Tackling the growing pressure to meet decarbonisation goals in private markets

Fund managers in various private market sectors share how the asset classes are approaching decarbonisation

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  • Simone Pozzato
    Real estate
    Simone Pozzato, senior managing director at Hines and fund manager for the Hines European Core Fund (HECF).

    ESG, and particularly decarbonisation, is now not just a matter of corporate and regulatory responsibility but a commercial imperative for real estate investors. 

    Decarbonisation in particular is so important because it’s so highly correlated to financial performance. When done right, it delivers efficiency for occupiers and additional income opportunities for investors. 

    Occupiers are also engaged in this conversion as most of them are committed to become carbon neutral in operations in the next 10 or 20 years. 

    An example of this is aer, an office complex in Munich we acquired in 2020. The assets comprise more than 938,000 square feet and has undergone a comprehensive refurbishment, transforming into a high-quality office-led, mixed-use scheme that addresses both the E’ and ‘S’ of ESG. A ‘meanwhile use’ concept co-created with the community as a social, cultural, educational and artistic meeting place for citizens throughout Munich. It welcomes 250-700 visitors per day and has a community kitchen that focuses on sustainable use of food stemming from edible food waste to create appealing meals at affordable prices.

    The project is using various measures to reduce the carbon emissions of the scheme including biodiversity and carbon sequestration on roof terraces and green areas. aer obtained 100% of its energy from renewables, with plans underway to harness further geothermal and solar energy to deliver emissions savings equivalent to the carbon storage capacity of >700,000 trees. Additional social value is delivered through hosting workshops and site tours with the local community, as well as on-site exercise areas and an urban garden to support wellbeing. 

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