As evidence mounts of accelerating climate change around the world, talk that global warming will exceed the crucial 1.5C threshold set by the 2015 Paris Agreement is gathering momentum.

According to the World Meteorological Organization, the global average temperature is likely to increase by more than 1.5C above pre-industrial levels at least once between now and 2027, a rise that could occur more frequently afterwards. The message is seeping into the world of institutional private real estate, part of a built environment widely recognised to be responsible for around 40 percent of the planet’s carbon emissions.

The discussion around rising global temperatures was showcased at last week’s Expo Real in Munich. Indeed, senior executives on the conference’s opening panel, moderated by affiliate title PERE, agreed the private real estate sector should continue to channel efforts towards limiting global warming to 1.5 degrees. However, they also suggested the industry might be better off focusing on portfolio resilience rather than emissions reduction, in a more likely 2.6-degree scenario.

You would have never heard such talk last year,” said the founder of a London-based real estate investment management firm focused on logistics, in an offstage meeting.

Notably, the panel – comprising Julie Townsend, ESG lead for Europe and Asia-Pacific at manager PGIM Real Estate; Beverley Kilbride, chief operating officer for Europe at manager LaSalle Investment Management; Aneta Rusiniak, director ESG for real estate, Europe at manager Invesco; and Helene Demay, executive director, real assets product management at research provider MSCI – also discussed the need for more stakeholders to effectively achieve decarbonisation plans.

Fully understanding operating carbon emissions without the necessary data is challenging, the executives said. Recent revisions to the EU’s Energy Performance of Buildings Directive, which provides a blueprint for a ‘zero emissions building,, have impacted the sector positively. But the managers still blamed tenants for often not providing crucial data regarding their energy use and regulators for not making such data disclosure mandatory. They labelled it “the big issue in the room” and said if data sharing was obligatory, “it puts the industry in a better place”.

Whether that could be considered passing the buck or just sober talk was a matter of debate offstage. One large insurance company investor pointed out how green leasing – contracts subject to criteria including the sharing of energy use data – was a way for landlords to take matters into their own hands and not rely on other parties.

Managing what is considered possible was a key message from Expo Real’s scene-setting panel. Embodied carbon – the largest contributor to emissions – was, worryingly, not being addressed as manageable. Without effective regulation, that was labelled as a “free meal” for the industry.

Significantly, a now-stoic rhetoric was demonstrated, with multiple mentions of fiduciary duties being most important. And to be a fiduciary manager of institutional capital nowadays, a firm must make value protection targets just as it has set bold and ambitious decarbonisation targets. As Kilbride put it, it is all about “balancing the fiduciary risk we have with the impacts we desire.”