COP 26 focused attention on the built environment’s contribution to climate change and its potential to mitigate the effects and a recent publication produced by INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, provides guidance on how that can be achieved.
“There are many definitions and frameworks that define net zero carbon and this paper provides references to the definitions that are relevant for real estate industry,” INREV CEO Lonneke Lowik explained.
“Carbon targets are relevant to all investors, investment managers and vehicles but each will have to tailor it to their specific investment management strategy and their planned holding periods,” she told Real Asset Insights’ Richard Betts.
Lowik said net zero carbon targets should be guided by investment strategies and the asset portfolio of investment vehicles. Investment managers and investors should develop a clear and suitable methodology, establish a measurement framework and baseline carbon footprint.
She said that there are still many challenges both for investors and investment managers and it is important that there is a clear and consistent approach on how a neutral carbon target can be implemented across the industry. “Further work is definitely needed for development and refurbishment. That presents a challenge for energy and carbon efficiency because there is a common performance gap between what is designed and the actual operational use.”
There’s also a lack of standardised disclosure around net zero carbon targets.
“That needs to be worked on, and there’s also a significant skill gap in the industry across the whole chain, from designers and engineers to the property managers and asset managers, lawyers etc.
“Everybody needs to have a solid understanding of climate risk and net zero carbon in order for the transition challenge to be met as an industry.”