The European Association for Investors in Non-listed Real Estate Vehicles (INREV) has announced the formation of a focus group to support the integration of ESG factors into real estate investment valuations and underwriting. The group comprises senior experts across investment managers, institutional investors, valuers and the Big Four accountancy firms, including PGGM, CBRE Investment Management and DWS. Members aim to drive greater consistency on how ESG data and assumptions are incorporated into value estimations across the real estate industry. They will also develop a framework of ESG factors that should be considered in underwriting real estate investments. The framework will target challenges such as how investors can reduce the risk of double counting. “Investors and managers across Europe are setting ambitious ESG strategies, however they struggle to translate those strategies into tangible financial outcomes,” said Constantin Sorlescu, INREV’s Director of Professional Standards. “[The group] comes as a direct response to growing demand from the industry for greater clarity on the impact of ESG in real estate underwriting. Our ultimate aim is to move the industry beyond theoretical discussions to a more tangible, numbers-driven approach for ESG valuations.”
