Real Estate

SUSTAINABILITY 

Striving to generate returns and integrate sustainability throughout our investment, asset management and financing processes where it may have a material impact on value and liquidity

Sustainability Policy
Sustainability Annual Report

SUSTAINABILTY STRATEGY ALIGNED TO FIDUCIARY RESPONSIBILTY​

Three pillars guide sustainability integration across the investment group’s equity and debt investment portfolios.​

Reducing Carbon

Reducing Carbon — focused on energy management and renewable energy provision to reduce operating expenses, improve net operating income and address the sector's significant contribution to global emissions. This priority is supported by the real estate equity group’s net‑zero goal to reduce operational carbon in landlord‑controlled spaces by 2050.1 

Enhancing Resilience

Enhancing resilience — building the capacity of assets to withstand catastrophic weather events, such as flooding and wildfire, and aligning with regulatory environments increasingly geared towards a low-carbon economy, to ensure continued usability and liquidity.

Building Value

Building value — engaging to achieve tenant and borrower satisfaction through proactive service quality, operational efficiency and health and wellness, creating more productive spaces and improving asset performance.

EMBEDDING SUSTAINABILITY ACROSS THE INVESTMENT LIFECYCLE

Acquisition / Financing

Due diligence process with detailed scope and defined risks.  Investment-critical sustainability factors are presented to the investment committee using a traffic light prioritisation system, with mitigation measures identified, priced and capital expenditure explicitly underwritten within the financial analysis.

Active Asset Management 

Sustainability improvements are planned and tracked through detailed Investment Plans on the Sustainability as a Service (SaaS) platform, aligned with sustainability and return objectives of the fund.  Progress is actively monitored and energy and carbon impacts tracked.

Loan Monitoring

Sustainability covenants in standard loan documentation and any investment critical risks, linked to deferred maintenance reserves or post-closing obligations, are monitored throughout the loan

Development/Refurbishment 

Targeted to high level green building certifications and energy ratings. In Europe, a three-ambition level Sustainable Construction Framework allows the integration of proportionate sustainability to maximize returns. 

PGIM Real Estate’s EU Alternative Investment Fund Managers (AIFMs) comply with Article 4 of the EU Sustainable Finance Disclosure Regulation (“SFDR”). To view our firm-level PAI disclosure, please click here.

Click here to learn more about:

  • Principle Adverse Impacts – Investment Due Diligence Policy
  • Sustainability Risks Policy
  • Summary of Remuneration Policy

*Since 2010, PGIM Real Estate has invested over $5 billion in the United States and Europe in real estate with impact characteristics which includes investments in affordable housing, low- and moderate-income areas and in real estate that has environmental benefits such as green certifications or remediation of contaminated sites.

1Real estate equity net zero goal aligns with ULI Greenprint’s Net Zero Carbon Track.