Schroder Real Estate has outlined its net-zero carbon plan for its property portfolio as the company seeks to achieve targets in line with the United Nations’ Sustainable Development Goals.

The £17.4bn (€20.1bn) real estate fund manager, which became a founding signatory to the Net Zero Asset Managers Initiative in December 2020, has published its pathway to hitting net zero by 2050.

Schroders, which invests both directly via real estate funds and indirectly within its capital partners division, said the published pathway “aims to set and meet targets required as part of the Paris Agreement treaty on climate change to limit global warming to 1.5ºC and achieve net-zero carbon emissions”.

It said interim net-zero milestones – expected to be scheduled for 2025 and 2030 – are being established to ensure assets are brought in line with the level of carbon reduction required to meet the Paris Agreement.

The focus for direct real estate investments will be on reducing energy demand, increasing energy efficiency, and identifying opportunities for renewable energy generation, with “consideration given to offsetting any remaining carbon”.

The plan is to ensure global low carbon regulatory requirements are met and considerations of climate risk and resilience are included in the pathway.

“This will span the full spectrum of a building’s lifecycle, including day-to-day operational carbon emissions, as well as those created during refurbishment and development.”

For indirect investments, Schroders expects to engage with the managers of externally managed funds and joint-venture partners to ensure they also adapt their approaches to meet net-zero carbon targets.

Sophie van Oosterom, the global head of real estate at Schroders, said: “ESG and specifically carbon responsibility is a significant and growing priority for our investors. It is important for us to provide transparency to all our stakeholders about our strategy and actions. Demonstrating the carbon profile and progress of our investments is core to this.

“The benefits of a net-zero carbon approach are, of course, wider than the positive outcomes for our stakeholders. They are vital in supporting the transition to a low-carbon society and, ultimately, a more sustainable future for everyone to share.”

Charlotte Jacques, the head of sustainability and impact investment at Schroder Real Estate, said: “We believe our responsibility to our clients includes protecting them from the impacts of financial and non-financial risks. We also recognise our broader responsibilities to society and the planet. We, therefore, need to address the climate priority by reducing our emissions and transitioning to net zero.

“Schroder Real Estate’s commitment to net-zero carbon by 2050 is a natural next step in our energy and carbon programme.

“Our activities range across the building lifecycle. We seek to continually improve the sustainability credentials of our investments through the active management of our assets, and have been working to reduce the energy consumption and greenhouse-gas emissions of our landlord-controlled operations for over five years.”

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