Australian real estate funds, firms lead green rankings

London, 28 January: Most real estate funds and companies are not yet actively managing their environmental impacts, according to a report commissioned by three European institutional investors.

However, Australian property firms and funds stand out for their green policies and implementation, leading the Environmental Real Estate Index released today.

Australia’s GPT Group achieved the highest ranking in the index, with 83 out of 100 for management and policy, and 89 out of 100 for implementation and measurement. “Our wholesale funds have also been recognised in the report as private funds with the world's best environmental management practices,” said GTP’s CEO Michael Cameron.

APG Asset Management, PGGM Investments and the UK’s Universities Superannuation Scheme commissioned the survey of 700 property fund managers and companies. The 198 that responded were scored out of 100, based on their environmental policy and implementation.

“Property investors do not necessarily walk their environmental talk: a substantial percentage of the respondents score higher on environmental management and policy than on the actual implementation of these policies,” the report adds. For example, Vornado Realty Trust in the US scored 83 for its environmental policies, but 37 out of 100 for implementation.

On average, Australian, British and Swedish funds and companies had the highest rankings, with a showing “substantially stronger than the performance of investors located in Asia, the US, and southern Europe”, the survey found.

“Australia's the world's benchmark when it comes to green performance,” said Piet Eichholtz from the European Centre for Corporate Engagement at Maastricht University, which carried out the research. Although the full rankings in the index have not been disclosed, the report does name the top three ‘green stars’ in each region, both for publicly listed and unlisted firms and funds (generally listed firms scored higher than those privately-held).

As well as GPT, top scorers include the Big Yellow Group in the UK, scoring 83 out of 100 overall, and Stockland in Australia, with 81 out of 100. Vornado Realty Trust was the highest scoring US fund or firm in the index, with 55, showing the wide divergence in performance in different regions.

“Most funds allocate close to 10% of their portfolio to real estate assets," the report says. "However, information on the environmental performance of real estate investments is scarce, since only a handful of property management companies pro-actively deliver metrics on environmental performance. Moreover, so far, institutional investors have not demanded such information."