In our business, Environmental, Social and Governance (ESG) practices are more than trends; they’re fundamental to the business strategy of our Firm, our investors, our tenants and the key stakeholders in the communities, properties and funds in which we invest.
CBRE Global Investors’ mission is to provide real estate investors with exceptional performance worldwide and the Firm recognizes that taking ESG considerations into account in any investment decision are integral to enhance returns and preserve value for our investors.
We see ESG management as an key element of our investment operations during the entire investment lifecycle. We don’t only focus on new acquisitions, furthermore we actively drive the sustainability improvement of all our investments during the entire lifecycle of our investments.
At CBRE Global Investors, a specific emphasis is placed on environmental sustainability and improving the environmental footprint of each asset under management. We recognize that we can make a tangible impact on improving energy efficiency, reducing greenhouse gas emissions and slowing climate change.
As such, we require investment teams to evaluate opportunities for green improvements for each asset prior to acquisition and to track efficiency during the hold period with clear guidelines that we implement across our global investment programs at all stages – starting with the acquisition due diligence process and continuing throughout our asset management activities. We routinely engage third-party consultants to evaluate the physical and environmental characteristics of potential investments to identify opportunities for improvements that would reduce a property’s environmental impact.
Each team considers these findings when defining the investment strategy and capital expenditure program for a property, including location; energy savings; building environmental characteristics (orientation, facades, landscape, etc.); presence of harmful materials or contamination; access to public transportation and environmental characteristics impacting tenants (luminosity, olfactory comfort, etc.); as well as other relevant sustainability factors.
Portfolio level: Portfolio-level strategies include material ESG factors for our discretionary funds. CBRE Global Investors works with our non-discretionary separate account clients on the implementation of appropriate ESG initiatives designed to enhance portfolio performance.
Exclusions: We seek to exclude investments in assets with a major use being in industries involved with armaments (manufacture or storage), nuclear/unknown, tobacco and tobacco-related products, gambling, pornography, child labor, and endangered or protected substances (e.g. ozone depleting substances).
New acquisitions: Due diligence checklists include measurable ESG factors appropriate to the asset class and market.
Existing portfolio assets:
The Annual Business Plan and Hold-Sell Analysis include measurable ESG factors appropriate to the asset class and market.
Semi-annual reporting processes include measurable ESG factors appropriate to the composition of the portfolio.
Vendor contracts (including property managers) include implementation and reporting of ESG factors when appropriate.
In addition, we join CBRE’s central procurement initiatives to track vendor ESG performance when appropriate.
Partial interest/joint venture assets: CBRE Global Investors supports and educates all partners on ESG issues as applicable. We work with all partners to develop and implement measurable ESG asset management initiatives.
Refurbishment: Capital expenditure programs and refurbishment strategies evaluate the possibility of improving all aspects of the asset including addressing ESG issues. If an ESG improvement project is determined to be unfeasible (e.g. uneconomic, pay-back period too long, not approved by investors) this is documented.
New development: New developments incorporate the highest ESG standards feasible and attain an international green certification, such as LEED, BREEAM, Green Rating, Energy Star, HQE when appropriate.
Leasing and operations: Investment teams:
Provide a tenant signing a new lease with the opportunity to participate in an ESG memorandum of understanding or include Green Lease clauses in their standard lease agreement.
Engage tenants through an annual tenant satisfaction survey.
Engage employees of our tenants through programming as part of our proprietary operating programs for office, retail, and multi-family assets.
Provide customer service and other trainings for our service provider staff.
Hold-Sell Analyses include ESG improvements to each asset and measurable results as a result of the improvements.
Due Diligence Checklists include measurable ESG factors appropriate to the asset class and market.