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Nuveen Pledges Net-Zero Emissions For Entire $133B Portfolio By 2040

The Orrick Building, part of the Foundry Square development in San Francisco that Nuveen purchased in 2014.

One of the world's biggest real estate owners has pledged to dramatically reduce the environmental impact of its portfolio.

Nuveen, which has $133B worth of real estate assets under management across the Americas, Europe and Asia, has pledged to make all of its properties carbon neutral by 2040, Financial Times reports. The target represents a 10-year acceleration from the 2050 pledge it signed in response to the youth-led climate strike of 2019 and matches the target CBRE Global Investors recently pledged to meet for its directly managed properties, IPE Real Assets reports.

The real estate management arm of fund management giant TIAA, Nuveen owns properties across an array of asset classes, some of which are in markets that have mandated carbon neutrality within that time frame. Most of those markets are in Europe, which is why Nuveen's head of strategic insights, Abigail Dean, told FT that carbon neutrality will come most quickly to the company's European properties.

How Nuveen achieves net-zero carbon emissions will vary from building to building, but in many cases will include the addition of on-site renewable energy sources such as solar power, FT reports. Nuveen also aims to cut 30% of energy consumption at its buildings by 2025, and it will look to avoid using carbon offsets where possible.

In some cases, Nuveen may look to include sustainability goals as part of lease negotiations with tenants, since some of its emissions reduction strategies will come in areas normally considered tenant improvements, FT reports.

Before the coronavirus pandemic rocketed hygiene and wellness up the list of real estate priorities, commercial real estate had largely proved that investing in environmental sustainability either sustained or increased asset value. But four years of a Donald Trump presidency that sidelined climate goals may have led to a slowdown in the adoption of green technology in U.S. buildings.