Deutsche Asset & Wealth Management Issues 2014 Real Estate ESG Strategy Update

Deutsche Asset & Wealth Management’s (Deutsche AWM) real estate investment business has issued its 2014 Environmental Social Governance (ESG) Strategy Update. The report highlights the 10 achievements and overall progress Deutsche AWM’s real estate investment business has made in implementing its ESG strategy, which is defined by the business’ ability to preserve and enhance risk-adjusted returns and strengthen its investment process by reducing risk, improving efficiency and satisfying tenants.

“Accelerating environmentally and socially responsible investments in a manner that preserves and enhances risk-adjusted investment returns is a challenge that Deutsche AWM and Deutsche Bank are committed to meeting head-on,” said Pierre Cherki, Head of Alternatives and Real Assets at Deutsche AWM, which includes the real estate investment business.

The report also highlights the role Deutsche AWM plays in leading industry initiatives around sustainability and ESG in real estate including the ULI Greenprint Center, the Global Real Estate Sustainability Benchmark (GRESB), and the UN Environment Programme Finance Initiative (UNEP-FI) Working Group.

“We participate because decisions made by these groups today, regarding how the industry should address ESG, will lead to on-the-ground solutions in the coming years. In doing so, we are better positioning ourselves to deliver the best-in-class services and long-term investment performance that our clients demand from us,” added Cherki.

Deutsche AWM’s real estate investment business continues to sharpen its approach to ESG implementation after 10 years of thought leadership and achievements. Its ESG activities are governed by a specific set of objectives that re-enforce the business’s focus on risk management, active asset management and thought leadership. Most notably, Deutsche AWM achieved a 31% return on investment for sustainability upgrade projects in the US and grew AUM certified with a “green label“ by EUR 1.2 billion, doubling total certified AUM from EUR 2.0 billion to EUR 4.0 billion from 2012 through 2014. In addition, the business adopted ESG checklists across regions for all direct real estate acquisitions. Over the past two years the business has received three awards, coming from both the US and Europe, including a “Green Star” from GRESB.

Key trends cited in the 2014 Real Estate ESG Strategy Update include:

An increase in regulations requiring energy benchmarking, public disclosure, and in some cases specific actions to improve the energy efficiency of commercial real estate - Currently, 42% of Deutsche AWM’s real estate investment business’ assets under management in the US are subject to disclosure requirements—either annually or at the time of transaction. European Union and member state legislation is also driving and requiring a greater focus on energy efficiency and “green” practices, especially in global gateway cities like London and Paris.

Progress on Energy Efficiency and Carbon Pollution – Globally since 2009, we have reduced energy consumption each year for assets where benchmarking is possible. From 2009 to 2014, the reduction among this portfolio was approximately 6.4 percent.

Deutsche Asset & Wealth Management – Real Estate

Deutsche Asset & Wealth Management’s real estate investment business has been investing in real estate assets for more than 40 years. As part of the Alternatives and Real Assets platform, this business today has more than 450 employees around the world, USD 47.6 billion in assets under management as of December 31, 2014, and offers a diverse range of strategies and solutions across the risk and return and geographic spectrums, including core and value-added real estate, real estate securities, real estate debt and opportunistic real estate. The real estate investment business employs a disciplined investment approach and aims to deliver superior long-term risk adjusted returns, preservation of capital and diversification to its investors, which include governments, corporations, insurance companies, endowments, retirement plans and private clients worldwide. To learn more about Deutsche Asset & Wealth Management’s real estate investment capabilities, please go to www.deutscherealestate.com.

Deutsche Asset & Wealth Management

With USD 1.26 trillion of assets under management (as of December 31, 2014), Deutsche Asset & Wealth Management¹ is one of the world's leading investment organizations. Deutsche Asset & Wealth Management offers individuals and institutions traditional and alternative investments across all major asset classes. It also provides tailored wealth management solutions and private banking services to high-net-worth individuals and family offices.

¹ Deutsche Asset & Wealth Management is the brand name of the Asset Management and Wealth Management division of the Deutsche Bank Group. The legal entities offering products or services under the Deutsche Asset & Wealth Management brand are listed in contracts, sales materials and other product information documents.

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