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PRESS index: A new standard for sustainable real estate investment
The Center for Risk Management at Lausanne (CRML) at HEC Lausanne (UNIL) introduces the PRESS index (Public Real Estate Sustainability Switzerland), the first public sustainability index for real estate in Switzerland. This new index, updated daily, is designed to offer a more responsible investment option in listed real estate funds, by integrating sustainability performance with profitability.
The PRESS index provides investors with a simple and effective tool for assessing the financial performance and sustainability objectives of their real estate portfolios. The PRESS index uses the CRML's PRESS scores to adjust the weightings of funds in the well-known SWIIT index, giving greater weight to those with higher ESG (environmental, social and governance) scores.
"By strengthening the sustainability criteria for investments in listed real estate funds, this index supports the transition to a low-carbon economy," comment the CRML researchers at the HEC Faculty, Dr. Nathan Delacrétaz and Professors Fabio Alessandrini and Eric Jondeau. "It also meets a growing demand for transparency in the real estate market.".
The portfolio construction method was developed through focused research that explored effective ways to integrate ESG factors. This ensures that the PRESS index improves the sustainability of the parent index while still tracking its financial performance, offering a more responsible investment option without moving too far from the market benchmark.
The PRESS index was developed with the financial support of the Banque Cantonale Vaudoise and the University of Lausanne. The day-to-day values of the PRESS index and detailed information about its composition are available at crml.ch/pressindex.