Schroder Real Estate has published its pathway to achieving net zero carbon across its £17.4 billion of global real estate assets under management by 2050.
The publication of this pathway follows Schroders becoming a founding signatory to the Net Zero Asset Managers Initiative in December 2020, as well as the Net Zero Commitment Schroder Real Estate made in September 2019 as part of the UK Better Buildings Partnership Climate Commitment.
Real estate is widely considered to be responsible for 40% of global carbon emissions. Schroders commitment recognises its responsibilities as a real estate investor and the broader need to support the transition to a low carbon society.
Schroder Real Estate’s net zero pathway builds upon its integrated approach to sustainability within its investment process across both its directly invested real estate funds and indirectly, within its Capital Partners division.
This pathway aims to set and meet targets required as part of the Paris Agreement treaty on climate change to limit global warming to 1.5 ºC and achieve net zero carbon emissions.
The focus for direct real estate investments will be on reducing energy demand, increasing energy efficiency, and identifying opportunities for renewable energy generation, with consideration given to offsetting any remaining carbon.
Schroder Real Estate will ensure global low carbon regulatory requirements are met and considerations of climate risk and resilience are included in the pathway. This will span the full spectrum of a building’s lifecycle, including day-to-day operational carbon emissions, as well as those created during refurbishment and development.
Furthermore, for indirect investments Schroders will engage with the managers of externally managed funds and joint-venture partners to ensure they also adapt their approaches to meet net zero carbon targets.
Schroder Real Estate’s existing energy and carbon targets for its direct portfolios expire in March 2021, allowing new targets to be set in the context of its net zero carbon commitment.
Interim net zero milestones – expected to be scheduled for 2025 and 2030 – are being established to ensure assets are brought in line with the level of carbon reduction required to meet the Paris Agreement.
Sophie van Oosterom, Global Head of Real Estate, Schroders, commented:
“Schroder Real Estate’s overarching ‘Real Estate with Impact’ business strategy is focused on the four pillars of impact: People, Planet, Place and Prosperity. It is aligned with the United Nations’ Sustainable Development Goals and seeks to address social and environmental impacts across portfolios.
“ESG and specifically carbon responsibility is a significant and growing priority for our investors. It is important for us to provide transparency to all our stakeholders about our strategy and actions. Demonstrating the carbon profile and progress of our investments is core to this.
“The benefits of a net zero carbon approach are, of course, wider than the positive outcomes for our stakeholders. They are vital in supporting the transition to a low carbon society and, ultimately, a more sustainable future for everyone to share.”
Charlotte Jacques, Head of Sustainability and Impact Investment, Schroder Real Estate, commented:
“We believe our responsibility to our clients includes protecting them from the impacts of financial and non-financial risks. We also recognise our broader responsibilities to society and the planet. We therefore need to address the climate priority by reducing our emissions and transitioning to net zero.
“Schroder Real Estate’s commitment to net zero carbon by 2050 is a natural next step in our energy and carbon programme.
“Our activities range across the building lifecycle. We seek to continually improve the sustainability credentials of our investments through the active management of our assets, and have been working to reduce the energy consumption and greenhouse gas emissions of our landlord-controlled operations for over five years.”
Schroder Real Estate is one of Europe’s largest real estate managers with deep real estate expertise on the ground across real estate sectors. As part of Schroders Private Assets, Schroder Real Estate aims to deliver superior risk-adjusted returns, portfolio diversification and positive impact in investors’ portfolios.
For more information on Schroder Real Estate’s net zero pathway, please click here.
 As at June 2020 in the UK, Europe, and Asia, including commercial, hotel, and residential assets
 According to the International Energy Agency