Login to access your documents and resources.
The client portal are currently unavailable for use on mobile. Please visit the desktop site.

As featured by Better Buildings Partnership, Abigail Dean, Head of Sustainability, Real Estate, elaborates on our public commitment to reduce the energy intensity of our global equity portfolio, detailing the methodology, benefits, financials and management of the target.

TH Real Estate has made a public commitment to reduce the energy intensity of its entire global equity portfolio by 30% by the year 2030, based on a 2015 baseline. This responds to and supports the ambitious goals for sustainable real estate established at the 21st annual Conference of Parties (COP21) held in Paris in 2015.

Situation
TH Real Estate is one of the largest real estate investment managers in the world, with equity investments in nearly 900 office, retail, industrial and residential assets globally. Through its tomorrow’s world approach, TH Real Estate integrates environmental, social and governance principles into its investment strategies and business operations.

At COP21, ambitious goals were established to limit global warming to 2 degrees and strive towards 1.5 degrees. It is estimated that real estate is responsible for about 40% of global CO2 emissions. These emissions arise from onsite fuel usage (such as gas for boilers) and from the use of electricity and other energy sources.

Actions

As a sustainability leader, TH Real Estate reviewed the implications of COP21 across its global equity portfolio.

Discussions with teams across the business, including investment, sustainability and research, revealed consensus for a science-based target covering all funds, not only those where investors have expressed a strong interest in sustainability. This is in line with the tomorrow’s world philosophy, ensuring that assets are ready for the heightened pressures, growing responsibilities and new opportunities in the markets of tomorrow, so that TH Real Estate consistently outperforms. Setting a science-based target is simply good asset management, as failure to prepare for the implications of COP21 now would be letting investors down and risking stranded assets.

TH Real Estate commissioned sustainability consultants Verco to establish a reduction target in line with the science-based approach. Verco applied the Sectoral Decarbonisation Approach methodology, released by the Science Based Targets initiative. This splits the global economy into sectors, each attributed their portion of the world’s 1,000 gigatonne carbon budget for 2011-2050 and set a decarbonisation pathway.

Following this review, TH Real Estate made a public commitment in March 2017 to reduce the energy intensity of its global equity portfolio by 30% by the year 2030, based on a 2015 baseline. Energy intensity is measured by the asset’s use of kilowatts per hour, per sq ft1.

TH Real Estate is currently going through the process of having the target accredited by the Science Based Targets initiative and expects this to be complete in early 2018.

Financials
The basis for setting the target is that improving the energy efficiency of the portfolio is always associated with a payback based on energy savings and also that it future-proofs the assets as market expectations on energy performance continue to evolve. Therefore, while there are costs associated with specific activity, the business case for these is always proven.

All properties that have above a £250,000 (or local currency equivalent) per annum spend on energy to have an energy audit at least every three years, plus a package of remote support from a specialist energy management consultancy in that region. Wherever possible, this comprises a performance-guaranteed energy management service comprising remote analytics. This applies to c.60 properties across the TH Real Estate portfolio in the United Kingdom, United States, across continental Europe and in Asia Pacific. The cost of the package of support is typically accompanied by a guarantee that the energy savings will outstrip the cost of the service.

All properties have a Sustainability Action Plan that includes energy efficiency measures such as LED rollout and HVAC upgrades. The business case for these is assessed on a case-by-case basis.

Benefits
1. Preparing for tomorrow’s world – demonstrating good asset management and protecting investors from the risk of stranded assets.
2. Showing sustainability leadership – building on TH Real Estate’s long-established effort to embrace sustainability and reduce the risk and impact of climate change.
3. Reducing occupiers’ utility bills through energy reductions and supporting their sustainability objectives.
4. Cutting carbon emissions and contributing to the global movement to limit global warming to 2 degrees and strive towards 1.5 degrees, as agreed in the Paris Accord.

Note: TH Real Estate renamed to Nuveen Real Estate in January 2019.

Past performance is no guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. This document is not directed at or intended for any person (or entity) who is citizen or resident of (or located or established in) any jurisdiction where its use would be contrary to applicable law or regulation [or would subject the issuing companies or products to any registration or licencing requirements]. TH Real Estate is an investment affiliate of Nuveen, LLC (“Nuveen”), the investment management arm of TIAA. TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. Issued by Nuveen Real Estate Management Limited (reg. no. 2137726), (incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3BN) which is authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored.