Green Real Estate
Integrating climate risk into listed real estate portfolios
Real estate investing has historically lacked the appropriate tools to allow investors to assess their exposure to climate risk and to integrate it effectively in their investment strategies.
To help address this gap, the FTSE EPRA Nareit Green Indexes have been designed to allow investors to identify real estate companies with strong sustainability performance.
These indexes are a sustainability-focused extension to the FTSE EPRA Nareit Global Real Estate Index Series, with approximately US$341billion of assets tracking this leading series of listed real estate benchmarks1.
Expanding the toolbox, these indexes:
- Are a sustainability-focused extension to the FTSE EPRA Nareit Global Real Estate Index Series
- Draw on a geolocation dataset from GeoPhy, of over 15 million buildings to assess the sustainability characteristics of real estate portfolios
- Use FTSE Russell’s tilt methodology to adjust constituent weights based on green building certification and energy usage, significantly improving the climate and sustainability characteristics of the index
- Meet a variety of investor preferences, by offering an alternative version of the index, which focuses on limiting tracking error to the parent benchmark by minimizing active sector and country weights. This version also provides significant but more modest sustainability improvements
- Are managed in partnership with the European Public Real Estate Association (EPRA), and the US-based association for REITs and publicly traded real estate companies, Nareit
The FTSE EPRA Nareit Green Indexes provide investors with a useful tool for integrating sustainable investment considerations into their listed real estate portfolio. These indexes provide a sustainability-focused extension to the FTSE EPRA Nareit Global Real Estate Index Series, a leading series of listed real estate benchmarks. The FTSE EPRA Nareit Green indexes, weights constituents based on two sustainable investment measures; green building certification and energy usage.
1 Data as of December 31, 2017 as reported on April 2, 2018 by eVestment for institutional assets, Morningstar for retail mutual funds, insurance products, and ETFs, and additional passive assets directly collected by FTSE Russell.