ESG information is incorporated into the investment selection process by the inclusion of guidance on E, S and G factors in the TAC. Approval of any purchase, sale or major capex work from the TAC is required before detailed due diligence is undertaken and before binding commitments are made.
The committee requires that an explanation is provided of how the environmental sustainability objectives from our ESG Policy are reflected in the asset selection and/or asset plan:
- identifying rental growth prospects near an expanding public transport hub;
- identifying that possible improvements in environmental performance can be achieved: renewable energy, insulation, recycling, grey water conservation, occupier health / well being initiatives, in particular considering the costs/benefits of such initiatives;
- whether any interaction with tenant(s) has taken place to raise awareness of energy consumption; and
- querying whether the property complies with local environmental / energy performance / sustainability legislation, and providing an EPC rating if available.
Where available, BREEAM, LEED or equivalent environmental rating certificates are sought for the assets.
To help ensure the importance of ESG issues is understood in investment selection and portfolio management decisions, Green Asset Management, Development and Fit - Out guidelines are being produced to provide the necessary tools for teams to deliver asset management opportunities with sustainable performance in mind. We have developed an extensive list of ESG criteria for our standard TAC paper template, prompting the analysis, research and understanding of ESG aspects in investment decisions.
Fund Managers may commission independent environmental surveys from technical consultants to identify possible ESG issues ahead of purchase. Green Due Diligence services are provided by our sustainability consultants at the request from the fund's portfolio manager for each proposed transaction. This comprises a thorough assessment of EPC rating, flood risk, energy usage, water, waste, BREEAM rating, materials used, transport links, and air quality.