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Investing in tomorrow's world: Real estate sustainability report

Abigail Dean
Global Head of Strategic Insights
Solar panels at sunset

Our sustainability approach and review of our 2019-2020 achievements

We integrate ESG throughout our real estate investment management process to help preserve and create value for our clients in tomorrow’s world. In this annual report, we explain our approach for managing the financial risks and opportunities associated with climate change and being a responsible property investor, whilst also highlighting our key awards and achievements over the past year.

2019-2020 awards and achievements

  • Achieved 16 Green Stars in the Global Real Estate Sustainability Benchmark
  • Earned 13th consecutive EPA ENERGY STAR 'Partner of the Year Sustained Excellence' award
  • Earned an A+ rating in latest Principles for Responsible Investment sustainability benchmark results
  • Won 'Property Sustainability' award at the 2019 EG Tech Awards
  • Named a 'Goal Achiever' by the U.S. Department of Energy

Managing the financial risks and opportunities associated with climate change and being a responsible investor

We recognise that the physical impacts of climate change will affect real estate values and that it is critical to develop an understanding of how, where and when these physical impacts will become financially material to an individual investment’s financial performance. In the report, we explain the following risks and our process for identifying, evaluating and protecting our real estate portfolio from them:

  • Coastal flooding
  • Temperature extremes
  • Hurricanes and typhoons
  • Severe storms
  • Wildfire
  • Drought
We are also conscious that the transition to the low carbon economy presents both financial opportunities and risks, which are explained in the report. Effectively managing building efficiency and carbon intensity throughout this transition is a key factor in creating and protecting value in the assets we manage. Whilst our sustainability strategy encompasses a broad range of ESG issues, we believe the physical impacts of climate change and the transition to the low carbon economy will have the most significant impact on real estate asset values and are therefore the most material for our clients.

In 2019, we signed a ground-breaking commitment to tackle the growing risks of climate change through the delivery of net zero carbon real estate portfolios by 2050.

Investing in innovation to achieve better buildings

To achieve our ambitious sustainability goals, we must invest in the latest technology and be innovative in our approach. This is a core part of how we do business, and we are particularly proud of our role in supporting and promoting the innovations that champion health and wellbeing in buildings and use smart building technology to achieve energy efficiency.

Case study: JCB Unit, Stoke-on-Trent, U.K.

Aerial view of JCB building 

This 382,949 sq ft (35,57 sq m) logistics asset has implemented a number of energy saving initiatives which has resulted in the asset being the first logistics building in the world to achieve 'Outstanding' BREEAM rating. These initiatives include:

  • Roof-mounted solar panels providing lighting to 50% of the office block during an eight-hour day
  • Panels on the outside of the building to allow naturally-heated air into the internal heating system
  • A solar thermal hot water system that preheats water for use in the offices plus a rainwater collection system
  • A cost-efficient underfloor heating system and efficient lighting linked to movement sensors

Priorities in 2020 and beyond

  • Formalise our climate risk investment framework, including guidance on levels of risk that preclude investment.
  • Develop a zero carbon pathway and cost model.
  • Roll out the priority sustainability technologies that we have identified in each asset class.
  • Focus on tenant engagement and tenant data gathering – significantly increase the proportion of energy consumption data that we gather from tenants.
  • Undertake assessments of the social value of major new developments and undertake a review of vulnerability to modern slavery and wage levels compared to living wage across our supply chain.
  • Develop a global sustainable development framework working towards our 2050 net zero carbon commitment, using the 'Design for Performance' principles as a starting point and incorporating embodied carbon.
  • Further develop our training programme to deliver more bespoke and advanced sustainability training across our business.
  • Develop a route map to fully comply with the Task Force on Climate Related Financial Disclosure Framework.
We hope you enjoy reading about our real estate sustainability efforts and gain an insight into our responsible property investment process and priorities.
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Dimitri Stathopoulos
United States