A new analysis by Van Lanschot Kempen Investment Management reveals that only 15% of listed real estate companies globally have set comprehensive net zero targets for scope 1-3 greenhouse gas (GHG) emissions by 2050.
This figure, though up from 10% last year, indicates that accelerated action is necessary for the industry to meet net-zero ambitions.
The report, which represents 92% of the total listed real estate market capitalisation, approximately $2 trillion worth of real estate, shows slow progress in setting GHG emissions targets. Only 51% of companies have set a goal to reach net zero GHG by 2050, up from 40% last year, leaving nearly half without publicly stated targets.
In Europe, 31% of listed real estate companies have set net-zero targets on all three scopes, leading against 14% in Asia and 8% in North America.
The report highlights Europe’s supportive policy landscape as contributing to its lead.
The analysis also shows a notable rise in board-level oversight for GHG emissions targets, from 21% in 2021 to 34% in 2022, with a similar increase in companies linking emissions targets to board compensation.
Despite some progress, the majority of companies still report only on scopes 1 and 2 emissions, with a smaller proportion (20%, up from 15% last year) reporting across all three scopes with external verification.
Egbert Nijmeijer, co-head real assets, said, “Limited progress has been made by the listed real estate sector in setting greenhouse gas emissions targets and measuring progress. However, while we believe that externally verified measurement of Scope 1-3 emissions is the best way a company can get a true picture of its environmental impact, the complexity of the real estate value chain presents significant challenges to achieving this.”
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