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ESG in action: case studies with Invesco Real Estate
Find out how we are incorporating environmental, social and governance (ESG) criteria at Invesco Real Estate. Read our case studies.
20 October 2022
Insight
Our approach to ESG when investing in real estate
Many investors are increasingly concerned about their impact on the world around them. As such, they are turning to strategies that produce positive environmental, social and governance (ESG) outcomes, while also delivering sustainable returns.
While mainstream asset classes – such as bonds and equities – have been the main focus of this trend, there have been a growing number of institutions considering the ESG credentials of their real estate allocations too.
At Invesco Real Estate, ESG+R (resilience) has been a fundamental commitment for many years. We take a deliberate and disciplined approach, balancing our environmental, social and fiduciary responsibilities. This allows us to focus on driving good performance and meeting our clients’ needs.
Our philosophy is based on the belief that ESG can deliver competitive financial returns and opportunities for business growth and innovation. That’s why we formed our Global ESG+R Committee in 2019, with representatives from each area of our business. This committee oversees all aspects of ESG+R for real estate assets.
Our environmental objectives
We regularly measure and report on energy usage, emissions, water and waste. We also focus on improving performance across our managed portfolios.
We have three targets1 to help us meet our objectives:
We are targeting a 3% annual reduction in energy usage and emissions by 2030 (from a 2018 baseline). This will align us with the Paris Accord goal of limiting global warming to 2°C above pre-industrial levels. It will also help us meet our aim of reaching net zero carbon emissions by 2050.
We target a 1% annual reduction in water consumption by implementing low-cost measures, capital improvements and new technologies.
We look to achieve a 1% annual increase in waste diversion rates. Again, our approach involves implementing low-cost measures, capital improvements and new technologies.
Our social objectives
On the social aspects, we are investigating different ways to meet our objectives. For example, we encourage our tenants to adopt sustainable practices and healthier lifestyles by providing services and amenities. These include gyms and bicycle storage.
Our employees also help us meet our social objectives, and we are encouraging them to be active in the growth and development of their own communities.
Furthermore, we’re supporting diversity and inclusion in our workforce through training and communications. Creating a work environment that optimises our employees' full potential is also an important part of this.
Our governance objectives
Our governance objectives include integrating ESG into our decision-making and due diligence processes.
Furthermore, we’re disclosing our ESG performance to stakeholders through internationally recognised reporting frameworks, and ensuring both our assets and employees adhere to the highest ESG and ethical standards.
Building climate resilience
As far as resilience is concerned, we’re evaluating the physical risks our assets may face through climate change.
These include single catastrophic events like hurricanes and extreme flooding, or changes over time like higher temperatures or rising sea levels.
Additionally, we will monitor our properties’ exposure to transition risk as the shift towards a low carbon economy continues.
How we align ESG+R with investing
It is possible to be good stewards of the environment in a way that is consistent with our fiduciary responsibilities as an asset manager. But don’t just take our word for it: we’ve been signatories and members of some of the industry's key ESG initiatives for some time.
Since 2012, we’ve reported to GRESB – a global ESG benchmark for real assets. We have been a member of the body since 2014.
In 2021, GRESB ranked seven of our portfolios five out of five ‘green stars’. This is the highest possible achievement. We were also named ‘sector leader’ in two categories, and ranked first place in our peer group for three portfolios. We continue our efforts to improve our scores across the board each year.2
We also provide annual reports as part of the Global Reporting Initiative and the European Association for Investors in Non-Listed Real Estate Vehicles (INREV). This aims to improve transparency, professionalism and best practices across the sector.
As an international real estate manager, we’re aware of our global responsibilities and have taken action to align our ESG+R initiatives with the United Nations Sustainable Development Goals.
Finally, as part of Invesco, we’ve been a signatory to the UN’s Principles for Responsible Investment since 2013, scoring an ‘A’ rating in 2021 in the direct property module for the sixth consecutive year.2
We have many more examples of how we implement our ESG+R investment approach at Invesco Real Estate. Let us show you how we can help align your allocation with your stakeholders’ ESG expectations too.
With around $90 billion in AUM3, we’re one of the world’s largest real estate managers. Explore our global, regional, direct, listed and debt capabilities below.
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Footnotes
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1Invesco cannot guarantee that these targets will be realised.
2Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time.
3AUM data as at 30 June 2022.
Investment risks
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The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to. The value of property is generally a matter of an independent valuer’s opinion and may not be realised.
Important information
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Date published: 20th October 2022.
All data is provided as at the dates shown, sourced from Invesco unless otherwise stated.
By accepting this material, you consent to communicate with us in English, unless you inform us otherwise.
This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.
EMEA2449708 / 2022
