Nuveen launches investment fund for emission reduction in real estate

Asset management giant Nuveen confirmed today it has launched a new investment vehicle aimed at reducing emissions in real estate, the Global Real Estate Carbon Reduction fund. 

Classified as Article Nine (impact) under the EU’s Sustainable Finance Disclosure Regulation (SFDR), the fund's strategy aims to provide long-term gains by investing in real estate companies that have either achieved carbon neutrality, or have a target to or track record of reducing greenhouse gas emissions in a manner that is aligned with the Paris Agreement.

Ben Kerl, head of real estate investments at Nuveen, said this morning that “global carbon emissions are on track to increase temperatures by 4-5°C, leading to likely catastrophic effects on the world as we know it." 

He explained: "Buildings are thought to be responsible for approximately 40% of global carbon emissions, a figure we believe could be hugely reduced by implementing creative plans to reduce emissions."

Kerl stressed that “we believe companies that are committed to these plans have the potential to deliver superior long-term returns as a result of reduced future financial liabilities, better pricing power for assets by appealing to a larger pool of tenants, and superior access to debt and equity capital.”

The strategy joins Nuveen’s Article Nine Global Core Impact Bond, US Core Impact Bond, Emerging Markets Impact Debt and Global Clean Energy Infrastructure Impact strategies.

Earlier this month, Nuveen was confirmed as the anchor investor for an impact bond called Barbados Blue Bond.