A group of investors and investment managers, including Danish pension fund ATP, Dutch pension asset managers APG, Bouwinvest and PGGM, CBRE Investment Management, Healthcare of Ontario Pension Plan (HOOPP), Dutch fiduciary manager MN, Savills Investment Management, Schroders and Urban Partners, have teamed up to address the challenges arising from inconsistent and often incomparable ESG data within the real estate industry.
The group, which will operate as a new initiative of the Global Real Estate Engagement Network (GREEN), aims to address barriers hindering effective climate risk management by establishing a “limited set of financially material metrics and definitions” for potential global adoption.
The group members are a mix of new and current members of GREEN, as well as individuals from Leaders of the Urban Future (LOTUF), which recently partnered with GREEN.
Derk Welling, senior portfolio manager responsible investments real estate at APG, said: “As a long-term real estate investor, we recognise the importance of reliable, comparable, and financially material sustainability data. Without standardised metrics, effectively managing climate risks and making responsible investment decisions remains a challenge.
“At the same time, the growing sustainability reporting burden in the real estate sector diverts valuable resources away from value creation. That is why we fully support this joint effort within GREEN. Only through collaboration can we enhance transparency, reduce the reporting burden and contribute to a more sustainable and resilient real estate sector.”
Peter Hebin Bruun, head of ESG at ATP Real Estate, said: “ATP previously participated in the LOTUF initiative, which outlined a common understanding of what good ESG performance looks like for real estate across the globe.
“Such an understanding is key to further strengthening the agenda’s role in adding insights and value to our portfolios. GREEN has the potential to be a strong platform for further enhancing the common understanding and sharing of best practices on target setting and tracking of progress as well as overcoming the data challenges that many real estate investors face today.”
Sabrina Boshuizen, ESG manager, international investments at Bouwinvest, said: “At Bouwinvest, we believe that long-term financial outperformance is driven by ESG integration… Standardised, high-quality ESG data is essential to compare portfolios, steer capital effectively, and increase transparency across the real estate sector.
“As an investor that has been actively engaged from an early stage in shaping, standardising and improving ESG data practices, our participation in the systemic workstream is a natural continuation of our commitment in raising the bar. We believe that collective action is essential for the industry to accelerate decarbonisation while generating sustainable financial value for investors.”
Robbie Epsom, head of EMEA sustainability at CBRE Investment Management, said: “Achieving true progress in decarbonising the real estate sector hinges on aligning sustainability metrics, particularly those legislative metrics used by investors, lenders, and valuers. Initiatives like GREEN and the Systemic Workstream are vital in fostering this crucial industry alignment.
“We must work with industry bodies such as INREV and ULI and build upon existing frameworks, such as the IIGCC coordinated ARESI initiative, which has already made significant strides in addressing ambiguity in existing climate transition risk metrics in the European market. By ensuring these efforts are considered and integrated, we can streamline our collective approach and accelerate the transition to a more resilient and future-proofed real estate market.”
Eric Plesman, senior managing director and head of global real estate at HOOPP, said: “At HOOPP, we are acutely focused on the connection between emissions performance, climate risk, and asset value. Having previously engaged in the LOTUF initiative, we strongly believe that additional industry engagement and collective action are required to underpin the low-carbon real estate market.
“We believe GREEN will provide the platform to continue this engagement and organise like-minded investors around a common goal: decarbonising global real estate portfolios while driving strong risk-adjusted returns.”
Peter van den Tol, senior advisor impact investing and responsible investing in real assets at MN, said: “At MN, sustainability is a core part of our strategy to build resilient real estate portfolios that benefit both people and the planet. Managing climate risks and making informed decisions starts with consistent and transparent sustainability data. This data is crucial for aligning our portfolios with climate goals while ensuring long-term value creation.
“We believe that collaboration across the industry is key to accelerating the decarbonisation of the real estate sector. That’s why MN is committed to working with other leading investors and investment managers to harmonise climate metrics, reduce reporting burdens, and foster transparency.”
Andrea Palmer, responsible investment lead at PGGM: “At PGGM, sustainability is central to our strategy for building real estate portfolios that contribute positively to both society and the environment. Effectively managing climate risks and making sound investment decisions starts with access to reliable and transparent climate risk data.
“These insights allow us to align our investments with global climate ambitions while delivering long-term value for our clients. We believe that industry-wide collaboration is essential to accelerating the transition to a low-carbon real estate sector.”
Emily Hamilton, chief sustainability officer at Savills Investment Management, said: “Savills Investment Management is focused on decarbonising its real estate portfolio on behalf of our clients. Our portfolio includes low-carbon assets that have shown strong demand from tenants, and we have seen a positive trend in liquidity for these assets, particularly in terms of quicker leasing and short void periods.
“We strongly believe that industry collaboration and engagement is essential if the real estate industry is going to decarbonise real estate with the pace and scale that is required.”
Tom Walker, co-head of global listed real assets at Schroders, said: “We recognise the critical challenges the real estate investment industry faces in obtaining comparable, high-quality, and financially material climate data. We’re proud to be part of this important initiative, collaborating with leading industry players to develop standardised metrics.
“This collective effort is essential for effectively managing climate risks, enhancing transparency, and driving sustainable value creation across global real estate portfolios.”
Mikkel Bülow-Lehnsby, executive chairman and co-founder of Urban Partners, said: “Quantifying the effect climate change poses on our investments is something Urban Partners sees as paramount to both short and long-term success. We need to become much better at better measuring the effects, which in turn, requires us to move away from proxies or non-standardised metrics, towards a set of commonly understood metrics that works across the value chain.
“Whether it is carbon risk exposure from a regulatory point of view or sourcing edge, tenant demand or financing upside from a value pool point of view. We are therefore very pleased to see the efforts of LOTUF being carried forward by GREEN. We need each other to materially nudge our ecosystem with one collective voice to change our sector for the better.”
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