Schroders joins network to accelerate change in sustainable real estate

Collective action on real estate decarbonisation 'essential'

Schroders has announced 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.

According to Schroders, joining GREEN will allow its global cities team to work alongside its peers to engage with listed real estate companies and implement meaningful change. 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.

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.”

According to most estimates, the real estate sector accounts for approximately 40% of global greenhouse gas emissions. The network’s mission, therefore, is to ensure that the industry reaches the goals set out in the Paris Climate Agreement.

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.

The statement outlines four actions on climate change and sustainability for real estate funds and companies. These are:

  • 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.

“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,” commented Tom Walker and Hugo Machin, co-heads of global listed real assets at Schroders.

“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.”