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Savills Investment Management

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.

Approval of the proposal of any investment by 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.

A Green Due Diligence service is provided by our sustainability consultants at 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. Fund Managers may also commission an independent environmental survey to identify possible ESG issues ahead of purchase.

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]

          1. What is the Energy Performance Certificate (EPC) rating? (Obtain existing Certificate(s) and Recommendation Report(s) covering all property units or letable demises) 
2. Is there a Display Energy Certificate (DEC)? What is the rating?  (Obtain the certificate(s) and Recommendation Report(s))
        

Description [OPTIONAL]

          Is there any known ground contamination at the property? (Obtain relevant ground contamination reports e.g. Phase 1 and 2).
        

Description [OPTIONAL]

          1. Is there a Green Travel Plan in place for the site for the asset? (Obtain copy). 
2. Have Travel Surveys been undertaken with tenants / customers? (Obtain copy). 
3. Are there existing electric vehicle charging points? If so, what are the contractual arrangements with the charging point installer?
        

Description [OPTIONAL]

          Are there strong existing community frameworks or groups that might object or have specific engagement requirements during acquisition or future development phases? Explore prospective local community groups, charities or schools within the vicinity for future community engagement opportunities.
        

Description [OPTIONAL]

          Have occupancy satisfaction and perception surveys been carried out? (Obtain historical tenant surveys).
        

Description [OPTIONAL]

          Have convenience factors, such as ‘walk-ability’ or score or design and access statement been assessed?
        

Description [OPTIONAL]

          Was there any conflict in asset allocation process? If so, how was this resolved?
        

Description [OPTIONAL]

          Include a description of the proposed acquisition and ownership structures.
        

Description [OPTIONAL]

          
        

04.4. Additional information. [Optional]

In addition to the above E, S and G issues, consideration of the following are recommended at the TAC, in relation to transaction decisions:

  • Biodiversity
  • Heritage
  • Certification
  • Health and Safety Risk Assessment

PR 05. Types of ESG information considered in investment selection

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

05.1. Indicate what type of ESG information your organisation typically considers during your property investment selection process.

05.2. Provide a brief description of how this ESG information was incorporated into your investment selection process.

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.


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.

06.3. Additional information.


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