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CBRE Global Investors

PRI reporting framework 2018

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Pre-investment (selection)

PR 04. Incorporating ESG issues when selecting investments

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if your organisation typically incorporates ESG issues when selecting property investments.

04.2. Provide a description of your organisation's approach to incorporating ESG issues in property investment selection.

In our Due Diligence Checklists, we include measurable sustainability factors appropriate to the asset class and market.

We require investment teams to evaluate opportunities for green improvements for each asset prior to acquisition. 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.

04.3. Indicate which E, S and/or G issues are typically considered by your organisation in the property investment selection process, and list up to three examples per issue.

ESG issues

Description [OPTIONAL]

          As part of the due diligence process for acquisitions, we hire third-party experts to review energy efficiency and provide recommendations for improvements if consumption is higher than standard. We review the EPC and other equivalent ratings of the property. We typically invest in modern buildings with high green ratings.
        

Description [OPTIONAL]

          We assess flooding risks and either avoid those areas or create mitigation and contingency plans. We have had examples of flooding in underground parking garages so assess that risk during the acquisition due diligence process as well.
        

Description [OPTIONAL]

          As part of the selection process, we assess access to public transportation which is particularly important for retail and office assets, whereas transportation networks and hubs are important for logistics assets. The transportation connectivity is a key component in the investment selection process.
        

Description [OPTIONAL]

          A detailed evaluation of the physical characteristics of a property considered for acquisition is conducted by engineers. As part of that evaluation, building safety and materials are assessed. For example, elevator certifications are reviewed, fire protection systems are tested and an investigation for asbestos or other harmful substances is conducted.
        

Description [OPTIONAL]

          As part of the selection and due diligence process for acquisitions we assess the satisfaction of tenants. As an example, for retail assets, we deeply analyzes sales achieved by the tenants, consumer behavior and historical rotation at the center all indicators of occupier satisfaction. If the outcome of this analysis demonstrates potential for improvement, we develop a business plan which incorporates actions to increase tenant satisfaction and performance.
        

Description [OPTIONAL]

          During the selection process, we evaluate accessibility and will not proceed unless we can ensure that all accessibility regulations can be met.
        

Description [OPTIONAL]

          CBRE Global Investors is committed to following anti-money-laundering (AML) laws and regulations everywhere we do business. Combating money laundering requires vigilance and assistance from every employee at every level in our organization. Failure to do so could have a detrimental impact on our reputation. To ensure that, we are not used for money-laundering and bribery, we identify, assess, monitor and manage money laundering risk, which are comprehensive, and proportionate to the nature, scale and complexity of our real estate activities. We focus on: “customer” identification, verification, acceptance, and record keeping. “Customers” includes clients, investors, joint venture partners, and transaction partners. The key requirement is Customer Due Diligence (CDD), which must be performed before the establishment of a business relationship (i.e. prior to entering into any formal (contractual) relationship), or giving any legal and binding undertaking to do so.
        

Description [OPTIONAL]

          Our funds/accounts may retain CBRE and its affiliates to provide services for fund investments, which creates a potential conflict of interest. The structure of the Firm’s relationship to its parent and affiliates serves to minimize this conflict of interest, as follows:
	(1) All investment decisions, including the selection of service providers, are made solely by CBRE Global Investors professionals.
	(2) No employee of CBRE Global Investors is financially rewarded in any way for fees paid to affiliates. There is no financial incentive to engage or retain affiliates other than on the basis of performance and cost.
	(3) The compensation of senior management and investment teams is largely dependent upon portfolio performance which aligns the economic interests of investment professionals with investor clients and partners.
	(4) The relationship between the Fund and affiliated service providers is governed by an agreement which ensures access to the highest quality professionals on arm's length terms and outlines the services to be delivered by CBRE.

To further mitigate conflicts of interest and avoid any potential incentive to direct business to CBRE on behalf of client accounts, the Firm prohibits its employees from owning CBRE stock without the consent of senior management and the Global Chief Compliance Officer. In addition, all investment professionals must disclose to senior management and the Compliance Department any personal investments in third party funds, partnerships, joint ventures, individual commercial real estate assets, or otherwise which may have overlapping investment objectives with any CBRE Global Investors’ investment programs.

CBRE Capital Advisors is the investment banking business of CBRE. Any use by one of our funds of CBRE Capital Advisors’ services will be subject to the control and limitations on affiliate engagements.
        

Description [OPTIONAL]

          CBRE Global Investors’ corporate and investment operations are overseen by a Global Executive Committee (“GEC”), Global Investment Committee (“GIC”), Regional Investment Committees (Americas, EMEA and Asia Pacific), Portfolio Oversight Committees and Regional Risk Committees. These committees work together to ensure proper execution of our investment strategies, consistent application of our Investment Management Policies and Procedures and compliance with local and regional regulatory requirements. The GEC oversees the strategic direction of CBRE Global Investors, establishes global investment programs, and designs and implements the material policies and procedures governing our operations, including our ESG practices. 

Investment risk is overseen by the Global Investment Committee and Regional Investment Committees, which monitor all capital transactions within our investment programs. These committees ensure that investment teams place the proper emphasis on preservation of capital, identification and management of investment risk and appropriate pricing of risk at the portfolio and property level.
CBRE Global Investors’ portfolio oversight committees are responsible for monitoring portfolio risk and reviewing each of the investment portfolios on a semi-annual basis in each region.
The regional risk committees are tasked with identifying, capturing, assessing, managing and monitoring the operational risks including litigation, insurance and regulatory compliance, tax and IT disaster recovery procedures.
        

04.4. Additional information. [Optional]

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).


PR 05. Types of ESG information considered in investment selection (Private)


PR 06. ESG issues impact in selection process

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if ESG issues impacted your property investment selection process during the reporting year.

06.2. Indicate how ESG issues impacted your property investment deal structuring processes during the reporting year.

          During due diligence, asbestos was discovered. The deal was structured requiring the seller to remove the asbestos and therefore delayed the closing.
        

06.3. Additional information.


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