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ESG video series for Real Estate Fund Managers: Net Zero Carbon

By Grace Melville
15th June 2021

How will Net Zero carbon affect Real Estate Fund Managers?

The Association of Real Estate Funds ESG & Social Impact Investing Committee recently launched The AREF ESG 5 Year Roadmap, in collaboration with Carbon Intelligence. 

This series features six exclusive short films that explain when you will be affected by incoming regulation or market change and how you can prepare. There will be leaders and laggards in the race to zero and those who embrace responsible investing will come out on top.

This video features Chris Ronketti, Director of Operations at Carbon Intelligence and Abigail Dean, Global Head of Strategic Insights at Nuveen Real Estate.

Key Takeaways from Carbon Intelligence

  • Net Zero means to reduce company and value chain greenhouse gas emissions in line with limiting warming to 1.5 degrees
  • This means shifting to all electric heating, powered by renewable sources, and reducing usage in line with the asset’s share of forecasted renewable energy
  • Not adapting to the climate crisis will risk buildings becoming obsolete and losing value because they are unattractive to let or purchase
  • Embodied carbon will equate to about 75% of the lifecycle emissions over 60 years
  • Only verified offsetting projects that remove carbon from the atmosphere in a way that is additional and permanent will be deemed compatible with net zero

Key Takeaways from Nuveen Real Estate

  • Aim to be net zero ahead of the market. There is significant risk that buildings will lose value rapidly in the run up to 2050. By setting a more ambitious target you can protect and enhance the value of your funds
  • Offsets should be the final stage in the process and the emphasis should be on reducing carbon as far as possible
  • Not all buildings will decarbonise in the same way and the cost, timeline and impact on valuation of the transition to net zero will differ across asset types
  • Key challenges will be engaging with tenants, the skills gap in the industry, and the lack of a certification that says definitively whether a building is net zero or not

 

Contact Us

The transition to net zero will require a long term strategic plan and we’re here to help. Contact our team today to understand more about how we’re supporting organisations to develop their net zero roadmaps and ensure climate success, info@carbon.ci OR oliver.light@carbon.ci

Download | Net Zero: The Guide for Commercial Real Estate