Investors push for disclosure of environmental performance

More than 340 property funds and companies, with real estate assets worth nearly $1 trl, have responded to a call for action by the GRESB Foundation to disclose information on environmental management and performance of their portfolio.

The results, presented at the EPRA conference, show that the respondents used $5 bn-worth of energy in 2010, or the equivalent of about 34 million tonnes in estimated carbon emissions. On average, the funds consumed 1% less energy in 2010 compared to the year before, with Europe trailing Australia and the US.

Environmental leaders, dubbed 'Green Stars,' reduced energy consumption by as much as 3%.

Dutch pension giant APG is one of the driving forces behind the initiative. 'The data provided by the GRESB Foundation now forms an integral part of APG's investment process, assisting us in the due diligence process of new real estate investments and in engaging with our existing property investments,' said CIO Angelien Kemna. 'Ultimately, this should reduce the environmental impact of APG's real estate investments and improve the financial risk-return profile of our investments. The ever louder demands from policymakers to reduce emissions will increasingly affect the way the property sector operates.'

According to Nils Kok, executive director of the GRESB Foundation, disclosure of environmental performance is improving rapidly in the global property sector, but there is still a long way to go. 'Data shows that most fund managers in the commercial property sector are just at the beginning of full integration of environmental management in daily operations. Reporting on energy, carbon, water and waste is still not common.'

The Global Real Estate Sustainability Benchmark (GRESB) Foundation is an initiative of some of the world's largest institutional investors, representing $1.7 trl in assets under management, leading academics and industry bodies.