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CRE Lagging in Green Governance

Green still not a governance issue for real estate firms, report says.

By Debra Hazel | Updated on December 19, 2008

Real estate companies have a long way to go in terms of corporate governance practices regarding climate change, according to a new report commissioned by Boston-based investor group Ceres, and authored by RiskMetrics Group. While technology companies ranked high, development and property management firms lag behind.

IBM was the highest ranked company, with a score of 79–out of a possible 100– followed by Tesco with 78, and Dell with 77. Yet the highest-ranked real estate firm, Simon Property Group, scored 37. Real estate as a sector averaged just 27 points, tied with travel and leisure, and 10 ahead of the lowest-ranked sector, restaurants.

Given the extensive portfolios of real estate companies, the result is surprising, the report said. Buildings account for more than 40% of greenhouse gas (GHG) emissions, giving developers and property managers a real opportunity to make a significant difference to the environment and their own businesses.”This could be a real product differentiator for them,” said Doug Cogan, lead report author of New York City-based RiskMetrics at a press conference discussing the report.

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