Below is an excerpt from ISS ESG’s recently released paper “Navigating the ESG Landscape– A Typology of Sustainability Strategies in Direct Real Estate Investment”. The full paper is available for download from the Institutional Shareholder Services (ISS) online library.
KEY TAKEAWAYS
- Private markets are experiencing an uptick in the integration of Environmental, Social and Governance (ESG) factors, and Real Estate stands out both in volume and quality of opportunities.
- There is no single standard that can be applied across different regions, requirements or policies to guide investors in the implementation of ESG integration practices in direct Real Estate.
- Key trending ESG parameters include climate impact; compliance with regulatory bodies (national and global); impact on the UN Sustainable Development Goals (SDGs); energy conservation; and occupant health and wellness.
- There is an increasing overlap between the requirements of regulatory bodies and building certification systems, as each attempt to ensure a holistic ESG performance.
- Investors are paying closer attention to the physical risks for real assets within their portfolios, as the global impacts of climate change begin to be felt.
- A typology of ESG strategies suggests that plain vanilla approaches are rare, with a substantial overlap between the motivation behind different approaches.
The following charts show the proportion of Real Estate companies with a respective percentage of portfolio floor space certified to a sustainable / green building standard, based on data from the ISS ESG Corporate Rating.
Explore ISS ESG solutions mentioned in this report:
- Identify ESG risks and seize investment opportunities with the ISS ESG Corporate Rating.
- Assess companies’ adherence to international norms on human rights, labor standards, environmental protection and anti-corruption using ISS ESG Norm-Based Research.
- Understand the impacts of your investments and how they support the UN Sustainable Development Goals with the ISS ESG SDG Solutions Assessment and SDG Impact Rating.
- Use ISS ESG Climate Solutions to help you gain a better understanding of your exposure to climate-related risks and use the insights to safeguard your investment portfolios.
By Hendrik Leue, Head of Bespoke Research & Advisory Solutions, ISS ESG Namrata Doshi, Senior Associate, Bespoke Research & Advisory Solutions, ISS ESG.
