Pension funds warn of looming “brown discounting” danger
- June 1, 2022: Vol. 16, Number 6

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Pension funds warn of looming “brown discounting” danger

by Marek Handzel and Kali Persall

A large number of European pension funds believe real estate that falls short on sustainability will suffer from significant “brown discounting”.

A new study by ESG data intelligence firm Deepki, called The Deepki European Pension Fund Report: Integrating ESG into commercial real estate investment, has found that fears of “brown discounting” in real estate portfolios has grown among pension fund investors.

After surveying 250 European pension fund managers in the United Kingdom, Germany, France, Spain and Italy, with an aggregate €402 billion of assets under management, Deepki has found that 62 percent of these European pension funds believe that the impact of “brown discounting” will increase significantly during the next three years. Roughly 40 percent of survey respondents have already seen asset depreciation of 21 percent to 30 percent on properties that lack sustainability credentials during the past 12 months, and 21 percent have seen asset

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