Responsible Property Investment

Paris, France — Investors worldwide must embed environmental thinking in the heart of their property investment portfolios if the financial services sector is to play a pivotal role in halting climate change, the United Nations Environment Programme Finance Initiative (UNEP FI) Working Group warns.

The success of the UN Principles for Responsible Investment (PRI), now signed by institutions representing over US$6 trillion in assets owned, has shown the growing commitment by institutional investors and their financial partners to achieve better long-term investment returns through more sustainable investment activity.

The new UNEP FI Property Working Group, launched formally today at the headquarters of Caisse des dépôts in Paris, was born out of the PRI research process and is constituted by institutional investors and fund managers striving to encourage sustainability in mainstream property finance.

“Investors’ responsibility cannot be limited to their assets in large listed companies. The environmental and social stakes in real estate must be a subject of investors’ benchmarking to prepare property responsible investment practices,” said Jean-Pierre Sicard, Head of Sustainable Development at Caisse des Dépôts and co-chair of the PWG.

A recent UK report estimated that, through their construction, use and demolition, built structures are the source of nearly 50% of carbon emissions. By taking sustainability factors into account and embracing environmental, social and governance issues in property investment, the PWG believes the finance sector can significantly reduce carbon emissions and increase energy and water efficiency in new and existing buildings.

“Trends show clearly that sustainability and social responsibility issues have moved from a largely public relations focus to becoming mainstream in core financial activities. Investment in property, as an important asset class, needs to follow the same trend,” said Mr. Paul Clements-Hunt, head of UNEP FI. The Working Group’s first project is to capture and present best practice demonstrating the financial and environmental value of responsible property investment.