Hallgjerd Caroline Jüngling, Senior Manager Corporate Development & Governance Real I.S. AG
The real estate industry has a key role to play in achieving the European Union's goals of becoming climate neutral by 2050. After all, buildings account for more than one-third of greenhouse gas emissions and 40 percent of energy consumption in the EU. Making a difference has become all the more urgent, also due to more stringent regulation and disclosure requirements, as well as the growing importance of sustainability in all the manifestations of ESG criteria among all market participants. This is because these criteria are playing an increasingly important role not only for investors, fund service providers and real estate companies, but also for tenants. Accordingly, the industry is seeking solutions to advance the issue of sustainability – also for a sustainable investment that retains its value. Some progress has already been made, but there are still complex challenges on the decarbonization path. At the same time, these challenges present a great opportunity to realign processes in a more innovative way.
But where is the best place to start? A precise analysis and an inventory are always the starting point. A key issue here is to manage data effectively. Only if you know where you stand can you assess the need for action and investment on the road to ESG compliance and initiating adequate measures. Of prime importance is the willingness to take responsibility, craft suitable strategies, set clear goals, take the initiative and to exploit available opportunities.
Real I.S. creates transparency with sustainability report
We at Real I.S. take our responsibility seriously. Sustainability and climate protection are very important to us, and we have anchored sustainability as a key part of our mission statement. We have now summarized how we shape sustainability, where we stand as a company, what goals we have set ourselves and the measures we have already initiated in a sustainability report that we recently published. We place great emphasis on formulating our sustainability targets and ESG strategy. For example, we aim to achieve climate neutrality as a company by 2030. In the area of general electricity, the real estate portfolio is to be climate-neutral by 2023. The German portfolio is to achieve climate neutrality by 2045 and the entire portfolio by 2050.
By signing the United Nations Principles for Responsible Investment (UN PRI) and the UN Global Compact (UN GC) initiative, we have committed to regular reporting on the progress of our ESG measures, among other things. For us, this is not just a matter of fulfilling our obligations. We are proud to have already achieved important steps on the way to greater sustainability.
Our sustainability milestones
The structured implementation of sustainability in all corporate processes based on ESG criteria is permanently changing the way we do business. In fact, we started thinking and acting sustainably at an early stage and have therefore already been able to deliver good results today.
We manage a large number of certified properties in our portfolio and have plans to certify further buildings. We have changed the energy contracts for our office in Wiener Strasse in Munich and have been using exclusively green electricity since 2021. We are in the process of analyzing all the properties in our portfolio to identify which of the properties held already meet the Paris climate targets and our in-house ESG scoring, or which fall short or will fall short in the coming years. Among other things, we use the Carbon Risk Real Estate Monitor (CRREM), an analysis tool of the European Union, also as part of the due diligence process when purchasing properties and in risk management. In addition, we have developed our own scoring model that, together with an energy audit, allows us to make statements about detailed consumption, the structural condition of the properties and their system technology, and other ESG characteristics. From this, we can derive which measures can be initiated with which investments during which timeframe in order to make buildings more sustainable. This is an extremely important basis for setting carbon reduction targets and suitable measures – in line with our investment strategy and respective property strategy.
We deploy innovative technologies, in some cases through harnessing artificial intelligence, to reduce energy consumption, lower greenhouse gas emissions, and forge ahead with further ESG measures envisaged. We continue to develop, both at corporate and at product levels, and already offer our investors five sustainable funds in accordance with Article 8 of the Disclosure Regulation. We are also actively contributing to advancing sustainability across the industry, including by supporting the industry initiative ECORE (ESG Circle of Real Estate) and the real estate association ZIA.
To move ahead with our goals and commitment, we have also strengthened our team and created a new position in the area of sustainability. Giulia Peretti has been our Sustainability Officer tasked with coordinating all ESG topics since June 2021. This marks another milestone, not only in developing our own company, but also in creating sustainable value added for society and the environment while living up to our responsibility in the industry.
CONCLUSION: Implementing sustainability consists of various dimensions at Real I.S. The process entails transformation, technologies and transparency: Transformation and further development takes place in our company, in our products, in real estate and in processes. We deploy technologies to save energy, reduce carbon emissions and collect data that is not yet standard in the real estate industry. We create transparency through our own sustainability report. This is available at the following link (German only) and sets out details of our ESG targets and measures: Sustainability Report