The extensive global sustainability program reaches all levels and addresses all players on a global scale: new investments and Allianz’s historic portfolio, direct, indirect and financing; and partners, tenants and own operations / To help the firm meet its carbon emissions and energy efficiency targets, Allianz Real Estate is utilizing independent CRREM and GRESB data and benchmarking tools is in line with initiatives such as the SBTi the Net-Zero Asset Owner Alliance / The firm has identified a first wave of 57 directly held assets that will be redeveloped and upgraded over the next three years to fit new standards
Allianz Real Estate, the dedicated real estate investment manager within the Allianz Group and one of the world’s largest investors in real estate, is targeting a reduction in carbon emissions from its global portfolio of 25% by 2025. The decrease is part of the firm’s wide-ranging and extensive global sustainability program initiated in 2019 and supports Allianz Real Estate’s overall aim to be carbon net-zero by 2050.
Dr. Raphael Mertens, Chief Risk Officer at Allianz Real Estate
“We consider it as highest priority to reduce the carbon footprint of all our assets and fight global warming. A reduction of emissions in the real estate sector – which accounts for approximately 40% of global greenhouse gas emissions – will have a considerable impact on global decarbonization. Our position, size and influence allows Allianz Real Estate to lead by example. As such, we have developed one of the most ambitious and comprehensive sustainability and ESG transformation programmes in the real estate sector,” said Dr. Raphael Mertens, Chief Risk Officer at Allianz Real Estate.
“For some time now, our acquisition process has ensured high standards of sustainability for new direct assets, the next milestone on our journey to transition to a net zero world is to reduce the carbon footprint of our portfolio as a whole by 25% over the next five years. As a responsible business, we aim at reducing this footprint while providing a transparent, measurable impact in the fight against global warming.”
To help the firm meet its carbon emissions and energy efficiency targets, Allianz Real Estate is utilizing independent Carbon Risk Real Estate Monitor (CRREM) and GRESB (Global Real Estate Sustainability Benchmark) data and benchmarking tools to underpin its sustainability program. This means that investments are analyzed and reported against CRREM’s decarbonization pathways which are also aligned with the Paris Climate Goals of limiting global temperature rise to 2°C, with ambition towards 1.5°C.
The global program is also in line with a number of high-profile initiatives such as the Science Based Targets initiative (SBTi) and the Net-Zero Asset Owner Alliance (AOA), the latter of which is also using CRREM. The program is also compliant with EU Taxonomy requirements, a classification system of sustainable economic activities.
“We strongly believe that CRREM is the best methodology with regards to real estate carbon emissions and benchmarking. It takes a dedicated, highly scientific and independent approach, and it is well perceived by internal and external stakeholders,” said Dr. Raphael Mertens. “As the managers of a global portfolio, we maintain global standards whilst taking into account local benchmarks such as the UK Green Building Council or the Energy Star system in the U.S.”
Overall, Allianz Real Estate’s program has four key elements: Assess; Improve; Engage; and Own Operations. Assess is focused on evaluating the firm’s current global portfolio – as well as new acquisitions – against a range of sustainability benchmarks and criteria such as CRREM. During the acquisition phase, we place a particular focus on acquiring buildings that reach our high sustainability standards or including retrofitting plans to ensure they meet those standards within a two year period.
Improve is a decarbonization program aimed at redeveloping and refurbishing existing assets to also meet new standards. As long term investors this is particularly important to us and consideration is given for CAPEX spent on sustainability measures during the periodic review of each of our assets.
Through Engage, Allianz Real Estate is committed to working with key stakeholders such as business partners, suppliers and tenants to help improve sustainability across its network and wider ecosystem. And under Own Operations, we will assess and improve our own buildings and business processes in areas such as energy consumption, paper consumption and business travel. The first step with this was a detailed global audit undertaken in 2019 that enables us to measure these improvements, ensuring we are in a good position to monitor progress over time.
Dr. Raphael Mertens said: “We have prepared ourselves and set up the necessary measurement framework for much of the past two years and are in a very strong position to now execute our ESG strategy. We will start by focusing on our 100% owned assets were we have identified the first 57 assets that will be redeveloped and upgraded over the next three years. The majority of these assets are in Europe because a significant portion of our U.S. and APAC portfolios are part of joint ventures or indirect holdings so we will engage with our partners to enact change where possible.”
“Our sustainability program is bold but necessary. It will be a highly complex process involving hundreds of buildings and multiple stakeholders spread over many years. We are taking tangible steps to reduce our carbon footprint and develop healthy buildings for the environment and the communities that live and work in them,” added François Trausch, CEO at Allianz Real Estate.
“Our primary focus is on carbon emissions and energy efficiency but we are looking at social and wellbeing standards across the portfolio and are committed to continuously developing our approach to ensure that our own ambitions evolve as the understanding of what is important for the environment and society changes over time. The real estate industry has a considerable part to play in the fight against climate change and Allianz Real Estate, given our size, has a major part to play in the sector.”
