Principal Real Estate Investors fund strategies score highly with GRESB for advancements in ESG program initiatives
Principal Real Estate Investors announced today that two of its private equity property strategies and a European core property strategy managed by one of its European affiliates received 4-star ratings in 2020 from GRESB, the global ESG benchmark for real estate assets. The ratings exhibit Principal Real Estate Investors’ commitment to integrating environmental, social, and governance (ESG) standards into its investment practices while pursuing positive financial results for clients.
This is the fifth consecutive year the core and core-plus private real estate equity strategies have earned a 4-star rating from GRESB and scored in the top 15 of their peer groups. The Principal European Core Property Strategy captured a 4-star distinction for the first time after increasing its 2019 GRESB score by 37 points.
The 4-star rating means all three strategies are in the top 40% of GRESB participants worldwide.1
“Our strong GRESB performance demonstrates the success of our ESG program and an ability to apply ESG lessons learned to new fund strategies, resulting in high impact improvement,” said Jennifer McConkey, senior director of operations and sustainability for Principal Real Estate Investors. “We are continuously evolving our program to stay on top of the latest ESG developments in the real estate industry, and our GRESB results show our continued leadership in this important area.”
In total, all six of the strategies Principal Real Estate Investors had assessed by GRESB scored well under newly revised methodology. One strategy received the same score as it did in 2019, three increased their scores by an average of 29 points, and two others earned positive marks as first-time submissions.
“Despite GRESB scoring changes that were predicted to decrease the scores for all participants, all our strategies increased or maintained their GRESB scores,” McConkey said.
Principal’s three, 4-star strategies outperformed the peer average in every scored category for management. Both private real estate equity strategies received full points in six categories overall—three from management (leadership, policy, and reporting) and three from performance (risk assessment, targets, and data monitoring and review). The European core property strategy scored perfectly in policies, reporting, and data monitoring and review.
These high marks can be attributed to Principal’s overarching ESG framework called the Pillars of Responsible Property Investing. Effective in helping real estate investments demonstrate market resilience, corporate governance, and property performance, Principal has expanded this program to include nearly 100 industrial properties in the United States this past year while also completing climate risk assessments and integrating lending efforts into ESG practices. Two additional initiatives in both the U.S. and Europe have been concerted efforts to reduce utility consumption (by gathering and verifying property-level utility data) and to increase the number of sustainability certificates and technical assessments per property.
Each year, GRESB assesses and benchmarks the ESG performance of real assets worldwide. More than 1,200 real estate portfolios reported to GRESB in 2020, covering more than 96,000 assets and more than US $5.3 trillion in assets under management. The GRESB assessments are guided by what investors and the industry consider to be material issues in the sustainability performance of real asset investments and are aligned with international reporting frameworks, goals, and emerging regulations. Information on the 2020 GRESB Real Estate results can be found at GRESB.com.
1 The GRESB star rating is a relative score that ranks all GRESB participants worldwide, broken up into quintiles. Therefore, a GRESB 4-star score indicates performance within the top 40% of all participants.
About Principal Real Estate Investors
Principal Real Estate Investors manages or sub-advises $86.5 billion in commercial real estate assets (as of September 30, 2020). The firm's real estate capabilities include both public and private equity and debt investment alternatives. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.
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