14 min read

Market Intelligence Report | January – March 2021


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Opinion: Attitudes to ESG is changing and rapidly, but is it resulting in quick enough action?

In short, no.  Although we are seeing some significant progress, the real assets and wider financial services sector needs to up its game if it wants to address climate change proactively – to protect and enhance value. Over the last year, we’ve seen lots of fanfare about financial institutions and intermediaries adopting ESG policies and practices. Over 500 new ESG funds have been launched. However, greenhouse gas emissions continue to rise in every sector. 

Public awareness of ESG has never been higher and there are no signs of it abating.  Furthermore, leading investment companies are making some significant commitments.  Many organisations have now either made net zero commitments are in the process of doing so.  Not just for their own operations, but for their portfolio of investments. We are witnessing a fundamental shift in capital, with Standard Chartered estimating that $1 in every $4 is now invested in ESG. Albeit in a wide spectrum of shades of green. 

However, we all have to recognise that this is just the start.  It’s all very well setting out goals to get to net zero by 2030, 2040 or even 2050, but as most know, this is just the beginning.  Progress must be addressed by action but, progress in this respect, is very slow. We don’t have a bottom-up understanding of the cost of this transition to net zero. These costs are hidden, and this could mean that assets are mispriced. 

So, what’s slowing us down? Below, we set out some key thoughts. 


It is [relatively] straightforward, to set net zero targets, particularly if the time horizon is 30 years out. Far off in the future, distant from a typical CEO’s tenure and most business and investment cycles. For those of us that understand the science behind net zero, we know that we have to get over halfway there in the next 10 years.  That means that the next step can get expensive.   

To progress, real estate fund and asset managers need to understand what can be done to transition to net zero.  To collect this information, evaluations and audits need to be completed. Yes, sample checks can be completed across big portfolios and this is a good way to start.  However, sooner or later, comprehensive assessment is required.  It is possible for portfolios (high value) to spend £200k + on assessments before even progressing.   

It’s a significant cost, and as real estate sustainability professionals, we must recognise this and also support our clients to explain reasoning and provide value solutions.  In the medium term there is no getting around this because net zero policy and regulations is inevitable.  Assessment to evaluate feasibility for improvement need to be completed.  Once done, results show even more costs. 

 So, what is the answer?  Clear transparent reasoning and progress. 


There is a lack of expertise.  At EVORA we recognise this. We are recruiting heavily and early.  However, there are a limited number of environmental engineers with real estate experience around – we, as an industry must upskill.  In simple terms, we need technically competent engineers and auditors who can find solutions, and real estate professionals who can understand enough to make informed decisions.  We also have to get over the professional language barrier.  Let’s face it ‘real estate professionals don’t understand the details of climate science and energy reduction and engineering professionals don’t understand real estate markets’. This is a barrier we need to recognise, accept and work together to overcome.  Open honesty is a good answer.   

Everyone should be prepared to explain.  ‘I am sorry, I don’t understand’.  What is simple to one person may not be to others. 


Whilst action is needed, as is reporting.  We have to reflect on the plethora of reporting requirements and the fact that corporate and fund level reporting can, well, get in the way.   

At EVORA we complete well over 100 GRESB submissions a year.  GRESB is an important reporting mechanism but it, along with many other schemes, takes time.  We don’t advocate removal of these schemes, but we do think we need to consider how to streamline and align, so reporting of one scheme supports the requirements of another.  Ultimately data, and the time taken to collect data sits at the heart of this problem.   

There are important attempts to standardise reporting, like the IFRS working group to harmonise global sustainability reporting for corporations. This brings together the SASB, FSB-TCFD, Value Reporting Foundation (SASB/IIRC), CDSB, WEG, GRI and CDP. It intends to report back on COP26 in November. We need to extend an initiative like this to incorporate real assets. 

Whilst it is no easy fix, we must look to speed up data standardisation and automation. 

 A final word on legislative drivers. 

Legislation is important, particularly when regulations are enforced.  Initiatives, like the EU Action Plan for Sustainable Finance, is undoubtedly helping to raise profile.  However, not uniformly.  If we take SFDR for example.  This piece of legislation has been introduced by the European Union in an attempt to remove greenwashing.  All organisations we talk to and have advised are taking this legislation very seriously indeed.  As they should.  However, legal guidance can differ – this is understandable because guidance is limited and only available in draft form.  

In summary, we are moving forwards, but if we are to address climate change in a way that protects our way of life, we fear it is not quick enough.   

Action, transparency and collaboration are the words of the year. 

Paul Sutcliffe, Executive Director 

Sonny Masero, Chief Strategy Officer 


Section covers the updates related to regulations, policy, and frameworks released by Government organisation like ECB, BOE, etc and/or Global Organisations such as GRESB, TCFD, PRI, UN, World Bank  

1.   Government level regulations

European Regulators Publish Guidance for Taxonomy– Aligned Disclosure under NFRD

Europe’s three primary financial regulatory agencies, the European Supervisory Authorities (ESAs) announced the publication of advice covering information to be provided by asset managers, insurers, banks and other institutions in order to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD). The ESAs include The European Banking Authority (EBA), The European Insurance and Occupational Pensions Authority (EIOPA), and The European Securities and Markets Authority (ESMA)

SEC Launches Climate Task Force

The U.S. Securities and Exchange Commission (SEC) announced the creation of a new Climate and ESG Task Force in the Division of Enforcement. The new task force will develop initiatives to proactively identify ESG-related misconduct, with an initial focus on identifying material gaps or misstatements in issuers’ disclosure of climate risks. The task force will also analyse disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies.

RBC: Sets $500 Billion Sustainable finance target

Royal Bank of Canada (RBC) announced a series of new climate and sustainable finance commitments, launched at the bank’s inaugural Environment, Social and Governance (ESG) Conference. RBC will mobilize $500 billion in sustainable finance by 2025, after achieving its $100 billion target in 2020

The European Parliament adopts Invest EU Programme 2021-207

The EU Parliament, with €26 billion set aside in the EU budget as a guarantee, InvestEU is expected to mobilise €400 billion to be invested across the European Union from 2021 to 2027

  • Sustainable infrastructure: €9.9 billion
  • Research, innovation, and digitalisation: €6.6 billion
  • Small and medium-sized enterprises: €6.9 billion
  • Social investment and skills: €2.8 billion

SEC: Acting Director proposes framework for future ESG rulemaking

John Coates, the acting director of the SEC’s Division of Corporation Finance, announced a proposed framework for considering new ESG disclosure requirements, recognizing that while the scope of ESG issues is very broad, specific ESG issues affect particular companies differently based on industry, geography and other factors.

SEC is inviting Public Input on Climate Change Disclosures

UK Budget 2021: Key climate and energy announcements

The most significant parts of this year’s budget for climate action, Sunak announced that the UK’s net-zero goal will be added to the remit of the Bank of England, having become part of the government’s overall “economic policy objective”. The budget promises that the government will issue its first “sovereign green bond – or green gilt” in summer 2021, a move it had already announced last November. At least £15bn in government debt will be specifically earmarked for supporting “green objectives”, with further details of how it can be spent coming in June.

UK government launches Decarbonisation Strategy

The Industrial Decarbonisation Strategy that will see £171 million put towards hydrogen and carbon capture and storage (CCS) projects. The dedicated £171 funding is part of a larger £1 billion investment, largely aimed towards decarbonising government owned buildings.

2. Framework/ Institute level regulations

IFRS Sets Strategic Direction for Sustainability Reporting Standard Board

The IFRS initiated a three-month consultation, launched with the release of a paper seeking feedback on the potential formation of global sustainability reporting standards, and its own place in that process. Based on the feedback, the new board would focus on information that is material to the decisions of investors, lenders and other creditors. Citing the urgent need for better information about climate-related matters, the IFRS said that new board would initially focus its efforts on climate-related reporting, while also working towards meeting the information needs of investors on other ESG matters

SFDR: New ESG Disclosure Obligations to take effect in March 2021

The EU regulation on Sustainability-Related Disclosures (“Disclosure Regulation”) will take effect on March 10, 2021. Its aim is to enhance transparency regarding integration of environmental, social and governance matters (“ESG”) into investment decisions and recommendations. Many of the requirements of the Disclosure Regulation will apply to investment managers that do not focus on ESG mandates.

PRI: New guidance on Investor’s approach to voting on  shareholder resolutions

The Principles for Responsible Investment (PRI) released a new report, Making Voting Count, which argues that investors should view voting on shareholder resolutions not necessarily as part of an escalation strategy, but rather as a tool for clear, effective and accountable investment stewardship. The report focused on Voting Principle’s careful determination, consistency, and public disclosure.

GRESB: GLIO and GRESB partner to launch ESG filtered Infrastructure Index

The index boosts the specialist offering of the parent GLIO Index, whose principles are to capture companies engaged in activities critical for the day-to-day functioning of society and the global economy. The index will

  • Expand parent GLIO Index.
  • Use GRESB assessment data for scoring.
  • Be managed by GPR, the global real assets index

SASB Opens 90-day public comment period on Asset Management and Custody activities standard

The Systemic Risk in Asset Management standard-setting project was first approved by the SASB Standards Board in December 2019. In June 2020, the Board made a preliminary decision to remove accounting metric FN-AC-550a.1 from the Asset Management & Custody Activities Standard, which calls for a breakdown of open-end fund assets by liquidity category. The Board is now proposing removing the Systemic Risk Management disclosure topic with all four associated accounting metrics. The proposed revision is intended to make the standard more cost-effective for companies to use without significantly reducing the provision of information that investors find decision-useful.


Section covers the updates related to the developments in the real estate sector focused on Investment Managers, Developers, Service Providers, and Industry Reports

Larry Fink’s 2021 letter to CEOs

BlackRock Chairman and Chief Executive Officer Larry Fink published his annual letter to CEOs, highlighting the risks and opportunities to companies and investors from the global transition to a net zero economy, and outlining BlackRock’s own net zero initiatives and commitments.

DWS – Reporting Standard Commitment and need

DWS calls for Global Sustainability Reporting Standards Under IFRS, Emphasizes Double Materiality DWS, one of the largest asset managers in Europe, announced its support for the creation of a Sustainability Standards Board (SSB) under the IFRS Foundation, with the aim of developing a global sustainability reporting standard. DWS commits to Human Capital Reporting Standards – DWS has committed itself to the Human Capital Reporting Standards ISO30414.

Aviva Investors £47B Net Zero Carbon Pledge Makes Green Real Estate Goals Mainstream

Aviva and Canada’s PSP funded office developments in Cambridge. Aviva Investors has pledged that its entire £47.3B property portfolio will record net zero carbon emissions by 2040. Aviva further announced, a new set of climate goals and initiatives, including a commitment to targets net zero Scope 1, 2 and 3 carbon emissions by 2040, in a first for a major insurance company.

Schroders Fully Integrates ESG Into Financial Analysis

Global investment manager Schroders announced the completion of its process to integrate ESG factors into the decision-making across all investments that the firm manages, meaning that Schroders fund managers and analysts systematically consider ESG factors as part of their investment analysis.

Inaugural 2025 Target Setting Protocol

The Net Zero Asset Owners Alliance, formed by 33 of the world’s largest institutional investors, with $5.1 trillion assets under management. It recently published the 2025 Inaugural Target Setting Protocol, which lays out protocols for reductions from 2020 to 2025 through transparent five-year targets.

Green bonds market summary Q3 2020

Q3 2020 issuance peaked at USD64.9bn. Cumulative issuance volume since inception reached USD948bn. 314 deals from 191 individual issuers. 52 benchmark issues of at least USD500m. Representation from 39 countries including 71 deals from the USA, 48 from Germany, 40 from Sweden, and 30 from Japan.73 debut green bond issuers from 29 countries

Sustainable Finance

  • Goldman Sachs Update on Sustainable finance – $ 750 billion Commitment – Read more
  • Luxembourg Green Exchange Launches Climate-Aligned Issuers Debt Section – Read More  
  • MUFG Launches Green Deposits, Enabling Clients to Direct Bank Deposits into ESG Projects – Read More
  • Goldman Sachs issues its first sustainability bond in $800 million offering – Read More
  • Moody’s Sees Sustainable Bond Issuance Soaring to $650B in 2021 – Read More

Nuveen Real Estate launches Net Zero Carbon strategy for $133 Billion Portfolio

The launch of a net zero carbon strategy for its entire global real estate portfolio, committing to achieve net zero carbon across its $133 billion of assets by 2040. Nuveen Real Estate and Real Assets, CEO, “Our net zero carbon pathway makes a bold, clear commitment to achieving net zero across our global real estate portfolio by 2040. We believe this is essential to create a better world for future generations, but it will also help mitigate climate risk across our real estate strategies and future-proof our investments.”


Deutsche Bank ESG Advisory’s Outlook

Deutsche Bank’s ESG Advisory team, part of the Investment Bank, explain 5 Capital Markets ESG trends that will affect investor behaviour.

  • Impact of Pandemic and Regulations
  • Credible transition strategies
  • Disclosure obligations
  • Buy in from stakeholders and Double Materiality Approach
  • Growth of sustainability linked bonds

AIGCC SURVEY: Asian Investors Becoming More Sophisticated on Climate strategies

Survey’s Key findings

  • Approximately 90% of Asian frontier and emerging market investors, as well as developed market investors reporting actively deploying climate aligned or low climate investments, compared with fewer than 60% of emerging markets and slightly over 70% of developed market investors surveyed in 2019
  • Implementation of climate aligned strategies is growing rapidly, with nearly 70% of respondents using decarbonisation strategies, up from less than 30% in 2019, and almost half utilizing a portfolio tilting strategy, an increase of more than 35%
  • 79% of investors in listed equities and 74% in fixed income reporting conducting carbon footprint analysis on assets, compared with only 19% and 11% in 2019, respectively

MSCI: ESG Investor Survey

  • 31% of the largest institutional investors say climate change will have the biggest impact on the way their organization invests over the next three to five years
  • Nearly a third are regularly using climate data to manage risk

Handbook for decoding nature related Financial Risk

The University of Cambridge Institute for Sustainability Leadership (CISL) has published a handbook for understanding and identifying nature-related financial risks. Nature loss poses financial risks, with more than half of global GDP highly or moderately dependent on nature. Dutch financial institutions alone have around €510 billion of exposure