FTSE Group, NAREIT and US Green Building Council Develop the First Investable
Green Property Indexes
NEW YORK, LONDON, SYDNEY, TOKYO and HONG KONG, Nov. 14, 2012
NEW YORK, LONDON, SYDNEY, TOKYO andHONG KONG, Nov. 14,2012 /PRNewswire/
--FTSE Group, NAREIT and the U.S. Green Building Council (USGBC) announced
today that they have jointly developed the first investable green property
indexes for both institutional and retail investors.
(Logo: http://photos.prnewswire.com/prnh/20120424/NY93515LOGO )
This collaboration brings together the global market leaders in US real estate
indexing, REIT market expertise and environmental building standards. The
indexes, currently in the final stages of implementation prior to customer
use, will give investors a structured and disciplined way to measure and model
the risk and reward profile of green property, using the first codified,
transparent definition of listed green property. They will also provide
investors with new ways to incorporate principles of sustainability into their
property selections and portfolios, and access this investment theme through
index-linked financial products.
The new family of green property indexes will be based on the market's leading
benchmark for US real estate, the FTSE NAREIT Index Series, using green data
(LEED & Energy Star ratings) from USGBC. The USGBC is a leading non-profit
organization known for its development of LEED, a global green building
certification program, and its large diverse member community.
The FTSE global REITs universe represents $1.07 trillion today. US REITs
account for 48% of this universe, valued at $512bn.The green property indexes
are based on the analysis of 13,126 LEED and 18,402 Energy Star projects that
have received third-party certification based on their green achievements and
performance^1. These projects represent 4.7 billion square-feet (440 million
square-meters) of commercial real estate. USGBC certifies an average of 1.5
million square feet of additional property per day.
Mitigating and adapting to climate change, resource depletion and
environmental erosion are some of the biggest challenges for the 21st century
and will be major structural drivers of economic change. Because of this, a
growing number of investors are seeking to understand how their portfolios
will be affected and how they can reduce their risk. The global building and
construction sector is a good example of this change. It consumes a
significant proportion of the world's key resources, making it highly exposed
to the risks and rewards associated with the transition to the low carbon
economy. The sector accounts for at least 30% of greenhouse gas emissions^2.
Buildings and construction materials use three billion tons of raw materials
per annum (40% of total global use^3), and account for 55% of the wood cut for
uses other than fuel. Buildings are one of the heaviest consumers of natural
resources and account for a significant portion of the greenhouse gas
emissions that affect climate change. In the U.S., buildings account for 38%
of all CO2 emissions and represent 73% of U.S electricity consumption.
Mark Makepeace, CEO, FTSE Group said, "To date, no comparable benchmark has
been available. We've already received expressions of interest from many large
asset owners concerned about their exposure to a rapidly changing sector
directly affected by the transition to the low carbon economy."
Steve Wechsler, President and CEO, NAREIT added, "We are delighted to extend
our successful relationship with FTSE by coming together with USGBC on this
exciting initiative. USGBC has an unparalleled reputation for excellence in
green real estate research. The new indexes will be a milestone for real
estate investment worldwide and will enable more real estate investors and
managers to integrate sustainability factors into their strategies – both as
benchmarks and as the basis for investment products."
Rick Fedrizzi, President, CEO & Founding Chair, USGBC said, "Green building is
a win-win, offering both environmental and economic opportunity. Greater
building efficiency can meet 85% of future demand for energy in the United
States and a commitment to green building has the potential to generate 2.5
million jobs. The sector has seen incredible growth and is projected to add
$554 billion to the U.S. economy each year. This partnership creates
significant investment opportunities for those ready to participate in this
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NOTES TO THE EDITOR
Among the world's major index providers FTSE has a long history of leadership
and innovation in both real estate investing – working with NAREIT and EPRA,
its European counterpart -- and the environmental, social and governance (ESG)
space. FTSE worked with businesses and the investment community to establish
ESG standards and in 2001 launched the FTSE4Good Index Series. It now provides
a broad portfolio of ESG tools for investors, and was also the first major
provider to establish a transparent and codified Environmental Markets
ABOUT FTSE GROUP
FTSE Group (FTSE) is a world-leader in the provision of global index and
analytical solutions. FTSE calculates indexes across a wide range of asset
classes, on both a standard and custom basis. FTSE indexes are used
extensively by investors worldwide for investment analysis, performance
measurement, asset allocation, portfolio hedging and the creation of a wide
range of index derivatives, funds, Exchange Traded Funds (ETFs), and other
FTSE has built an enviable reputation for the reliability and accuracy of our
indexes and related data services. FTSE has a long tradition of listening and
responding to the market so that it is at the forefront of developing new
approaches to index design, many of which are now accepted as the market
standard. FTSE prides itself in continuing to invest significant resource in
researching and developing new index solutions.
The foundation for FTSE's global, regional, country and sector indexes is the
FTSE global equity universe, which covers over 7,400 securities in 47
different countries and captures 98% of the world's investable market
capitalization. FTSE's flagship global benchmark, the FTSE All-World, is used
by investors worldwide to structure and benchmark their international equity
Exchanges around the world have chosen FTSE to calculate their domestic
indexes. These include ATHEX, Bolsas y Mercados Espanoles, Borsa Italiana,
Bursa Malaysia, Casablanca SE, Cyprus Stock Exchange, IDX, JSE, LSE, NASDAQ
Dubai, NYSE Euronext, PSE, SGX, Stock Exchange of Thailand and TWSE. In
addition, FTSE works with a variety of companies and associations to deliver
innovative index solutions which provide the market with fresh opportunities.
FTSE is an independent company owned by London Stock Exchange Group.
For more information visit www.ftse.com
NAREIT is the worldwide representative voice for REITs and listed real estate
companies with an interest in U.S. real estate and capital markets.Members
are REITs and other businesses that own, operate and manage income‐producing
real estate, as well as those firms and individuals who advise, study and
service those businesses.NAREIT is the exclusive registered trademark of the
National Association of Real Estate Investment Trusts, Inc.®, 1875 I St., NW,
Suite 600, Washington, DC 20006‐5413.Follow us on REIT.com.
The U.S. Green Building Council (USGBC) is committed to a prosperous and
sustainable future through cost-efficient and energy-saving green buildings.
USGBC works toward its mission of market transformation through its LEED green
building program, robust educational offerings, a nationwide network of
chapters and affiliates, the annual Greenbuild International Conference &
Expo, and advocacy in support of public policy that encourages and enables
green buildings and communities. For more information, visit usgbc.org and
connect on Twitter, Facebook and LinkedIn.
LEED is the foremost program for the design, construction, maintenance and
operations of green buildings. More than 49,000 projects are currently
participating in the commercial and institutional LEED rating systems,
comprising 9.1 billion square feet of construction space in all 50 states and
130 countries. In addition, more than 24,000 residential units have been
certified under the LEED for Homes rating system, with more than 87,000 more
By using less energy, LEED-certified spaces save money for families,
businesses and taxpayers; reduce carbon emissions; and contribute to a
healthier environment for residents, workers and the larger community. Learn
more at usgbc.org.
For more information visit www.gbig.org/ search "REIT".
^1 Green Building Information Gateway
^2 RICS. 2005. Green Value – Green buildings, growing assets
^3 Journal of International Money & Finance 2012 – Portfolio greenness & the
financial performance of REITs.
SOURCE FTSE Group
Contact: FTSE Group Press contacts: New York: New York Press Office / Laurel
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