(HOUSTON) – Hines, a global real estate investment manager, released its 2023 ESG report, codifying Hines’ belief that ESG is about creating sustainable value and underscoring how ESG is integral to the firm’s business strategy. Released on the heels of Hines’ Mid-Year Outlook, the report details the recent initiatives and steps taken by Hines to continue its growth as an industry leader in ESG.
“In a higher-for-longer environment, we believe having innovative sustainability solutions is paramount to create alpha, and ultimately a more resilient global real estate portfolio. We’re proud of our sustainability efforts around the world, and the consistent engagement from our employees, investors and the communities in which we live, work and invest,” said David Steinbach, Hines’ Global Chief Investment Officer. “Having an understanding of sustainability best practices and climate risk continues to be a critical factor in driving sustainable value at the asset and portfolio level on behalf of our investors and partners.”
“From our responsible investment practices, to our robust sustainability goals, Hines takes pride in creating and implementing innovative ESG initiatives, and the benefits are evident across all aspects of our business,” said Sonny Masero, Hines Managing Director of Global ESG. “Over the last few years, we have seen rapid changes in the Sustainable Real Estate Investment market at the end of an investment cycle. We believe that as we enter a new cycle, sustainability’s role in helping to generate returns will continue to grow and will be at the forefront of how we think about investing.”
Highlights from the 2023 ESG Report include:
Value Creation and Protection
- Hines has made responsible investments by integrating sustainability factors into existing asset holdings. Our funds, representing $24.3B1, or 26.1% of Total AUM, are sustainability-aligned (i.e., GRESB offers five investment funds that are financial products falling under Article 8 of the EU Sustainable Finance Disclosure Regulation (“SFDR”) and/or NZC Pathways). Hines also reports transparently to PRI and PREQIN.
- Through venture-based ESG innovation, Hines seeks to make a positive impact in the built environment by integrating sustainable best practices into existing portfolios and new developments.
- Physical and transition climate risks can have an impact on the success of an investment. This is the first year that we have published our carbon emissions baseline and initial progress. Hines has factored this into its investment decision making, as well as using the Carbon Risk Real Estate Monitor (CRREM) tool to understand stranding risk. Hines is undertaking physical climate risk assessments of our assets.
- Hines recognizes that achieving net-zero carbon2 emissions is crucial in the fight against climate change. To address this global challenge, Hines established a robust data infrastructure to monitor progress toward science-based operational carbon targets and is developing new tools and processes for more accurate cost-benefit analyses. This year, Hines’ interim 42% operational carbon reduction target for 2030 was approved by the Science Based Targets initiative3.
- Building performance is a key measure of success in sustainability, and Hines is using building certifications to set internal targets, align with the International Capital Market Association’s Green Bond Principles4, support stakeholder goals, and benchmark progress on a project and firm-wide basis. Over 50% of our Net Rentable Area5 is covered by value-adding Green Building Certificates.
- In a real estate market where alpha6 is increasingly important, Hines believes that our assets must be part of thriving communities and it is in our interests to contribute to building communities that are economically resilient, healthy and well, and are inclusive and diverse. In the properties that we manage, we aim to have a focus on activating social value for these communities.
- Giving back to communities within the Hines network has been an investment that goes beyond the built environment to support the fabric of communities where we live, work and invest. This has been achieved through partnerships, philanthropy, and volunteering opportunities alongside firm-wide days of service.
Hines’ full 2023 ESG Report can be found at hines.com/esg/reports.
About Hines
Hines is a leading global real estate investment manager. We own and operate $93.2 billion7 of assets across property types and on behalf of a diverse group of institutional and private wealth clients. Every day, our 5,000 employees in 30 countries draw on our 65-year history to build the world forward by investing in, developing, and managing some of the world’s best real estate. To learn more, visit www.hines.com and follow @Hines on social media.
1 As of 12/31/2023. Includes RIA AUM
2 Net-Zero Carbon is currently being defined as zero annual greenhouse gas emissions from operational energy, achieved through deployment of the energy hierarchy (i.e. reduce energy demand, increase energy efficiency, use on-site and off-site renewable energy, and as a last resort procure emissions offsets).
3 Hines commits to reduce absolute Scope 1 and 2 GHG emissions 42% by 2030 from a 2021 base year. Hines also commits to reduce absolute Scope 3 GHG emissions from use of sold products (Category 11) and downstream leased assets (Category 13)
4 2% within the same timeframe. 4 Eligible green projects are defined as “investments related to the construction, development, acquisition, redevelopment, operations, and maintenance of real estate projects that have received or are expected to receive applicable third-party green building certifications.”
5 Includes all properties owned in whole or in part by Hines or a Hines vehicle and/or managed by Hines at any point within 2023.
6 "Alpha" is used to measure the ability of an investment manager to select and efficiently manage superior assets. Alpha is calculated as the difference in unlevered IRR over the hold period to the Hines asset and the benchmark unlevered IRR of the same market and property type over the exact same hold period.
7 Includes both the global Hines organization and RIA AUM as of December 31, 2023.
