GLOBAL - Global real estate investors managing nearly $1trn (€700bn) in assets have improved environmental reporting substantially and cut energy consumption by as much as 3% last year, according to a report backed by pensions giants including APG and ATP.
Collecting information from more than 340 property funds and companies, the Global Real Estate Sustainability Benchmark (GRESB) research report found that, on average, managers succeeded in lowering their greenhouse gas emissions by 1.8% in 2010 - with Europe trailing behind both the US and Australia.
APG chief investment officer Angelien Kemna said applying the benchmark had become "an integral part" of her organisation's investment process.
She said APG, asset manager for €242bn Dutch scheme ABP, applied the benchmark to existing holdings and to new property investments when conducting due diligence.
"Ultimately," she said, "this should reduce the environmental impact of APG's real estate investments and improve the financial risk/return profile of our investments.
"The ever-louder demands from policymakers to reduce emissions will increasingly affect the way the property sector operates."
Jac Kragt, chief investment officer at Dutch healthcare scheme PGGM, praised the GRESB for taking into account both private and listed real estate in its calculations.
"As a global investor in both private and listed real estate, it is important to us and our clients to be able to benchmark ESG performance and compare between funds, companies, regions and listed and private real estate," Kragt said.
Nils Kok, executive director of the GRESB foundation - backed by several other pension funds, including the UK's Universities Superannuation Scheme and Dutch healthcare scheme PGGM - stressed that the real estate sector could go about structurally reducing energy demand.
Despite response rates for North America being lower than for both Asia and Europe - which combined accounted for more than 70% of respondents - North American real estate made up nearly 50% of respondents' property.
The survey found Australian funds performed "exceptionally well" in areas of environmental management, as well as policy and disclosure, while Europe claimed 44% of the top ratings awarded. However, Europe accounted for 57% of all submissions.
Commenting on the results, Kok - who found respondents paid $5bn in energy costs and produced 34m tonnes of carbon emissions - said reporting on energy, carbon, water and waste was still rare.
"The data shows most fund managers in the commercial property sector are just at the beginning of full integration of environmental management in daily operations," he said.
The GRESB currently represents $1.7trn in institutional assets, with members including Canada's Ontario Teachers Pension Plan and Australia's Local Government Super.
Earlier this week, the CAD$58bn (€44bn) Ontario Municipal Employees Retirement System's Oxford Properties joined as well.