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Private equity real estate, including ESG-focused strategies, is facing fundraising challenges amid market volatility. Impact fund capital decreased significantly from $1.97 billion in 2021 to $558 million in 2023, yet environmental, social and governance (ESG) considerations remain a central aspect of investor priorities.
While environmental metrics are now embedded in real estate, social impact lags behind, as it is harder to define, measure, and scale. Regional differences complicate standardization, with Europe leading the way, followed by Canada, and the U.S. trailing due to varying perceptions and political dynamics.
Despite these challenges, investors are increasingly aware of the potential for impact and returns to be aligned. Initiatives such as WELL, Fitwel, GRESB, and the Social Value Portal are contributing to the development of frameworks, although a unified benchmark is s…
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