Allianz Real Estate, one of the largest real estate investors in the world, announced today a new climate target, aiming to reduce carbon emissions across its €71.5 billion (USD$86 billion) portfolio by 2025. The new commitment sets an interim goal for the company towards its target to achieve net zero emissions by 2050.

Buildings real estate are significant contributors to the global climate challenge, accounting for approximately 40% of carbon emissions, according to the International Energy Agency and UN Environment Programme. They are also among the hardest to sources of emissions to replace, given their long-term nature.

Dr. Raphael Mertens, Chief Risk Officer at Allianz Real Estate, said:

“We consider it as highest priority to reduce the carbon footprint of all our assets and fight global warming. A reduction of emissions in the real estate sector – which accounts for approximately 40% of global greenhouse gas emissions – will have a considerable impact on global decarbonization. Our position, size and influence allows Allianz Real Estate to lead by example. As such, we have developed one of the most ambitious and comprehensive sustainability and ESG transformation programmes in the real estate sector.”

The company will utilize independent data benchmarking tools including Carbon Risk Real Estate Monitor (CRREM) and GRESB (Global Real Estate Sustainability Benchmark) in its sustainability program. Investments will be analyzed and reported against CRREM’s decarbonization pathways which are also aligned with the Paris Climate Goals of limiting global temperature rise to 2°C, with ambition towards 1.5°C.

Allianz outlined its decarbonization efforts according to for key elements, including Assess, Improve, Engage, and Own Operations. “Assess” is focused on evaluating the firm’s global portfolio and new acquisitions against a range of sustainability benchmarks and criteria, and placing a particular focus on acquiring buildings that reach high sustainability standards and include retrofitting plans to ensure they meet those standards within a two year period. “Improve” involves redeveloping and refurbishing existing assets to meet new standards. Under “Engage,” Allianz will work with key stakeholders such as business partners, suppliers and tenants to help improve sustainability across its network and wider ecosystem. “Own Operations” includes assessing and improving the company’s own buildings and business processes in areas such as energy consumption, paper consumption and business travel. 

François Trausch, CEO at Allianz Real Estate, said:

“Our sustainability program is bold but necessary. It will be a highly complex process involving hundreds of buildings and multiple stakeholders spread over many years. We are taking tangible steps to reduce our carbon footprint and develop healthy buildings for the environment and the communities that live and work in them.”