Real Estate

Hines Real Estate Goes All In On ESG

Jackie Bennion, Deputy Editor, 24 June 2021

articleimage

The firm is building its ESG strategy by hiring a new global head and a new dedicated team to improve the sector’s sustainability record.

International real estate firm Hines has unveiled a new ESG strategy in a bid to boost its susainability commitments and respond more actively to the climate emergency. The group says it wants to accelerate efforts and lead the sector on decarbonizing the built environment.

“Investors, occupiers and increasingly, communities, are asking the commercial real estate industry to do far more than it ever has,” the Houston-based group said.

With infrastructure booms underway, driven by different global policy agendas, and the construction industry often under fire for being too slow to innovate in “greening” the sector, Hines is well placed to pick up the pace on sustainable practices.

The privately owned real estate investment firm operates in 27 countries and says it has more than 180 developments underway around the world.

Innovation in materials design and energy conservation are likely to figure prominently in its ESG approach. The broad focus "will continue to be carbon reduction through the way we design, build and operate real estate," global sustainability officer Clayton Ulrich, said.

The cladding crisis in the UK following the Grenfell Tower tragedy has cast developers, building regulators, and governments in an uncomfortable light. The production of traditional building materials, such as cement, are among the most environmentally damaging. Developers are often called to task for falling short on their social housing obligations. The industry is certainly alive with ESG concerns.

Hines has named senior managing director Peter Epping as global head of ESG to lead the initiative, backed by a newly-created global ESG team and a new global leadership council, the firm said, although its announcement fell short on finer details of the strategy. Epping is relocating from London to New York to take up the role.

For the past eight years, Epping has managed the Hines’ European Core Fund (HECF) which is ranked highly by GRESB, the European ESG performance benchmark for real assets.

A reflection of how the global real estate sector is incorporating ESG, GRESB's annual scoring offers some insight. A regional breakdown of its latest asset-level reporting showed that Oceania led, with an average GRESB score of 77. The Asian real estate sector was second, with 72, followed by Europe at 69.5, slightly ahead of the US at 69.

Ready to push Hines' ESG practices, the firm said that Epping will work closely with ESG leads in Asia, Europe, North America and South America.

“Our scale allows us to implement our innovative approach across a large number of new projects and existing properties around the world,” Epping said.

Operating for 65 years, the firm has assets of around $160 billion under management, with $81 billion directly managed.

“We all have a part to play in one of the largest challenges of our collective lifetime,” chair and chief executive Jeffrey Hines, said. “Our long-term vision is to continue leading the industry by further embedding ESG excellence across the company," through investments, construction, management and engineering globally, he said.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes