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CBRE Global Investors

PRI reporting framework 2018

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You are in Indirect – Manager Selection, Appointment and Monitoring » Selection

Selection

SAM 02. Selection processes (LE and FI)

02.1. Indicate what RI-related information your organisation typically covers in the majority of selection documentation for your external managers

Your organisation’s investment strategy and how ESG objectives relate to it

ESG incorporation requirements

ESG reporting requirements

Other

No RI information covered in the selection documentation

Property
Investment strategy and how ESG objectives relate to it
ESG incorporation requirements
ESG reporting requirements
Other
No RI information covered in the RFPs

If you select any 'Other' option(s), specify

02.2. Explain how your organisation evaluates the investment manager’s ability to align between your investment strategy and their investment approach

Strategy

Assess the time horizon of the investment manager’s offering vs. your/beneficiaries’ requirements

Assess the quality of investment policy and its references to ESG

Assess the investment approach and how ESG objectives are implemented in the investment process

Review the manager’s firm-level vs. product-level approach to RI

Assess the ESG definitions to be used

Other

None of the above

Property
Assess the time horizon of the investment manager’s offering vs. your/beneficiaries’ requirements
Assess the quality of investment policy and its reference to ESG
Assess the investment approach and how ESG objectives are implemented in the investment process
Review the manager’s firm-level vs. product-level approach to RI
Assess the ESG definitions to be used
Other
None of the above

ESG people/oversight

Assess ESG expertise of investment teams

Review the oversight and responsibilities of ESG implementation

Review how ESG implementation is incentivised

Review the manager’s RI-promotion efforts and engagement with the industry

Other

None of the above

Property
Assess ESG expertise of investment teams
Review the oversight and responsibilities of ESG implementation
Review how is ESG implementation enforced /ensured
Review the manager’s RI-promotion efforts and engagement with the industry
Other
None of the above

Process/portfolio construction/investment valuation

Review the process for ensuring the quality of the ESG data used

Review and agree the use of ESG data in the investment decision making process

Review and agree the impact of ESG analysis on investment decisions

Review and agree ESG objectives (e.g. risk reduction, return seeking, real-world impact)

Review and agree manager’s ESG risk framework

Review and agree ESG risk limits at athe portfolio level (portfolio construction) and other ESG objectives

Review how ESG materiality is evaluated by the manager

Review process for defining and communicating on ESG incidents

Review and agree ESG reporting frequency and detail

Other, specify

None of the above

Property
Review the process for ensuring the quality of the ESG data used
Review and agree the use of ESG data in the investment decision making process
Review and agree the impact of ESG analysis on investment decisions
Review and agree ESG objectives (e.g. risk reduction, return seeking, real-world impact)
Review and agree manager’s ESG risk framework
Review and agree ESG risk limits at athe portfolio level (portfolio construction) and other ESG objectives
Review how ESG materiality is evaluated by the manager
Review process for defining and communicating on ESG incidents
Review and agree ESG reporting frequency and detail
Other, specify
None of the above

If you select any 'Other' option(s), specify

02.3. Indicate the selection process and its ESG/RI components

02.4. When selecting external managers does your organisation set any of the following:

ESG performance development targets

ESG score

ESG weight

Real economy influence

Other RI considerations

None of the above

Property
ESG performance development targets
ESG score
ESG weight
Real world economy targets
Other RI considerations
None of the above

If you select any 'Other' option(s), specify

We engage with our investee funds globally to improve their performance but we do not set specific targets at present. There are a wide range of environmental regulations and adoption of ESG practices across global markets varies significantly. CBRE GIP also invests in a range of property sectors including more niche sectors that do not yet have a benchmark for comparison. CBRE GIP works with all investee funds to improve their ESG performance from early adopters who have already achieved a lot of savings in energy, water and waste management and are now focused on tenant well-being, to the late adopters who have only recently started analyzing their energy and water consumption. We actively encourage investee funds to participate in accreditation systems (in-country or international) and provide performance updates in their regular reporting. To date, we have not linked the achievement of ESG objectives or targets and the remuneration of the underlying fund managers.

02.5. Describe how the ESG information reviewed and discussed affects the selection decision making process.[OPTIONAL]

          Prior to investing, GIP actively ensures that the manager has the policies, systems and expertise needed to integrate environmental considerations into their investment decisions and ownership activities; that the operating partner will not engage in socially irresponsible activities; that the operating partner’s governance provisions meet best practice standards; and that reporting will meet GIP requirements for transparency. 
We provide our Responsible Investment Policy and request a copy of their equivalent. 
We include ESG related questions in our Due Diligence Questionnaire
We confirm whether the manager is a signatory or are committed to the PRI. 
We highlight our ESG requirements early in the selection process: Participation in annual GRESB survey, quarterly reporting on ESG issues (including GRESB), and agreeing to a building use exclusion list: uranium, armaments, tobacco, gambling, pornography, endangered wildlife, child labour etc. 
CBRE GIP’ negotiates preferred underlying investment terms in line with best practice including references to governance best practice, prohibited uses/exclusions, participation in GRESB annual survey, compliance with GIP valuation policy, reporting etc. 
If managers are not prepared to meet our requirements and work towards our common goal, then we will not select them. We look to engage with managers to "bring them along the journey" and will invest with managers may not be quite there yet but who are keen to improve their ESG processes willing and able.
CBRE GIP includes our assessment of operating partner/fund manager’s approach to ESG in investment recommendation papers: strategy, due diligence process when acquiring buildings, team resources, adequacy of financial reporting, internal controls procedures, track record of good corporate governance and transparent engagement with investors. We undertake reference checks with prior investors if it is a first time investment with the manager. We note CBRE GIP has a strict internal investment process which is externally audited annually.
When monitoring the investment, we report on the GRESB survey results, monitor for any breaches "Red Flags" and escalate to GIP ESG Incident Response Team and request annual confirmation from the manager that they have complied with our Side Letter.
        

SAM 03. Evaluating engagement and voting practices in manager selection (listed equity/fixed income) (Not Applicable)


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