Friday, January 21, 2011

Australian fund boosts property sustainability

Ruth Liew in the Financial Standard: The $18 billion government fund ARIA is improving the sustainability of its properties as part of its efforts to mitigate the risk of climate change on the fund's portfolio. The fund said "climate change and energy, food and water security present an element of very long-term risk (50 - 100 years) to asset values, although most estimates of the direct impact on ARIA's portfolio are small".

ARIA's investment managers that manage seven of the fund's directly-owned properties have incorporated sustainability principals and initiatives in their investment processes. As a result, the fund has managed to reduce the energy and water consumption of these properties.

Some of the initiatives include installing sub-metering within buildings, obtaining national energy and water ratings, and a specialist environmental sustainability consultant to assess each building. "ARIA believes that over our investment horizon, an increasingly fragmented policy response is likely to alter prospective returns-for-risk across assets, industries, regions and corporations," according to a fund statement….

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