Austria-based IIÖ Institute for Real Estate Economics is developing a climate-change benchmark for real estate assets at the request of large European investors.
The investors are APG Asset Management, manager of the €459 billion ($506 billion) Stichting Pensioenfonds ABP, Heerlen, Netherlands; PGGM, manager of the €216.6 billion Stichting Pensioenfonds Zorg en Welzijn, Zeist, Netherlands; and Norges Bank Investment Management, which manages the assets of the 9.6 trillion Norwegian kroner ($1.1 trillion) Government Pension Fund Global, Oslo.
The benchmark is endorsed by GRESB, a group that developed an environmental, social and governance benchmark for real estate and infrastructure investments. The new benchmark will build on the Carbon Risk Real Estate Monitor, an initiative supported by the European Commission this year to measure the reduction in the carbon footprint of European commercial real estate assets. The new benchmark also will show insight per country and per subasset class as well as what parts of assets are aligned with the goals of the Paris Agreement, which aims to limit the increase in global temperature to 2 degrees Celsius.
As a complement to CRREM, the benchmark starting in the first quarter of 2020 will give insight into carbon risks in major real estate markets outside the European Union such as North America and in the residential sector.
"We want this initiative to become the global standard to measure the extent to which a real estate portfolio is in line with a 1.5 or 2 degree scenario," an APG spokesman said in an email.