Nina Galbiati, Norges Bank’s global lead sustainability for real estate, was a guest on a special episode of Nareit’s REIT Report podcast.
Norges Bank is a long-term investor that has roughly 4.1% of their global investment portfolio invested in real estate, with about half of that allocated to public REITs. With the firm’s focus on maximizing risk-adjusted returns, Norges has been an influential leader in promoting the adoption of sustainability for real estate companies globally for many years.
On this episode of the REIT Report, Galbiati joined Nareit’s Senior Vice President of Environmental Stewardship and Sustainability Jessica Long to discuss how the real estate industry is addressing a key challenge of decarbonization planning and the importance of real estate companies in the U.S. clearly disclosing their strategy, decision making, and targets around key environmental matters.
“Real estate is facing tremendous pressure to decarbonize. This is partly regulatory pressure, but it’s definitely coming from a shift in demand from tenants as well as investors. We don’t think the current market valuation is pricing those risks adequately today,” Galbiati said.
The discussion also looks at how global investors in real estate are engaging with investee companies to align their portfolio with the goals of the Paris Agreement to limit global temperature rise to 1.5◦C – and how REITs face unique challenges.
Other topics include the progress being made toward defining net zero for the industry and how the CRREM Project in North America is a great opportunity for U.S. REITs to participate in the development of this global framework. The conversation also addresses the approach to assessing operational carbon, regardless of ownership or “scope,” the importance of energy efficiency alongside renewable energy, and the challenges to remain focused on decarbonization in the current economic environment.
