Aegis Asset Management: "ESG Investment Should Be Considered in the Real Estate Market"

Aegis Asset Management Research Center Releases Report on ESG Investment

[Asia Economy Reporter Minji Lee] There is an opinion that investments in the real estate market should also consider Environment, Social, and Governance (ESG) factors. While past eco-friendly investments failed to consider profitability and performance, recent ESG investment methods are explained to pursue both profitability and sustainable growth.

According to the Aegis Asset Management Research Center on the 16th, as global climate change has recently shown severe patterns, legal and institutional regulations on carbon dioxide emissions are being strengthened. They argued that in the real estate investment market, it is necessary to assess the risks related to climate change in each region where investment assets are located and to develop strategies accordingly.

The main culprit of climate change is carbon dioxide, and carbon dioxide emissions from buildings account for about 36% of the world's total carbon dioxide emissions. The report forecasts that changes in government policies and strengthened regulations on the real estate market, such as increases in carbon emission permit prices, carbon emission regulations, and stricter asset licensing standards from an environmental perspective, will accelerate.

As an alternative, the report stated that ESG investment, which is becoming a major trend in future investments, is necessary. ESG investment refers to an eco-friendly investment method based on the three principles of ESG when investing. Although interest in ESG investment is still minimal domestically, overseas investment has greatly expanded and is rapidly growing since the COVID-19 pandemic.

In the past, eco-friendly investment methods were difficult to consider profitability, but ESG investment in the asset management field differs from past eco-friendly investment methods in that it prioritizes investment performance and profitability.

The report explained through various cases that among ESG investment areas, the realistically implementable sector in real estate investment is eco-friendly buildings, which have several advantages over traditional assets in terms of operating costs and investment value. In fact, as of 2018, global ESG AUM was $30 trillion and is expected to increase to $100 trillion by 2030.

Climate change is predicted to have enormous social and economic impacts on countries and the private sector in the future. Aegis Asset Management stated, “As the foundation of industries changes digitally, aligned with the direction of industries, ESG investment will ultimately be a paradigm shift that changes the standards of the entire industry, not just a simple trend.”

This content was produced with the assistance of AI translation services.