M&G Real Estate, the property investment arm of Prudential in the UK and Europe, has pledged to reduce net carbon emissions to zero across its assets under management by 2050 through a series of key measures.
In recognition that real estate accounts for an estimated 40% of global carbon emissions, M&G said that it had become widely accepted that to mitigate the worst effects of climate change, companies must limit global warming to below two degrees.
For real estate to meet these objectives, all new buildings must operate at net zero carbon from 2030 and 100% of buildings must operate at net zero by 2050, according to the firm's findings.
M&G is currently developing fund specific, net zero pathways which will help the company understand where portfolios are on the journey to net zero and the measures that will need to be taken at an asset level to achieve the goal. This will be used to define net zero strategies which will be embedded in its decision-making and acquisition process.
Tony Brown, head of M&G Real Estate, said: 'Despite the impact caused by the ongoing Covid-19 pandemic, the need to reduce carbon emissions remains a crucial priority for us.
'We are already embracing the need to reposition our business across M&G, with a commitment to achieving net zero across our assets under management by 2050 and cutting our own corporate emissions to zero by 2030.'
M&G Real Estate has already driven a 25% reduction in energy intensity compared to its 2012/13 baseline, according to the firm. The announcement was made alongside the release of M&G Real Estate’s Responsible Property Investment (RPI) Report which details the firm's approach to environmental matters, health, wellbeing, occupier experience and society.
Nina Reid, director of RPI at M&G Real Estate, added: 'There is definitely momentum behind the need for all buildings to achieve net zero carbon being driven from various angles – from regulators and occupiers to investors. We are making good progress, but we cannot underestimate the challenge of transitioning all buildings to net zero carbon - this will require buildings to be designed, built and refurbished in very different ways.
'We also need to consider which factors enable or challenge buildings in their net zero status and embed these considerations into our buying decisions. From an opportunity perspective, we are seeing occupiers setting targets that outpace regulatory requirements, driving the demand for high-performing buildings.
'We will maintain a strong focus on driving energy reductions throughout our portfolio, using green building certificates to highlight the performance of those assets to investors.'
