Article
Generating returns and doing good
Credit Suisse Asset Management Global Real Estate employs a holistic sustainability approach by integrating ESG criteria across the real estate life cycle.
June 18, 2020
The Global Real Estate strategy assumes optimizing the operation of buildings and purchasing CO2 certificates. A key component is to reduce CO2 footprints by continually improving energy efficiency and relying more on renewable energy sources whenever possible. A prime example of Global Real Estate's commitment and comprehensive approach to sustainability is an innovative, 100% CO2-neutral approach for selected investments.
“We take a two-pronged approach to pursuing this goal,” says Andreas Wiencke, Head of ESG Solutions and Strategic Projects at Global Real Estate. “One involves cooperation with Siemens to measure and analyze energy consumption and CO2 emissions of individual properties, which enables us to develop both short- and long-term strategies for cutting output. The second involves purchasing CO2 certificates to compensate for the remaining emissions, thereby achieving a measurable social and ecological impact aligned with our impact investing approach.”
Greater energy efficiency
Global Real Estate and Siemens Schweiz AG collaborate to achieve sustainable property management through energy optimization. Siemens conducts a systematic analysis of prospective investment properties to establish their efficiency potential and plan a first round of optimization measures. Comprehensive monitoring identifies further optimization possibilities throughout a facility’s lifecycle, which are then continually implemented. The focus is on minimizing energy consumption and CO2 emissions.
These operational measures have a proven track record of effectively slashing CO2 output. Global Real Estate has cut CO2 emissions across all investment vehicles by nearly 20% since 2010, making a substantial contribution to improving air quality.
Furthering SDGs – our impact in numbers
The development projects supported by Global Real Estate contribute to achieving a range of United Nations Sustainable Development Goals (UN SDGs) by making significant and measurable impacts in developing countries:
In 2019, Global Real Estate contributed to the Za Hung Hydropower Project in the Quang Nam province of Vietnam, designed to enhance sustainable energy production. Along with clean energy, the local community benefits from the creation of jobs and relief provided to households affected by flooding, which extends the positive impact of the project beyond ecological measures by fostering social and economic development.
In 2018, Global Real Estate purchased CO2 certificates to support the construction of 67 turbines at a wind farm in the Indian province of Madhya Pradesh. These turbines will produce energy to help meet the growing needs of India's booming economy while reducing reliance on unsustainable energy sources.
Social impact
Even with best efforts, some CO2 emissions are unavoidable. Global Real Estate strives for a climate-neutral real estate portfolio by purchasing CO2 certificates to offset the emissions that cannot be eliminated.
“Our impact investing approach shows ESG-conscious investors that we share their values,” says Ruth Schmeing, Portfolio Manager at Credit Suisse Asset Management. “We purchase CO2 certificates to support projects that make both a social and ecological impact in developing countries. This is how we demonstrate that doing good and generating financial returns can go together.”
Each year, Global Real Estate identifies one development project that promotes environmental, economic and social goals. The costs of the certificates do not affect investors’ returns. Global Real Estate’s commitment to doing good encompasses a range of initiatives improving the lives of communities by developing health care and sanitation facilities, supporting students and schools, and enhancing public greening.
Risks
- Performance risk: Unforeseen developments on the interest rate, currency and real estate markets could adversely affect returns on real estate investments.
- No capital protection: Investors may lose some or all of their invested capital.
- Economic risk: Unforeseen economic developments may influence real estate valuations and market prices.
- Construction risk: The construction and renovation of buildings contain inherent risks.
- Credit risk: Tenant defaults are possible. Accordingly, heavy emphasis is placed on the broadest possible diversification.
- Liquidity risk: Liquidity in the real estate market is limited.
Global Real Estate
Credit Suisse Asset Management is a leading provider of real estate investments.
Our broad array of real estate solutions spans a range of geographies and
investment types.
Our broad array of real estate solutions spans a range of geographies and
investment types.