14 Jun 2022

In mid-April 2022 AREF, along with other real-estate related associations, submitted proposals to the FCA on ESG metrics for real estate.

Download Proposal

The proposals contained in this document represent the views of AREF and other Associations in response to a request from the FCA for input on the development of real estate-specific metrics. The aim is for these to provide consistent, transparent, and comparable reporting and disclosure for real estate portfolios and cover all real estate asset classes. Also, they should be aligned with TCFD guidelines and the evolving SDR. In the context of realising this aim, the Associations look forward to progressing the dialogue with the FCA and resolving a time framework for appropriate implementation, recognising that some metrics are implementable sooner than other metrics.

The proposed principles and real estate specific metrics aim to facilitate consistency of disclosures both across the EU and UK as well as internationally where the TCFD’s recommendations will apply. While the principles are aimed at supporting consistent reporting and disclosure by international asset managers, local supplements may be appropriate or needed for domestic real estate-specific metrics. The paper has been shared with the TCFD secretariat and ISSB (International Sustainability Standards Board). AREF has provided an overview of the paper to members of the Alliance of International Fund Associations (AIFA). The paper was included in AREF’s response to the consultation on Technical Guidance for the accounting and reporting of real estate-related operational emissions published by PCAF, CRREM and GRESB. Also, AREF will show its support for the paper in response to consultations from the Securities and Exchange Commission (SEC) on Enhancement and Standardisation of Climate-Related Disclosures and the European Financial Reporting Advisory Group (EFRAG) on EU Sustainability Reporting Standards (ESRS).

The principles and suggested metrics have considered issues that are broadly applicable across all real estate asset classes such as climate resilience, mitigation and adaptation, energy and energy efficiency, carbon, water, waste, the circular economy, biodiversity, and social value. However, the Associations acknowledge that individual real estate portfolios and developments may have specific material risks and opportunities not addressed within these proposals and suggest such risks and opportunities should be subject to further disclosure obligations. It is also acknowledged that this is not an exhaustive list of ESG metrics for real estate disclosures. Additionally, it should be noted that the ability to report against these metrics will vary depending on the type of real estate asset class, development type, and debt versus equity real estate funds. Organisations will not be able to report on all of these metrics from day one nor are these proposed as a set of criteria for the SDR product labels. Therefore, the Associations envision an ongoing dialogue with the FCA on the most appropriate real estate metrics and thresholds for defining the product labels and that these will be aligned to common, external real estate benchmarks.

If you would like to contribute to the ongoing dialogue on ESG metrics for real estate please contact Jacqui Bungay (jbungay@aref.org.uk), Policy Secretariat, AREF.


Jacqui Bungay

Jacqui Bungay

AREF Policy Secretariat , AREF

Jacqui is AREF’s Company Secretary and provides policy guidance and secretariat services to  AREF’s Board and Management Committee as well as the following sub-committees and working groups: Investor Committee, Public Policy Committee, Research and Information Committee, Retail Funds Committee, Residential Funds Working Group and Technology & Innovation Forum.

Jacqui joined AREF in 2014 after working for over 25 years in fund compliance, client relationships and administration in the trustee and depositary sector.