FTSE Group, NAREIT and US Green Building Council Develop the First
Investable Green Property Indexes
NEW YORK, LONDON, SYDNEY, TOKYO
and HONG KONG, Nov. 14, 2012 /PRNewswire/ -- FTSE
Group, NAREIT and the U.S. Green Building Council (USGBC) announced
today that they have jointly developed the first investable green
property indexes for both institutional and retail investors.
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This collaboration brings together the global market leaders in
US real estate indexing, REIT market expertise and environmental
building standards. The indexes, currently in the final stages of
implementation prior to customer use, will give investors a
structured and disciplined way to measure and model the risk and
reward profile of green property, using the first codified,
transparent definition of listed green property. They will also
provide investors with new ways to incorporate principles of
sustainability into their property selections and portfolios, and
access this investment theme through index-linked financial
products.
The new family of green property indexes will be based on the
market's leading benchmark for US real estate, the FTSE NAREIT
Index Series, using green data (LEED & Energy Star ratings)
from USGBC. The USGBC is a leading non-profit organization known
for its development of LEED, a global green building certification
program, and its large diverse member community.
The FTSE global REITs universe represents $1.07 trillion today. US REITs account for 48% of
this universe, valued at $512bn.The
green property indexes are based on the analysis of 13,126 LEED and
18,402 Energy Star projects that have received third-party
certification based on their green achievements and
performance1. These projects represent 4.7 billion
square-feet (440 million square-meters) of commercial real
estate. USGBC certifies an average of 1.5 million square feet
of additional property per day.
Mitigating and adapting to climate change, resource depletion
and environmental erosion are some of the biggest challenges for
the 21st century and will be major structural drivers of economic
change. Because of this, a growing number of investors are seeking
to understand how their portfolios will be affected and how they
can reduce their risk. The global building and construction sector
is a good example of this change. It consumes a significant
proportion of the world's key resources, making it highly exposed
to the risks and rewards associated with the transition to the low
carbon economy. The sector accounts for at least 30% of greenhouse
gas emissions2. Buildings and construction materials use
three billion tons of raw materials per annum (40% of total global
use3), and account for 55% of the wood cut for uses
other than fuel. Buildings are one of the heaviest consumers of
natural resources and account for a significant portion of the
greenhouse gas emissions that affect climate change. In the U.S.,
buildings account for 38% of all CO2 emissions and represent 73% of
U.S electricity consumption.
Mark Makepeace, CEO, FTSE Group
said, "To date, no comparable benchmark has been available. We've
already received expressions of interest from many large asset
owners concerned about their exposure to a rapidly changing sector
directly affected by the transition to the low carbon economy."
Steve Wechsler, President and
CEO, NAREIT added, "We are delighted to extend our successful
relationship with FTSE by coming together with USGBC on this
exciting initiative. USGBC has an unparalleled reputation for
excellence in green real estate research. The new indexes
will be a milestone for real estate investment worldwide and will
enable more real estate investors and managers to integrate
sustainability factors into their strategies – both as benchmarks
and as the basis for investment products."
Rick Fedrizzi, President, CEO
& Founding Chair, USGBC said, "Green building is a win-win,
offering both environmental and economic opportunity. Greater
building efficiency can meet 85% of future demand for energy in
the United States and a commitment
to green building has the potential to generate 2.5 million jobs.
The sector has seen incredible growth and is projected to add
$554 billion to the U.S. economy each
year. This partnership creates significant investment opportunities
for those ready to participate in this growing market."
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NOTES TO THE EDITOR
Among the world's major index providers FTSE has a long history
of leadership and innovation in both real estate investing –
working with NAREIT and EPRA, its European counterpart -- and the
environmental, social and governance (ESG) space. FTSE worked with
businesses and the investment community to establish ESG standards
and in 2001 launched the FTSE4Good Index Series. It now provides a
broad portfolio of ESG tools for investors, and was also the first
major provider to establish a transparent and codified
Environmental Markets Classification System.
ABOUT FTSE GROUP
FTSE Group (FTSE) is a world-leader in the provision of global
index and analytical solutions. FTSE calculates indexes across a
wide range of asset classes, on both a standard and custom basis.
FTSE indexes are used extensively by investors worldwide for
investment analysis, performance measurement, asset allocation,
portfolio hedging and the creation of a wide range of index
derivatives, funds, Exchange Traded Funds (ETFs), and other
structured products.
FTSE has built an enviable reputation for the reliability and
accuracy of our indexes and related data services. FTSE has a long
tradition of listening and responding to the market so that it is
at the forefront of developing new approaches to index design, many
of which are now accepted as the market standard. FTSE prides
itself in continuing to invest significant resource in researching
and developing new index solutions.
The foundation for FTSE's global, regional, country and sector
indexes is the FTSE global equity universe, which covers over 7,400
securities in 47 different countries and captures 98% of the
world's investable market capitalization. FTSE's flagship global
benchmark, the FTSE All-World, is used by investors worldwide to
structure and benchmark their international equity portfolios.
Exchanges around the world have chosen FTSE to calculate their
domestic indexes. These include ATHEX, Bolsas y Mercados Espanoles,
Borsa Italiana, Bursa Malaysia, Casablanca SE, Cyprus Stock
Exchange, IDX, JSE, LSE, NASDAQ Dubai, NYSE Euronext, PSE, SGX,
Stock Exchange of Thailand and
TWSE. In addition, FTSE works with a variety of companies and
associations to deliver innovative index solutions which provide
the market with fresh opportunities.
FTSE is an independent company owned by London Stock Exchange
Group.
For more information visit www.ftse.com
ABOUT NAREIT
NAREIT is the worldwide representative voice for REITs and
listed real estate companies with an interest in U.S. real estate
and capital markets. Members are REITs and other
businesses that own, operate and manage income‐producing real
estate, as well as those firms and individuals who advise, study
and service those businesses. NAREIT is the exclusive
registered trademark of the National Association of Real Estate
Investment Trusts, Inc.®, 1875 I St., NW, Suite 600, Washington, DC 20006‐5413. Follow
us on REIT.com.
ABOUT USGBC
The U.S. Green Building Council (USGBC) is committed to a
prosperous and sustainable future through cost-efficient and
energy-saving green buildings. USGBC works toward its mission of
market transformation through its LEED green building program,
robust educational offerings, a nationwide network of chapters and
affiliates, the annual Greenbuild International Conference &
Expo, and advocacy in support of public policy that encourages and
enables green buildings and communities. For more information,
visit usgbc.org and connect on Twitter, Facebook and LinkedIn.
About LEED
LEED is the foremost program for the design, construction,
maintenance and operations of green buildings. More than 49,000
projects are currently participating in the commercial and
institutional LEED rating systems, comprising 9.1 billion square
feet of construction space in all 50 states and 130 countries. In
addition, more than 24,000 residential units have been certified
under the LEED for Homes rating system, with more than 87,000 more
homes registered.
By using less energy, LEED-certified spaces save money for
families, businesses and taxpayers; reduce carbon emissions; and
contribute to a healthier environment for residents, workers and
the larger community. Learn more at usgbc.org.
For more information visit www.gbig.org/ search
"REIT".
1 Green Building Information Gateway
2 RICS. 2005. Green Value – Green buildings, growing
assets
3 Journal of International Money & Finance 2012 –
Portfolio greenness & the financial performance of REITs.
SOURCE FTSE Group