The upgrade of the Sustainability Working Group to a full committee is a sign of INREV’s commitment to emphasising the importance of sustainability in the non-listed real estate investment industry. Its aim is to improve the dialogue between investors and fund managers to increase knowledge and to drive a better understanding of the relevance of sustainability.
One main consideration for the committee is to concentrate not only on the environmental aspects of sustainability but also to incorporate social factors such as labour rights, the creation and safeguarding of jobs and induced spending in the surrounding area. “Social sustainability is the most difficult aspect to quantify but we know that looking at the broader impact of our investment is part of responsible investing,” says Mathieu Elshout, Chairman of the Sustainability Committee and Senior Investment Manager with PGGM.
One barrier to integrating sustainability into the investment process has been the low level of education and training within the industry. To begin to overcome this, the committee recently organised the webinar “Why sustainability investments are green to go”. This outlined the topic of sustainability from a life cycle perspective, focusing on the topic at a vehicle level, and offering an overview of social and ecological sustainability. “The high level of attendance and the number of questions raised at the webinar showed the strong interest from the industry,” said Elshout.
However, he acknowledges that there is still some way to go. “Sustainability has been on INREV’s agenda in the last few years and there is enthusiasm to incorporate sustainable practices, but until a firmer link is established with financial performance, investors may continue to see a conflict with their fiduciary responsibilities,” said Elshout.
Looking at the broader impact is part of responsible investing
The committee plans to help this by supporting education and research in this area including publishing academic work on the topic. In addition, it plans to update and refine the INREV Sustainability Reporting Recommendations and provide best practices, case studies and examples of sustainable investments to show the impact on returns. “Having the mandate of a full committee has further increased the members’ enthusiasm to putting our plans into action. We welcome feedback and ideas from other members,” he said.