EUROPE - Pension funds are increasingly concerned with sustainability issues in real estate investments but doing nothing about it, according to a report commissioned by the European Social Investment Forum (Eurosif).

Eurosif executive director Matt Christensen told IPE Real Estate interest from consumers, tenants and the media had "critical mass" of concern for green building and suggested momentum over real estate’s green credentials had emerged over the last two years in the same way as concerns for equities five years ago.

"Real estate is a slower area than equities. But it’s catching up and moving ahead. There’s a buzz around it," said Christensen.

However, the Eurosif-commissioned report –a joint venture with Dutch Sustainability Research – admitted: "There appears to be a gap between the awareness phase and actual concrete actions."

In the US, sustainability has gained clout from massive investments from pension funds such as CalPERS but in Europe, the absence of a single agreed environmental building standard – or even agreed best practice – has proved an obstacle to similar investment, said Christensen.

"Choose one of them. Investors in the UK could choose the standard most commonly used in the UK – and genericise," he added.

Christensen suggested the EU might try to establish a standard "that’s not too aggressive" with cross-market appeal.

Short of regulation – also a notable feature of the US market – Eurosif claims there is a business case for green building.

"Many developers will wait for regulation. Others will see that they can use it to create competitive advantage," continued Christensen.