The Pension Real Estate Association is doubling down on environmental, social and governance issues, creating a new set of ESG awards, this time for asset owners.
The inaugural PREA Institutional Investor ESG Award was presented to Ivanhoe Cambridge at PREA's annual investor conference in October. A separate ESG award for managers was first given out by PREA in March.
The award for asset owners is designed to recognize institutional investors at the forefront of ESG within real estate investing, said Greg MacKinnon, Hartford, Conn.-based director of research at PREA, in an email.
Ivanhoe Cambridge is the real estate unit of the C$309 billion ($249.4 billion) Caisse de Depot et Placement du Quebec, Montreal. Some of Ivanhoe Cambridge's accomplishments that helped it secure the award were its new pledge to achieve operational net-zero in its property portfolio by 2040 and its target to reduce the carbon intensity of its real estate holdings by 35% by 2025.
Ivanhoe Cambridge has already reduced its real estate portfolio's carbon emissions by 20% from 2017 levels and has made significant investments in green-certified buildings and affordable housing as well as in sustainable finance instruments like green bonds, Mr. MacKinnon said.
While Ivanhoe Cambridge came out on top, earning the single category award, the judges indicated that the $312.2 billion California State Teachers' Retirement System, West Sacramento, deserved to be recognized, giving the pension fund an honorable mention for, among other measures, using its influence throughout the capital markets across all asset classes, including real estate, "to really move the needle on ESG in the marketplace," Mr. MacKinnon said. Housed within CalSTRS' investment team is a "green team" that specifically looks at sustainability-related risks and opportunities for investment, he noted.
PREA officials plan to announce winners of the money manager awards each spring and the institutional investor awards each fall.
“We made the choice a few years back to ‘lead the change’ in our industry and be part of the solution as we all face the challenge of climate change,” said Rob Simpson, Ivanhoe Cambridge’s director of sustainability, in an email. “As a result, we invest with conviction to achieve sustainability through investments in high-quality real estate properties, projects and companies. Over the long term, we truly believe that a sustainable real estate investment is a profitable investment.”
In response to earning an honorable mention, CalSTRS officials said in an email: “It is an honor to be recognized by the Pension Real Estate Association for working diligently and effectively to improve the environmental, social and governance policies of the companies we invest in.”