Principal Real Estate Investors puts the focus on green investing
Principal is committed not only to delivering positive financial outcomes for our clients, but also positive environmental outcomes. This mindset runs throughout our organization and investment management groups—particularly our dedicated real estate group, Principal Real Estate Investors.
In 2014, three Principal Real Estate Investors funds received the Green Star designation from the Global Real Estate Sustainability Benchmark survey. Real estate publication, Commercial Property Executive, also recognized the group as one of the greenest real estate companies in the United States. Most recently, Principal Real Estate Investors received a performance band score of “A” by earning 47 out of 51 points in the United Nations Principles for Responsible Investment (UN PRI) 2015 Assessment released July 2015.1
Pillars of Responsible Property Investing (PRPI) initiative
This focus on responsible property investing is supported in part by Principal Real Estate Investors’ Pillars of Responsible Property Investing (PRPI) initiative. Established in 2013 and built off of previous sustainability efforts, PRPI outlines a commitment to incorporating environmental, social, and governance issues into real estate investment practices.
It adheres to three real estate investment and management “pillars”:
Reinforcing the social and economic vitality of markets where the group does business through equitable contracting practices, job creation, and a focus on healthy and productive buildings.
Managing risk and meeting investor objectives through integrity, transparency, and managerial oversight.
Improving each building’s competitive stature, reducing costs, and delivering enhanced financial and environmental performance through operational best practices and reduced energy, water, and waste consumption.
The advantages of green investing
In The Strategy Behind Green Investing, Principal Real Estate Investors explains how significant financial value, reduced risks, and competitive advantages can be achieved through following environmental, social, and governance practices in real estate.
For example, filtering property investment decisions through the lens of sustainability not only benefits the environment by reducing carbon emissions and water consumption, but also potentially improves investment performance by decreasing building utility costs and increasing asset value.
Real commitment, real results
Through the PRPI initiative, Principal Real Estate Investors has implemented environmentally responsible property investing practices including:
- Ongoing measurement and monitoring of energy consumption, water usage, and waste removal
- Careful resource management to reduce environmental impacts while lowering costs
- Conducting sustainability site assessments to identify additional energy efficiency opportunities
- Implementing sustainable building projects and environmentally friendly industry best practices
- Encouraging active collaboration and engagement among stakeholders
The group also strives for green building certifications, namely Leadership in Energy & Environmental Design (LEED)® and ENERGY STAR™, throughout their real estate portfolio.
This commitment to sustainability has paid off in multiple ways. Principal Real Estate Investors has:
- Monitored energy consumption in more than 200 buildings
- Achieved LEED or ENERGY STAR certifications on 71 of their office building assets, representing 69% of the total square footage of their office portfolio
- Avoided 64,000 tons of greenhouse gases since 2009—equivalent to emissions from 13,400 cars2
- Saved nearly $20 million in energy costs since 2009, and $5 million in 2014 alone3
- Reduced energy intensity by 10% between 2009 and 20144
The PRPI program continues to build on past successes, and will keep evolving to meet the needs of the environment, the market, and stakeholders through 2015 and beyond.
To learn more about Principal Real Estate Investors’ responsible property investing efforts, visit the Responsible Property Investing website.
1 For Further details, please refer to the PRI Assessment Methodology, Principal Global Investors’ full Assessment Report and Transparency Report, all of which is available upon request.
2 US EPA, Greenhouse Gas Equivalency Calculator, http://www.epa.gov/cleanenergy/energy-resources/calculator.html
3 Estimated incremental increase in asset value is calculated with a 6.5% capitalization rate applied to the estimated rate of annual costs avoided. Avoided costs are generally calculated as the difference in normalized energy consumption between the time a building entered the PRPI initiative and the current time period, multiplied by the local energy rate.
4 Measurement baselines may vary for individual buildings due to acquisition date or data availability. The measurement of 10% below baseline energy intensity is calculated by comparing the properties in the portfolio in Q4 2014 to the same properties at their respective energy baselines.