The world’s largest real estate investment managers are failing to take even the most basic actions to tackle climate change, a new report by ShareAction has said.
The report, Built to Last?, assessed how major real estate investment managers are addressing climate change, and found that while many have made public commitments to act on climate, definitive action – not to mention disclosing the emissions from their portfolios – is lacking.
“Some of the world’s largest real estate investment managers are failing to act on climate change at a time when rapid action is needed,” commented Aidan Shilson-Thomas, senior research manager at ShareAction. “The construction and operation of buildings account for a staggering third of global emissions, creating financial risks that managers must take seriously. The asset owners they act on behalf of, including pension funds, are relying on them to do so.”
Meeting standards
Built to Last? assessed 16 managers of non-listed real estate investments with combined assets under management of $1.66 trillion in 2024 – equivalent to the value of the New York City property market. Each was measured across 12 key standards, including committing to net-zero emissions by 2050, and setting interim carbon reduction targets.
Each standard was met by at least one investment manger, it found, however nine of the 16 managers didn’t meet half of them. Just one firm, Nrep, met all 12 standards, and ranked first in the benchmark.
‘Further off track’
“A few investment managers demonstrate commitment to climate action, but continued inaction by their peers is pulling the real estate sector further off track from net zero, with devastating consequences for people and planet,” Shilson-Thomas added. “Given the size of this sector, we need managers to step up and take responsibility for their impacts, while ensuring workers, tenants and communities are at the centre of plans to tackle climate change.”
Some nine of the 16 managers included in the benchmark disclosed a commitment that could be considered ‘comprehensive’, ShareAction added, covering both landlord and tenant emissions. Just five, meanwhile, explicitly included emissions from construction in their commitments.
Managers in the top half of the ranking – including Savills Investment Management, Patrizia, Heimstaden and Prologis, which each received ‘B’ grades – had set science-based targets and are making plans to meet them, and transparently disclosed their emissions. Read the full report here.
