Climate Risk Plans of Property Investment Giants Undermined by Major Gaps, Report Warns

A new global assessment has found that many of the world’s largest real estate investment managers are leaving significant gaps in their climate strategies, overlooking some of the most important sources of carbon emissions, particularly those associated with construction and tenant activities.

The review, conducted by ShareAction, examined 16 of the sector's most significant players, which collectively manage $1.66 trillion in assets. Household names such as Blackstone and Greystar were among those assessed against twelve key standards, including the setting of science-based long-term targets and the establishment of meaningful interim milestones.

The findings are troubling. Most firms still do not set portfolio-wide energy efficiency targets that account for both landlord and tenant energy use. This omission not only undermines emissions reduction efforts but also means they could be missing prime opportunities to lower operating costs and make their properties more attractive to tenants.

Even fewer investment managers are considering the broader climate transition strategies of the cities where their assets are located. This lack of alignment with municipal decarbonisation plans leaves another gap in their approach.

Only nine of the 16 firms have any long-term climate commitment that ShareAction considers “comprehensive,” meaning it is in line with widely recognised frameworks, such as the Science-Based Targets initiative. Four have made net-zero pledges without disclosing any interim targets, a move that raises questions about their credibility and accountability.

Among the twelve companies that do have interim targets, half failed to clarify how much of their portfolio is covered. For stakeholders, this lack of transparency means it is impossible to tell which assets are being managed in line with stated climate goals and which are not.

Most concerning is that over two-thirds of the managers assessed do not explicitly include construction emissions in their targets. Given the size of this emissions source, its exclusion represents a central blind spot.

One company, Nrep, stood apart by meeting all twelve of ShareAction’s key standards. Others, including Savills Investment Management, Patrizia, Heimstaden, and Prologis, received praise for the strength of their decarbonisation plans.

Still, ShareAction’s overall verdict on the sector is harsh. The organisation states that the credibility of climate targets remains weak and that emissions disclosures are inadequate. In its words, the largest firms are guilty of “continued inaction” at a time when the real estate sector’s role in climate change could not be clearer.

The group’s senior research manager, Aidan Shilson-Thomas, said: “The construction and operation of buildings account for a staggering third of global emissions, creating financial risks that managers must take seriously. The asset owners they act on behalf of, including pension funds, are relying on them to do so.”

According to the World Green Building Council, the day-to-day operations of buildings are responsible for 28 per cent of global energy-related CO2 emissions each year. Construction materials and processes contribute an additional 11%. The Council predicts that the world’s building stock will double in size by around 2050 compared to the year 2000.

In markets such as the UK, the majority of the buildings that will exist by mid-century are already standing today. This means that both the retrofitting of older structures and the sustainable design of new ones will be critical in any credible climate plan.

Shilson-Thomas continued: “Given the size of this sector, we need managers to step up and take responsibility for their impacts, while ensuring workers, tenants and communities are at the centre of plans to tackle climate change.”

For investment and asset managers, the message is clear. Their portfolios, whether comprising existing buildings or new developments, carry a significant share of the responsibility for reducing emissions. ShareAction’s report, based on data available up to May 2025, shows just how far most still have to go.