How London Stock Exchange Group and Measurabl Are Advancing Green Indexes with Investment-Grade Data
As part of London Stock Exchange Group (LSEG), FTSE Russell is one of the world’s most influential benchmark providers, guiding capital flows across global public markets. Entrusted with over USD $320 billion in benchmarked assets, FTSE Russell is advancing a new generation of sustainability-linked benchmarks—ones that directly connect financial performance with measurable environmental outcomes.
Powered by Measurabl’s investment-grade data from Quantum—unmatched in its breadth and depth—these benchmarks enable institutional investors to allocate capital with greater precision, transparency, and impact.
This shift reflects a broader evolution in capital markets. Green loans, sustainability-linked bonds, and optimized indexes are accelerating the flow of capital into low-carbon solutions. And as the volume and quality of sustainability data improves, so does the ability to act.
Challenge
Despite real estate’s significant contribution to global emissions, its sustainability performance has historically been difficult to measure—and even harder to compare. Investors have long struggled to incorporate this information into financial decision-making due to a lack of consistent, timely, and credible asset-level insights.
Even within the FTSE EPRA Nareit Developed Index, only 62% of listed companies report Scope 1 and 2 emissions—and among those that do, disclosure practices vary widely.
As a result, investors have often relied on proxy scores, building certifications, or portfolio-level disclosures—none of which offer a reliable view into real-world performance. This has led to capital being misaligned with actual sustainability risks and opportunities.
Closing the Gap
To address this gap, FTSE Russell partnered with Measurabl to launch a new generation of sustainability-linked benchmarks, powered by Measurabl Quantum—the world’s largest repository of real estate sustainability data, spanning 110,000 properties, 20 billion square feet, and $3 trillion in AUM across more than 100 countries.
Through this partnership, FTSE Russell uses ESGx Securities to incorporate consistent, investment-grade sustainability data into the FTSE EPRA Nareit Developed Index—delivering greater granularity and comparability across listed property companies.
Unlike most indices that exclude companies that do not have certain sustainability credentials, FTSE Russell’s methodology is performance-optimized:
- Index weights are informed by actual sustainability metrics such as carbon intensity, operational energy use, and green building certifications.
- Companies demonstrating measurable improvement—not just top-tier performance—can gain index weight and attract capital.
The result is an inclusive, transparent approach that rewards progress over perfection.
“As global REIT benchmark setters with $320B in benchmarked assets, we have a responsibility to guide capital toward companies with clear sustainability credentials. Measurabl’s asset-level approach allows us to deliver benchmarks with real sustainability uplift.”
— Ali Zaidi, LSEG
This model empowers investors to allocate capital with greater confidence—while encouraging REITs and real estate companies to accelerate their decarbonization strategies. The selected metrics are globally applicable and measurable across both public and private portfolios.
Rather than penalizing companies for falling short, this approach incentivizes forward momentum. It reflects real-world challenges and provides both a compass and a catalyst for transformation.
Real World Momentum
This shift marks a fundamental shift in how sustainability performance translates into financial value. It delivers clarity—for investors, REITs, and lenders alike. It establishes a direct link between sustainability investments and financial outcomes, with a methodology that evolves as new inputs are validated.
“Sustainability pays through superior access to capital. This isn’t a theory—it’s happening now.”
— Matt Ellis, CEO & Co-Founder, Measurabl
In 2024, BlackRock launched the iShares Global Real Estate Environmental Tilt UCITS ETF, which tracks the FTSE EPRA Nareit Developed Green Low Carbon Target Select UCITS Capped Index, now improved by Measurabl’s company-level data (ESGx Securities). The ETF aims for at least a 20% better environmental performance than its broader investment ecosystem, favoring more sustainable issuers. This alignment between sustainability and finance is mutually reinforcing: as capital flows into ESG-aligned assets, it funds improvements that drive further reductions in energy and carbon intensity.
And the impact goes well beyond ETFs. Institutional mandates, lender risk assessments, and broker valuation models are increasingly aligned with a new standard: one where sustainability performance is visible, verifiable, and financially material.
This approach—outlined in the joint white paper Carbon Disclosures in Listed Real Estate—is already driving industry adoption. FTSE Russell and Measurabl are continuing to expand coverage and explore additional use cases to meet market demand.
“Billions of dollars are already aligning with sustainability metrics. If you’re not investing in transparency and performance, you’re falling behind.”
— Ali Zaidi, LSEG
At Blueprint 2024, Matt Ellis and Ali Zaidi discussed the role of asset-level data in reshaping investment strategy, compliance, and valuation. Their session, “What Real Estate Investors Need to Know About Carbon,” showcased how better data is driving better capital decisions. Watch the full session here.
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