Abstract
This summary report provides details of the key issues from the research report on Benchmarking Real Estate
Investment Performance: The Role of ESG Factors. This is an increasingly important area for all players in the real
estate investment space, as ESG takes on more significance globally and, specifically, in real estate.
Environmental, Social and Governance issues (“ESG”) have increased in importance in the real estate industry
over the last five years, dating back originally to the 2015 Paris Agreement. This project specifically examined
issues around ESG benchmarking in real estate investment. Using 60 stakeholder interviews with key players
globally, the use of ESG benchmarking in real estate was assessed at various levels (delivery, reporting and internal
benchmarking), and across different types of asset owner (listed company, pension fund and asset manager).
In particular, the authors examined the adequacy of existing ESG benchmarks in real estate in measuring specific
factors such as climate resilience, climate change risk, zero-carbon targets, supply chain risk, wellness, diversity
and governance issues. Based on the interview responses, they have identified areas for improvement in current
benchmark practices. They anticipate that increased technology and data, coupled with user demand will lead
to the development of a range of new ESG benchmarks in real estate performance measurement. It is likely that
these benchmarks will focus more fully on assessing performance, outcomes and impacts at a more granular
level. This will also produce a fuller range of ESG metrics, particularly in the currently under-represented social (S)
dimension of ESG, as stakeholders more effectively assess issues such as community impact.
Investment Performance: The Role of ESG Factors. This is an increasingly important area for all players in the real
estate investment space, as ESG takes on more significance globally and, specifically, in real estate.
Environmental, Social and Governance issues (“ESG”) have increased in importance in the real estate industry
over the last five years, dating back originally to the 2015 Paris Agreement. This project specifically examined
issues around ESG benchmarking in real estate investment. Using 60 stakeholder interviews with key players
globally, the use of ESG benchmarking in real estate was assessed at various levels (delivery, reporting and internal
benchmarking), and across different types of asset owner (listed company, pension fund and asset manager).
In particular, the authors examined the adequacy of existing ESG benchmarks in real estate in measuring specific
factors such as climate resilience, climate change risk, zero-carbon targets, supply chain risk, wellness, diversity
and governance issues. Based on the interview responses, they have identified areas for improvement in current
benchmark practices. They anticipate that increased technology and data, coupled with user demand will lead
to the development of a range of new ESG benchmarks in real estate performance measurement. It is likely that
these benchmarks will focus more fully on assessing performance, outcomes and impacts at a more granular
level. This will also produce a fuller range of ESG metrics, particularly in the currently under-represented social (S)
dimension of ESG, as stakeholders more effectively assess issues such as community impact.
| Original language | English |
|---|---|
| Publisher | IPF Research Programme |
| Commissioning body | Investment Property Forum |
| Number of pages | 20 |
| Publication status | Published - 31 Jul 2020 |