A major survey of European pension funds on the integration of ESG into commercial real estate has found that the majority believe social factors will drive most value over the next three years.
The poll, conducted by London-based ESG data intelligence firm Deepki, revealed that 62% of pension funds predict social factors such as the revitalisation of public spaces, affordable and social housing, and diversity and workplace safety, will drive the greatest value in commercial real estate in the next three years.
The report surveyed 250 European pension fund managers in the UK, Germany, France, Spain and Italy with a combined AUM of €402 bn.
After social factors, environmental issues such as energy efficiency, water use and materials were seen driving the greatest value (24% of funds polled), while governance factors such as compliance with regulations, remuneration and action against corruption were considered to have most effect by 12% of survey participants.
When asked about their funds’ focus on ESG factors, 28% and 29% of respondents described their environmental performance as ‘good’ or ‘very good’ respectively, whereas 18% described it as ‘poor’.
In contrast, 43% described the focus on social factors as very good and 21% as good. Only 12% described it as poor. Governance factors also scored highly, with 37% of respondents describing their funds’ focus as good and 26% as very good.
‘The findings illustrate the complexities of measuring ESG performance, in particular carbon footprint and other environmental factors,’ commented Vincent Bryant, CEO & Co-founder of Deepki.
‘The Covid pandemic has also brought social factors into sharp relief, as businesses have worked hard to ensure work and living spaces provide healthy, safe and secure environments for occupants.’
Deepki’s ESG data intelligence platform is intended to help commercial real estate investors, owners and managers improve the ESG performance of their real estate assets, and in the process enhance their value.
