of Climate Action 100+ for real estate investors”. Climate Action 100+ is an initiative by asset managers and asset owners for joint engagement with listed companies on climate change-related topics.

The engagement efforts for GREEN are expected to be led mainly by the larger members. “The smaller pension funds will contribute financially, but we do not necessarily expect an active contribution from them,” said Van Bijleveld.

The €32bn retail pension fund Detailhandel, the largest of the six founding members, will have an intermediary position. “They will represent the smaller pension funds in GREEN’s steering committee, which will decide on the specific engagement priorities,” said Van Bijleveld.

Patrick Kanters, managing director at APG, said: “We strongly believe that shared investor expectations and joint engagements will get the real estate market moving towards Paris alignment.

“GREEN has the potential to grow into an effective platform for like-minded investors to meet and leverage shared objectives, and we encourage like-minded investors to join this global network and together work on improved sustainability in the real estate sector.”

Brian Jones, managing director and portfolio manager at Neuberger Berman, highlighted the importance of stepping up efforts to improve the environmental performance of real estate assets. “REITs with credible environmental programmes can lower regulatory risks, attract high-quality tenants and generate better returns for investors,” he said.

“The collective investor advocacy of the GREEN network is a powerful way to encourage real estate companies to accelerate their emissions reductions and reach carbon net zero well ahead of 2050.”