Our real estate investments continue to position ESG as integral to wider investment strategies. At the core of the approach is our goal to preserve and enhance risk-adjusted returns, and to reduce environmental risk, improve asset efficiency, and deliver high-quality spaces to tenants.
Accordingly, we have developed a governance structure and policies that embed ESG considerations into real estate investments. Our US and European Strategy Councils for Direct Real Estate are made up of senior leaders from the real estate business, supported by dedicated ESG teams. Together, they have developed ten ESG objectives, aligned to Deutsche Bank’s six core values.
The Council’s global sustainability plan is delivering a number of initiatives, including:
- centralizing and expanding sustainability data collection and reporting to monitor our energy and carbon footprint globally;
- adopting Standards of Sustainability for property management in the US, the UK, and France (we are beginning to introduce them across the rest of Europe); and
- a systematic approach to energy reduction in the US.
At an asset level, we continue to strive to reduce our energy and carbon footprint and further improve the ESG performance of our assets. For example, we:
- grew green label assets under management globally to €9.25 billion;
- achieved a goal of 3% in energy reduction across our US office portfolio6 and
- invested US $2.3 million in energy efficiency projects in the US, garnering a return on investment of 23% over the year (measurement period: 3Q 2015 – 3Q 2016).
In 2016, we changed the process and methodology by which we classify our green label assets, which resulted in an inclusion of more certified assets relative to previous years. An example of a change made since the previous year was the inclusion of assets with ENERGY STAR certifications in the US.
Our real estate funds include properties that have been green labeled by organizations such as Leadership in Energy and Environmental Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM), ENERGY STAR or other equivalent certification.
Furthermore, we submitted five of our largest real estate funds to be independently assessed for ESG integration by the Global Real Estate Sustainability Benchmark (GRESB). All five funds (worth US $18 billion of AuM) achieved the Green Star-rating.
Deutsche Asset Management’s infrastructure business conducts ESG due diligence for each acquisition. After acquisition, Deutsche AM infrastructure closely monitors the ESG attributes of the investments during the holding period, through quarterly reporting.
We report annually to investors in our Pan-European Infrastructure Fund (PEIF) about the ESG developments in the Fund’s underlying investments. We will provide a similar report to investors in our Pan-European Infrastructure Fund II, the follow-up fund.
4 Given timing of end of year data availability, the measurement period for this data is January 1, 2015 – December 31, 2015.