The world is undergoing significant changes as it navigates the energy transition, marking a shift toward innovative and more efficient energy sources. In this evolving context, indices can play a crucial role by offering diverse measurements that represent various facets of the energy transition.¹

Buildings, which account for a substantial portion of global energy consumption attributed to the real estate sector,² are at the forefront of this transition. The Dow Jones Global Select ESG Tilted Real Estate Securities Index (RESI) exemplifies how indices can provide a framework for evaluating Real Estate that is responsive to the demands of the energy transition.

Launched in 2021, the Dow Jones Global Select ESG Tilted RESI measures the performance of publicly traded Real Estate securities from its benchmark, the Dow Jones Global Select RESI, that meet sustainability criteria. The index targets to improve the GRESB Total ESG score relative to the underlying index by overweighting those companies with higher GRESB scores and underweighting those with lower or no scores.³

As illustrated in Exhibit 1, since its launch, the index performed similarly to its benchmark, the Dow Jones Global Select RESI, and achieved an excess total return of 0.12% for the one-year period ending March 31, 2025.

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Digging deeper into the GICS Real Estate sub-industries within this index reveals important insights related to their contribution to the Dow Jones Global Select ESG Tilted RESI’s relative performance for the one-year period ending March 31, 2025, as well as their respective carbon intensity, as illustrated in Exhibit 2. The size of the bubbles corresponds to the level of carbon intensity, with larger bubbles representing a greater carbon footprint. Additionally, the color gradient illustrates the different levels of carbon intensity, ranging from dark blue for the highest intensity to light blue for the lowest.

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A notable example is Data Center Real Estate Investment Trusts (REITs), which have become increasingly relevant due to the surge in demand for artificial intelligence, which is powered by data centers. Data centers are energy-intensive, requiring substantial energy supplies to function. Despite their significance in a technology-driven economy, they detracted from the Dow Jones Global Select ESG Tilted RESI’s relative performance by 0.11% and stood out as the most carbon intensive Real Estate sub-industry.

Conversely, the Health Care sub-industry had the largest contribution to the index’s relative performance, with 0.34%, but it also had the second-highest carbon footprint.

In conclusion, the Dow Jones Global Select ESG Tilted RESI can serve as a vital tool for understanding how the energy transition is influencing the Real Estate sector. As the world continues to evolve toward more efficient and newly emerging energy practices, such indices can be instrumental in measuring the unique role the Real Estate sector plays in the world’s energy future.

¹ For an overview of indices in the energy transition context, see: Beyhan, Maya and William Kennedy. “The Role of Indices in the Energy Transition.” S&P Global. Look Forward Journal. March 4, 2025.

² For a thorough overview of the role of buildings in energy systems, see: International Energy Agency

³ See the Dow Jones ESG Real Estate Indices Methodology.

⁴ For more information, see: Index Carbon Metrics Explained.

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