This first-of-its-kind strategy will tie compensation to the successful accomplishment of pre-defined, quantifiable sustainability goals
Galvanize Climate Solutions, the climate-focused global investment firm, announced the launch of Galvanize Real Estate, a sustainable real estate strategy that aims to invest in and decarbonize real estate, while improving cash flow and increasing asset value. As part of this first-of-its-kind real estate strategy, GRE will tie a portion of long-term incentives and compensation to the successful accomplishment of pre-defined, quantifiable sustainability goals.
Historically, real estate has been a significant contributor to climate change, but a laggard in adopting and implementing decarbonization strategies. In fact, the built environment generates 40% of annual global CO2 emissions, with building operations accounting for at least half of that. Additionally, in the U.S. alone, 30% of the energy used in commercial buildings is wasted, leaving a huge opportunity to create efficiencies and cost savings. In response to this market gap, GRE has built a new framework focused specifically on asset acquisition and investment towards decarbonization of the built environment.
“Decarbonizing real estate is crucial to tackling the climate challenge,” said Tom Steyer, Co-Executive Chair of Galvanize. “We see a tremendous opportunity to bring something new to market, particularly as consumers, corporate tenants and policy increase pressure to deliver on sustainability, and climate funding and scale of cost-effective technologies continue.”
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The strategy, led by Joseph Sumberg, Managing Partner & Head of Real Estate, aims to leverage a proprietary sustainability framework based on decades of experience in real estate, risk management and sustainable practices in the built environment, alongside Galvanize’s in-house experts in science, technology, policy and market development. To remain cutting edge, the framework is not expected to include offsets and will be iterative to incorporate learnings, new technologies and best practices identified. GRE aims to target existing properties across multifamily, industrial, student housing and self storage, and U.S. markets that the team believes will enable the climate transition.
To deliver on intended impact and go well beyond existing industry commitments, GRE’s sustainability goals will also be tied to compensation. The sustainability goals will be spread across five core categories, including i) energy and carbon emissions, ii) potable water usage, iii) climate risk and resilience, iv) social community impact and v) diversity, equity & inclusion. A majority of the weighting will be related to carbon emissions (Scopes 1 and 2) given GRE’s focus on decarbonization.
“Driving decarbonization is embedded in everything we do – from Galvanize as a platform to our real estate strategy specifically,” said Joseph Sumberg, Managing Partner & Head of Real Estate. “Our belief is to do things differently. And by creating a new methodology to evaluate and deliver climate impact, while incentivizing our team and strategic partners to achieve ambitious decarbonization goals, we aim to push the envelope, innovate new approaches to sustainable real estate and, ideally, forge a path to a net-zero portfolio.”
The launch of GRE follows the addition of three new hires to the GRE team based out of New York City: Nicolette Rabadi Jaze, Head of ESG & Sustainability, Nadine Anderson, Vice President of Acquisitions, and Rachel Reardon, Vice President of Acquisitions.