A recent article in Investments & Pensions Europe (IPE) magazine provided a detailed review of a study that looked at the status of environmental management programs in the EU commercial real estate industry. Based on the results of the study, the sponsors have launched a new Global Environmental Real Estate index.
Research commissioned by asset managers APG and PGGM and the Universities Superannuation Scheme found many property companies and fund managers are not actively managing environmental issues in their real estate portfolios, even though research suggests environmental performance is “significantly and positively related with return on assets”.
The findings may actually be more positive than the true status of property companies environmental performance as it is feared only the better property managers responded to the survey.
Companies focused on residential or non-core property types “score substantially lower on the implementation measurement index of environmental practices”, the study found. At the same time, dedicated office funds have the highest scores as many of the environmental metrics and technology on the market is targeted at that sector. Yet industrial buildings significantly lag other sectors.
Findings revealed just 19% of property company respondents report actual numbers of energy consumption, while 16% report water consumption and 14% report carbon emissions.
The criteria for assessment were related to the presence of environmental management policies, the integration of issues in property management and their disclosure, and asked for evidence on water and energy consumption, waste collection and recycling, CO2 emissions as well as on employee environmental training programs and remuneration policies.