This $48B Real Estate Giant Wants To Punish Itself If It Misses Green Targets
Canadian pension fund investor Ivanhoé Cambridge has linked $6.8B (£5B) of its corporate debt to ESG performance, meaning its financing costs will go up if it misses sustainability targets.
The company, which owns 1,100 buildings across the world valued at about $48B (£35B), said it had reached a deal with 11 banks that provide its corporate term loans — debt not linked to individual buildings, but to the company as a whole. That means if sustainability performance goes up, it will pay less interest, but if it goes down, it will pay more.
The key performance indicators Ivanhoé Cambridge will use to improve its performance include low-carbon investments, the carbon intensity of its portfolio and, more generally, the portfolio’s ESG as measured by its GRESB score.
The company said one of its key objectives is to achieve carbon neutrality for the entire portfolio by 2040, in line with the Paris Agreement.
The company has also sought to be greener in the developments it undertakes, particularly in Europe.
Ivanhoé is the cornerstone investor in a new fund called ICAWOOD, which will be managed by Guillaume Poitrinal’s company ICAMAP. ICAWOOD has raised €750M of equity from a total of 13 investors. With debt, it will have €1.6B to spend, focusing on timber buildings.
The fund will develop new low-carbon buildings in Paris, with the aim of building a portfolio of 2M SF to 3M SF by 2028. The offices will implement building technologies developed by Woodeum Group subsidiary WO2.
