Nuveen steps up ESG pace but Article 8 funds remain focus

Investment manager Nuveen has ambitious sustainability goals and, since early 2021 has been aiming for net zero carbon by 2040.

This year the company has been much more specific about how that goal is to be achieved and the assumptions required including grid decarbonisation, the direction of regulations and of investors and occupiers, as Nuveen’s global head of strategic insights Abigail Dean explained.

Talking to Real Asset Insight’s Richard Betts she said that with several milestones behind it in terms of energy efficiency and a reduced carbon footprint, the company is also looking at social impact, which is going to be a major preoccupation, having already launched a social impact housing fund in the USA.

The immediate focus going forward is on Article 8 funds. “We don’t really see Article 9 funds in their current form as relevant to the real estate industry, except in a few situations,” Dean said.

“Given that you have to have 100% sustainable Investments, we’ve interpreted that to mean that all buildings in an Article 9 fund have to have at least an EPC B from the point of investment so that really precludes transition.”

Dean explained that much of Nuveen’s focus is on transitioning assets from ‘brown’ to ‘green’.

“We think there’s a lot of scope to do that really well in Article 8 so we’ve been working on ensuring transparency and making sure that we’re monitoring the right metrics to be able to identify sustainable investments and report on that to our investors,” she said.