ESG in action: case studies with Invesco Real Estate

ESG in action: case studies with Invesco Real Estate

At Invesco Real Estate, ESG+R (resilience) has been our fundamental commitment for many years. Our philosophy is based on the belief that ESG+R can deliver competitive financial returns and opportunities for business growth and innovation.

Our commitment means we work together with our partners to improve ESG performance and to promote best practices. This allows us to respond to changing market dynamics and facilitates engagement and transparency.

Our ESG integration efforts are directed towards achieving better buildings with broader insights, aiming towards a more risk-resilient portfolio.

The next step is to show you what we mean when we talk about ESG+R and how we apply it as a real estate investment leader.

Environmental case study: our first net zero building

As part of our efforts to identify and implement efficiency measures, we track and monitor property-level energy, emissions, water and waste data. This allows us to assess the environmental performance of our assets and make ongoing improvements.

Each year, we also identify buildings as candidates for green building certifications such as LEED, BREEAM, HQE, Green Star, CASBEE, and IREM Certified Sustainable Property.

321 Exhibition Street in Melbourne, Australia – a 30,200 square meter, 20-storey office building – is the first asset to meet our global commitment to net zero. In 2017, it became the first retrofitted office building in the State of Victoria to achieve the 6-star NABERS energy rating. This is the highest rating on the scale, and a sign of a market-leading building. It also has a 6-star NABERS water rating and 5.5-star indoor environment rating.1

Through modern building systems and an onsite trigeneration plant, providing electricity and heating, the property is among the top 5% of buildings nationally in terms of emissions per unit of area.

Further ESG enhancements in 2020 include new LED lighting, a bin tracker system which increases waste diversion, and an onsite organic waste recycling plant.

Additional facilities were added in 2021 to encourage a more sustainable commute – 150 bike racks, 20 showers, 200 lockers and a wellness centre.

321 Exhibition Street was certified carbon neutral under the Australian government’s Climate Active programme.

Social case study: low-income housing in the Bronx

Good social outcomes are important to us. We want to give back to the communities we operate in, and our buildings can help improve the environment in which people live and work.

In the Bronx neighbourhood of New York City, our 48-building portfolio with 1,904 units provides low-income housing to the community’s working class. It is the largest portfolio of its kind in the city, acquired by Invesco Real Estate in 2021 in a joint venture agreement. We plan to incorporate job training and offer residential financial literacy programmes across the portfolio. We are also looking to fund music programmes for younger residents.

Governance: our approach and accreditations

We’re committed to maintaining the highest standards of integrity and accountability. Proper and effective corporate governance is important to our stakeholders, and it is important to us.

We work directly with our property management teams and third parties to ensure all assets comply with current regulations. We also monitor the regulatory landscape for new developments.

Furthermore, Invesco is a signatory to the UN’s Principles for Responsible Investment (PRI). We scored an ‘A+’ rating for our overall approach to responsible investment (strategy and governance) for the fourth consecutive year in 2020. We also scored an ‘A’ rating in the direct property module for the fifth year running.1

In 2021, we submitted 12 portfolios for annual GRESB assessments. GRESB is a global ESG benchmark for real assets. This represents 60% of our global assets under management. We received an average score of 86.4 out of 100. We also achieved seven 5* ratings, with two of our portfolios achieving ‘Global Sector Leader’ status. One of our regional strategies achieved first place in its peer group for the seventh consecutive year.1

Furthermore, we engage directly with investors by including ESG+R updates in our quarterly investor reports. We also produce annual sustainability reports. Finally, we report overall ESG+R matters at our annual investor conferences.

Case study: climate-resilient building in Mannheim

Resilience is a key part of our responsible investment approach. Our TCFD reporting2 is critical in determining our assets' resilience and the two distinct types of risks they face: physical and transition.

Additionally, we recognise the potential impact that shock risks (hurricanes, flooding, wildfires) and chronic risks (rising sea levels, reduction in water supply, more extreme heat days) can have on assets. The below article explores this in detail.

In 2019, we engaged climate risk analytics firm Four Twenty Seven to assess potential physical risks to our assets over the next 20 years. We also work closely with insurers to identify physical risks and prioritise assets that may need to implement risk mitigation strategies.

A recent example is Spinelli and Flairwood – our mixed-use building in Mannheim, Germany. This development consists of two buildings with apartments and commercial space. Built with state-of-the-art wooden methods, the buildings were designed with a clear focus on sustainability and tenant well-being. For example, their wooden frames limit embodied carbon and a rooftop photovoltaic system further reduces carbon emissions. As a result, the property achieved the highest German energy efficiency standard for superior energy performance in 2021.

We have many more examples of our ESG+R approach, so why not talk to us about how we can help you integrate ESG and add resilience to your real estate allocation? 

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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  • 1Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time.

    2TCFD stands for Task Force on Climate-Related Financial Disclosures. The TCFD has developed a framework to help organisations disclose climate-related risks and opportunities.

    3AUM data as at 30 June 2022.

Investment risks

  • 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.

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  • All data is provided as at the dates shown, sourced from Invesco unless otherwise stated.


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    EMEA2449708 / 2022