The property sector is responsible for approximately one-third of global greenhouse gas emissions and 40% of global energy consumption. This development drives growing interest from global real estate investors to integrate sustainability into their investment process. To close this gap, Carbon Care Asia (CCA) has partnered with Solactive to launch the Solactive CarbonCare Asia Pacific Green REIT Index, the first index of its kind to allow investors to identify companies which demonstrate strong sustainability performance and commitments to meet the carbon reduction targets set out in the Paris Climate Agreement.
According to a 2019 survey by the UNEP Finance Initiative, 83% of the respondents have experienced an increase in demand for sustainability performance disclosure, and according to the International Finance Corporation, the green building market represents a USD 17.8 trillion investment potential in East Asia Pacific and South Asia. The Solactive CarbonCare Asia Pacific Green REIT Index aims at allowing these investors to engage with green real estate investments.
The Solactive CarbonCare Asia Pacific Green REIT Index is a rules-based index and includes Asia-Pacific REITs that own the highest percentage of green-certified buildings in their portfolio and which are committed to climate-aligned emissions reduction targets. Additionally, the index applies weights to reward best practices and industry climate leaders in Asia-Pacific. The weighting methodology on securities is based upon a combination of factors such as the percentage of Certified Green Building Area owned; or a commitment to a Net Zero Emissions (NZE) target no later than 2050 or a Science-Based Target (SBT).
As of 23 November 2020, the index holds 56 REITs, with a weighted average yield of 4.3%. The index is quoted in USD and calculated as a total return index.
Albert Lai, CEO of Carbon Care Asia, commented, “Many of the most precious properties in Asia are located in cities vulnerable to sea-level rise and extreme climatic events. This index serves as a valuable tool for investors to differentiate climate-conscious REITs which can protect their assets better from future shocks, from the rest of the pool.”
Timo Pfeiffer, Chief Markets Officer at Solactive, said, “We are pleased to cooperate with Carbon Care Asia again to launch another first of its kind index – an innovative sustainability REITs index for the Asia Pacific region. We are convinced that carbon-conscious investors that seek to invest for income amidst a globally low-yield environment will find this REIT index suited to their needs.”
Water Cheung, Chairman of Carbon Care Asia and Senior Partner of StormHarbour Securities, added, “Property is a dominant part of many Asian economies, often also the number one user of energy. The greening of buildings will become a central plank of national agendas on our low carbon future. Investors that position themselves ahead of the game in the move to low-carbon, energy-efficient buildings will face lower risks and higher returns.”
Solactive CarbonCare Asia Pacific Green REIT Index:
A virtual press briefing was held by CCA and Solactive to announce the launch of the Solactive CarbonCare Asia Pacific Green REIT Index. Conducting the briefing are (from top left) Ir Albert Lai, CEO, Carbon Care Asia; Mr Water Cheung, Chairman, Carbon Care Asia; Mr Steffen Scheuble, CEO, Solactive AG; (from bottom left) Ms Lan Xing, Associate Director in Sustainable Finance, Carbon Care Asia; Ms Lorène Delhoume, Senior Sustainability Analyst, Carbon Care Asia; and Mr Jason Zeall, Vice President, Business Development, Greater China, Solactive APAC Ltd..
Solactive is a leading provider of indexing, benchmarking, and calculation solutions for the global investment and trading community. Headquartered in Frankfurt, and with offices in Hong Kong, Toronto, Berlin, and Dresden, we innovate and disrupt the status quo as the partner of choice for our clients.
The unique blend of our 250 staff’s expertise in data, data science, financial markets, and technology enables our clients’ continued success through the delivery of a superior experience, unique customization capabilities, and the best value for money available in the industry. With more than 14,000 indices calculated daily, we offer a full suite of solutions, including market-leading ESG and thematic indices.
As of October 2020, Solactive served approximately 450 clients across the world, with approximately US$250 billion invested in products linked to our indices. Solactive is registered with ESMA as a benchmark administrator and is supervised by the BaFin.
Operating from Hong Kong and Singapore, Carbon Care Asia is a mission-driven consultancy in corporate sustainability, carbon strategy, climate competence and sustainable finance. CCA offers integrated solutions to manage risks and capture business opportunities whilst tackling sustainability challenges and responding to the climate emergency. Since its establishment in 2008, CCA has served over 250 Asian companies in pursuit of its mission to accelerate the transition to a net-zero carbon economy benefitting all.
CCA has partnered with Solactive to launch the Solactive CarbonCare Asia Sustainability Bond Index in December 2019, the first index of its kind in Asia.
The information in this description does not constitute tax, legal or investment advice and is not intended as a recommendation for buying or selling securities. Solactive and all other companies mentioned in this description are not responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission.