Schroders joins GREEN to drive sustainability in real estate

Schroders joins GREEN to drive sustainability in real estate

December 19, 2023

ESG-investing Real Estate
Duurzaamheidsdata Sustainability data (Geralt, Pixabay)

Schroders today announces that it has joined the Global Real Estate Engagement Network (GREEN), a not-for-profit engagement network of global institutional investors dedicated to accelerating change and driving sustainability in the real estate industry.

Joining GREEN will allow Schroders’ Global Cities team to work alongside its peers to engage with listed real estate companies and implement meaningful change.

Currently, the real estate sector accounts for approximately 40% of global greenhouse gas emissions (1). The network’s mission is to ensure that the industry reaches the goals set out in the Paris Climate Agreement (2).

Through the power of this coalition, members aim to steer listed and non-listed real estate companies to improve their sustainability performance and reduce their exposure to financial and non-financial climate risk.

One of the key initiatives undertaken by GREEN is the development of an investor statement, endorsed by all members, which provides a structured engagement framework, enabling large institutional investors to collaborate and coordinate their efforts effectively.

It outlines four actions on climate change and sustainability for real estate funds and companies:

  • Provide enhanced disclosure on the robustness of companies’ business plans in different climate scenarios to aid investment decision-making
  • Implement a strong governance framework for climate change and sustainability
  • Develop science-based transition pathways to help meet Paris Agreement goals
  • Promote certified data across the portfolio, such as building certification

Andy Howard, Global Head of Sustainable Investments at Schroders, said:

'Schroders has a long-standing history of promoting sustainability throughout its investment portfolios. Aligning with other investors through GREEN will help us achieve even greater impact and influence with real estate companies across different markets. This collaborative initiative sends a powerful message to the industry, which we hope will encourage other investors to prioritise sustainability and take action.'

Tom Walker and Hugo Machin, Co-Heads of Global Listed Real Assets at Schroders, commented: 

'Joining GREEN not only highlights our ongoing commitment to sustainability in our investment approach but also demonstrates our focus on differentiating ourselves within the real estate industry. Real estate and cities are major carbon emitters, and by working together with our peers, we can drive significant change and reduce the environmental impact of this sector.

The impacts of climate change are already being realised for the real estate sector, and the frequency and severity of these impacts is expected to increase in the future. The potential cost of inaction or maladaptation could lead to significant material and financial consequences.

Fast and effective action now could set leaders apart, but this is not just competition – collective action is essential given the scale and regional impact of the consequences, besides impacting individual assets at risk.

Schroders' Global Cities team is therefore excited to contribute to this industry-wide initiative and steering the industry on a path towards a more sustainable future.'

 

2) The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016. Its overarching goal is to hold 'the increase in the global average temperature to well below 2°C above pre-industrial levels' and pursue efforts 'to limit the temperature increase to 1.5°C above pre-industrial levels'.

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