Impact

As part our engagements on understanding the decarbonisation strategies of our investee companies we engaged with Ventas (VTR), a U.S. based Health Care REIT, on plans to achieve their net zero by 2040 target. While the company’s earlier iterations of their net zero plans may have appeared to have an overreliance on carbon offsets, the current plan is one of the strongest and most comprehensive in the industry, particularly in the U.S.

The company focuses on the standard aspects of decarbonisation in real estate: maximising energy efficiency; electrification; and increasing the share of renewable electricity. However, one of the aspects of their strategy that stands out is the preparation of property level plans for their approximately 800 properties. These property level plans provide a step-by-step guide to reduce emissions, the estimated costs of renovations, and the expected operational savings achieved at each step from reduction in energy consumption out to 2040.

One of the more interesting aspects of the company’s plan is the use of machine learning to create property and location specific roadmaps, much faster and cheaper than it would have otherwise been to prepare. This gives the property managers and operators a clear plan, with timing as well as energy and cost savings for each property, with timelines out to 2040 for energy efficient retrofits/equipment replacements.

Other aspects of Ventas’ decarbonisation plan include engaging with the operators of their properties to provide ongoing education and training on the sustainability aspects of their properties, integrating renewable electricity through onsite solar, power purchase agreements and virtual power plants, as well as performing due diligence on acquisitions to ensure new properties can be integrated into the net zero plan.

As a more granular engagement on decarbonisation strategies, we engaged with Aéroports de Paris (ADP) to discuss decarbonisation plans, specifically its approach to increasing its utilisation of Sustainable Aviation Fuels (SAFs) to reduce its Scope 3 emissions (Scope 3 emissions refer to indirect greenhouse gas emissions that occur across a company’s value chain—those outside a company’s direct control but resulting from its activities). For airports, the vast majority of Scope 3 emissions are linked to jet fuel consumption during aircraft landing and take-off (LTO) cycles, as well as taxiing to and from terminals. As such, meaningful decarbonisation of the aviation sector depends heavily on the development and adoption of low-carbon alternatives to conventional jet fuel, which is where SAFs play a critical role.

Our discussion focused on ADP’s efforts to reduce Scope 3 emissions, particularly those associated with airline operations, passenger transport, and construction activities. While ADP is confident that Paris airport operations will reach net zero for Scope 1 and 2 emissions by 2030, Scope 3 emissions remain a more complex challenge. Key areas of focus include emissions from the LTO and cruise phases of flight, transport to and from the airport, and embodied carbon in construction materials and aircraft ground services.

A significant part of the conversation centred on SAFs, which are expected to contribute 50–80% of the aviation sector’s decarbonisation efforts. Unlike fossil jet fuel (which is supplied through nearby refineries and outside airport control) SAFs provide an opportunity for airports to influence both supply and demand. ADP has taken an active role in this, making strategic investments in 2024 to promote SAF availability and advance SAF technology. This includes a dedicated fund supporting North American SAF innovations and a new production facility in Georgia, USA, with a 30 million gallon annual capacity.

ADP is also working with governments and airlines to accelerate demand for SAFs. Current European Union (EU) mandates require 2% SAF blending today, increasing to 6% by 2030 and 70% by 2050. Many large airlines have set their own targets of 10% SAF by 2030, with early commitments including letters of intent and offtake agreements. However, broader adoption—especially among smaller airlines—remains essential. The conversation also covered technological pathways such as alcohol-to-fuel and esterification, with synthetic fuels expected to mature by 2030.

While SAF remains 2.5–3 times more expensive than kerosene, it can be blended into conventional fuel up to 50% without requiring infrastructure upgrades. ADP noted some minor increases in ticket prices in France due to current blending levels, though the broader impact on travel behaviour remains uncertain. Overall, despite cost and scaling challenges, the industry is moving toward a more proactive role in reducing aviation emissions through SAF deployment.