A new report from Deutsche Asset & Wealth Management’s (Deutsche AWM) cites a 31 percent ROI as reason enough to keep investing in green building.
In its annual Environmental Social Governance (ESG) Strategy Update, the company highlights the 10 achievements and overall progress Deutsche AWM’s real estate investment business has made in implementing its ESG strategy.
The ESG strategy is defined by the business’ ability to preserve and enhance risk-adjusted returns and strengthen its investment process by reducing risk, improving efficiency and satisfying tenants.
“Accelerating environmentally and socially responsible investments in a manner that preserves and enhances risk-adjusted investment returns is a challenge that Deutsche AWM and Deutsche Bank are committed to meeting head-on,” said Pierre Cherki, Head of Alternatives and Real Assets at Deutsche AWM, which includes the real estate investment business.
The report also highlights the role Deutsche AWM plays in leading industry initiatives around sustainability and ESG in real estate including the ULI Greenprint Center, the Global Real Estate Sustainability Benchmark (GRESB), and the UN Environment Programme Finance Initiative (UNEP-FI) Working Group.
“We participate because decisions made by these groups today, regarding how the industry should address ESG, will lead to on-the-ground solutions in the coming years. In doing so, we are better positioning ourselves to deliver the best-in-class services and long-term investment performance that our clients demand from us,” added Cherki.
Deutsche AWM’s real estate investment business continues to sharpen its approach to ESG implementation after 10 years of thought leadership and achievements.
Its ESG activities are governed by a specific set of objectives that re-enforce the business’s focus on risk management, active asset management and thought leadership.
Deutsche AWM achieved a 31 percent return on investment for sustainability upgrade projects in the US and doubled properties certified with a “green label“ from 2012 through 2014.
In addition, the business adopted ESG checklists across regions for all direct real estate acquisitions.
Over the past two years the business has received three awards, coming from both the US and Europe, including a “Green Star” from GRESB.
Key trends cited in the 2014 Real Estate ESG Strategy Update include:
An increase in regulations requiring energy benchmarking, public disclosure, and in some cases, specific actions to improve the energy efficiency of commercial real estate. Currently, 42 percent of Deutsche AWM’s real estate investment business’ assets under management in the US are subject to disclosure requirements;
Globally since 2009, Deutsche has reduced energy consumption each year for assets where benchmarking is possible. From 2009 to 2014, the reduction among this portfolio was approximately 6.4 percent.