Helen Gurfel, CBRE Investment Management

Helen Gurfel, head of sustainability and innovation at CBRE Investment Management, describes her firm’s sustainability priorities for 2024.

What is your top sustainability priority for 2024? What will count as a success?

We have a fundamental understanding that the health of our environment, society and economy are inextricably linked, which is why we take a holistic approach to sustainability. Our Sustainability Vision focuses on climate, people and influence all through the lens of value creation and risk management. Executing and making continued demonstrable progress towards key performance indicators across all three pillars, including carbon reduction, portfolio target alignment and community engagement, will count as success.

Since we have a large portfolio (more than $144 billion), a top priority is establishing global processes and operationalising them to allow us to move at pace and scale.

Where have you reached on your portfolio decarbonisation/climate journey? What is next on the to-do list?

Our climate journey has a strong focus on both climate mitigation (path to net zero) and adaptation (asset resiliency). Last year, for our direct real estate investment strategies we launched a formal decarbonisation programme, which included establishing a standardised audit process and focuses on resources efficiency, electrification and renewable energy. To help us accelerate our efforts we started a rooftop solar programme called Project Helios. So far, we have completed over 300 audits.

In 2024 we will continue to drive our decarbonisation programme forward, integrating audit results into longer-term asset-level planning and execution. Under mitigation we continue to refine the quality of information that we use to assess physical risk, and so far we have run a preliminary analysis on all of our assets across direct real estate, indirect real estate and direct private infrastructure assets.

For our indirect real estate, private infrastructure and listed securities investment strategies we continue to engage with underlying managers, portfolio companies and investors to make progress on both climate adaptation and mitigation.

ESG data: Do you think the industry has now reached a good place in terms of data frameworks?

Substantial progress has been made over the past few years in the development of frameworks. As sustainability topics continue to expand and advance, we will see frameworks evolve. Benchmarking organisations, such as GRESB (of which I am a member of the Real Estate Standards Committee) and PRI, continue to refine and raise the bar to respond to evolving sustainability imperatives. Ideally we will also see a consolidation of efforts; the IFRS/ISSB is a good recent example. While the frameworks are improving, there remain some practical hurdles and a need to bridge the gaps between the ‘theoretical’ and the ‘practical’ in framework development. Over the next few years, we should see more clarity and adoption of standardised methodologies, including scope, materiality, coverage and data quality.

ESG data: Are you now finding ESG data (both your own and industry benchmark data) to be genuinely decision-useful for investment decisions?

We are seeing our own data and industry benchmark data become increasingly more decision-useful. One example is that at the time of acquisition, we ideally like to understand the energy consumption, GHG emissions and physical risks associated with an asset so that we can appropriately factor in any additional capex and opex required for the hold period of the asset. We are starting to see a clearer picture of actual portfolio emissions and utility costs that enable us to better prioritise decarbonisation efforts.

However, the usefulness of the data can vary greatly based on factors such as data quality and availability, as well as the sophistication of data models used (for example physical risk).

What is the next step in your ESG journey for human rights and supply chain risk?

CBRE Group, our parent company, is laying the groundwork for assessing and influencing a diverse and sustainable supply chain. We are working more closely with CBRE in the coming year to identify and address human rights and supply chain risk specifically for the investment management business in alignment with CBRE’s Supplier Code of Conduct, supplier diversity initiative and Standards of Business Conduct.

What is the next step in your ESG journey when it comes to nature?

Today, many jurisdictions have biodiversity requirements at the time of development. This year we are working to more systematically assess risk and opportunities connected with nature, as well as develop strategies on how we can integrate our climate work with biodiversity gains.

This will help us identify how biodiversity, ecosystem degradation and other nature-related factors might affect investment performance, as well as establish paths to leverage nature to mitigate climate risks. We seek to develop biodiversity guidelines in 2024.

What is the first item on your DEI to-do list in 2024?

Our DE&I programme focuses on three pillars: culture, talent and community. For culture, we work to establish an inclusive, innovative and engaging work environment. Under talent, we work to retain and recruit strong talent which means looking at a wide and diverse pool of applicants, as well as how we mindfully promote employees. Under community, we strive to use our market position, scale and expertise to create thriving communities.