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Private Equity Real Estate Investors – Overcoming the Challenge of Sustainability & ESG: Pro-invest Group’s ESG Journey

Published 14 Apr 2022
Reference 6729
Region Global
Summary

This case describes the ESG journey of Pro-invest Group, an asset management and investment firm specialising in private equity real estate across the globe. It begins in 2017, when the Group is launching its second hotel fund, Pro-invest Australian Hospitality Opportunity Fund II (in parallel to managing Fund I) and there is a growing appreciation of the financial and competitive benefits of strong environmental, social and governance considerations. As investor interest in ESG standards rises, Dr. Sabine Schaffer, co-founder and co-CEO Europe, commits to implementing them at every level of the company. The case describes how she drove these efforts, from achieving the GRESB Real Estate Assessment (formerly Global Real Estate Sustainability Benchmark) to the adoption of a standardized third-party-administered ESG certification scheme across the Group’s hotel assets in Australasia. The case ends in 2021 with Pro-invest looking at certification schemes for potential investments in the UK and Europe. It highlights the decisions that were taken, the challenges faced, and the key learning along the way.

Teaching objectives

After reading and analysing the case, students will: - Understand why there was a need to implement ESG considerations at the real estate PE fund and the advantages of doing so. - Have insight into the challenges facing real estate PE funds when implementing ESG/ impact investment KPIs. - Relate those challenges to other private equity and venture capital funds. - Relate those questions to the solutions developed by various regulatory bodies in Australia, Asia, UK & Europe. - Understand why buy-in from key stakeholders and cultural change at every level of the company are crucial.

Keywords
  • Private Equity Real Estate (PERE)
  • Sustainability
  • ESG
  • ESG Framework
  • ESG Certification
  • Fundraising
  • Clean Energy
  • Impact Investing
  • Energy Savings
  • Carbon Neutral
  • Water Savings
  • Green Loan
  • GRESB Real Estate Assessment
  • NABERS Rating
  • Q22022