As noted previously, HMC conducts ESG due diligence on its potential joint venture partner. This includes a consideration of the potential joint venture partner's ability to manage ESG issues.
HMC also conducts ESG due diligence on the property itself. For example, we hire third-party experts to conduct environmental evaluations of the property, and also consider potential labor-related issues that may be associated with the property. We identify any existing litigation or regulatory violations associated with the property, which could encompass both environmental and social concerns.
If this initial due diligence identifies any material ESG risks, we consider how we can eliminate or mitigate this risk, and factor this into our investment decision. For example, we would consider energy inefficiencies, and how these can be improved.