Major real estate asset managers are failing to report portfolio emissions accurately, according to a new benchmark report, undermining their decarbonisation commitments and leaving institutional investors exposed to financial risks. An analysis of public disclosures by 16 firms with a combined $166 trillion in real estate AUM by responsible investment campaign group ShareAction found that two thirds did not include construction-related emissions in their commitments.
The study, titled ‘Built to Last’ revealed sharp contrasts between leaders – such as Nordic firm Nrep which was top-ranked and met all 12 of the climate action standards set by ShareAction – and laggards such as Blackstone, Starwood Capital and Greystar, which failed to achieve any. Six investment managers had not set interim carbon reduction targets, including four firms that had made a net zero commitment; several failed to disclose the proportion of their assets covered by interim targets.
Few firms had disclosed portfolio-wide targets on energy efficiency that covered landlord and tenant energy use, nor was it clear what steps were being taken by managers to address the impacts of decarbonisation on tenants, communities, or supply chains. ShareAction said the survey revealed a “concerning lack of transparency” from real estate managers on portfolio emissions despite having made public climate commitments.
“The construction and operation of buildings account for a staggering third of global emissions, creating financial risks that managers must take seriously. The asset owners they act on behalf of, including pension funds, are relying on them to do so,” said Senior Research Manager Aidan Shilson-Thomas.
