The United Nations has established a working group to bring socially
responsible business principles into the sphere of property
investment.
The Working Group on Responsible Property Investment, set up by the UN
Environment Programme Finance Initiative last month, will work with
institutional investors to help them manage property with greater
regard to areas such as energy consumption and the use of premises by
local communities. Paul Clements-Hunt, head of Unepfi, said
institutions that invest in real estate ‘need to follow the same trend’
on social responsibility as found in other investment classes.
The group will be co-chaired by Jean-Pierre Sicard, head of sustainable
development at the French state bank Caisse des Depots and Paul
McNamara, director of real estate company Pruprim. Its members will
include AXA, Calvert, F&C, Hermes, Land Securities, Lend Lease and
Morley Fund Management.
In a separate move in the US, a group of investors and property
specialists are to meet in New Orleans this month to discuss how to
increase investment in responsible real estate. They will do so as part
of the Responsible Property Investing Project set up by Boston College
in February 2006, in which Calpers, Calvert and Domini Social
Investments are involved.
David Wood, senior research associate at Boston College’s Institute for
Responsible Investment, who co-ordinates the project, said SRI funds
are often underweight in real estate. The opportunities for
institutional investors have also been overlooked, he said, even though
energy-efficient and affordable housing, for example, represents a
‘natural investment prospect’ for socially-mandated state pension
funds. Two such funds – Calpers and the California State Teachers
Retirement System – recently set a goal of reducing energy use in their
200 million square feet of real estate holdings by a fifth over five
years. Calpers’ investments policy covers low-income housing.
Wood said one priority will be to develop performance indicators on the
social and environmental impacts of real estate applicable to all
investors.
