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Savills Investment Management

PRI reporting framework 2018

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply
Policy components/types Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

The key investment principles which underlie Savills IM's philosophy are:

  • Income is a key driver in generating long term property performance, providing a stable and significant proportion of total returns over the long term. Securing and increasing income is therefore vital and we recognise that ESG factors affect building operational performance, vacancy rates and impact income performance.
  • An understanding of tenant requirements is fundamental to maintaining occupancy. We engage with tenants and other external stakeholders to understand their ESG policies, and encourage them to engage with our own.
  • Property is a real asset that must be actively managed to deliver sustainable returns; we recognise that ESG factors have a real economy impact on the performance of our property assets.

Rigorous investment processes are crucial to successful implementation of our investment philosophy. Our process seeks to:

  • Identify risks and opportunities, including specifically ESG factors at each stage of the process, from stock selection to asset management
  • Analyse portfolios and assets against each fund or client’s risk return profile and investment objectives on a continual basis

This process is overseen by Kiran Patel, Chief Investment Officer, and Richard Lake, Global Head of Investment Risk, who act as ‘guardians’ of the investment process.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

The elements which comprise the Savills Investment Management ESG Policy are laid out below. Our full policy is available on our website: http://www.savillsim.com/documents/sim-responsible-investment-policy-2018-03-21.pdf

Environmental Sustainability

We adopt best practice procedures for the promotion of sustainability issues across our business. We seek to engage with and, where possible, provide training for our staff to proactively lessen their impact on the environment. We consider sustainability issues throughout our investment processes, in asset selection, pre-purchase due diligence, our asset management and disposal strategies, recently developing thorough guidance for investment teams on ESG considerations during transaction decision making processes.

Social Equity

We recognise that our business has social obligations to our employees and trading partners. We also accept that the operation of our business should include consideration of the communities in which we function. Savills Investment Management invests in the personal development and welfare of employees by offering training opportunities to enhance skills and knowledge and further personal development opportunities are via charity volunteer leave, an initiative of the Charitable Giving Committee (CGC), encouraging staff to make a positive impact in the community. At the beginning of each year, the CGC agrees on a fundraising calendar outlining specific initiatives to maximise and govern staff fundraising opportunities over the 12 month period. Savills Investment Management offer an impartial Employee Assistance Programme to all staff, paying attention to personal well-being. We have Conflicts of Interest and ESG policies and also adhere to the Savills Plc (our parent company) Group Health and Safety, Anti-Corruption and Environmental policies.

Responsible Corporate Governance

We observe a set of fundamental standards of sound management and professional business conduct. We have a robust governance framework to manage and mitigate investment risk (including sustainability), the full details of which can be found in the ESG policy.

Reporting and Disclosure

We are committed to transparent monitoring and disclosure of ESG objectives and asset performance for the wider business and investment community. Progress on sustainability matters at an individual portfolio level is included as standard in quarterly investor updates and addressed in annual audited and interim reports. As a signatory, we fulfill our annual UNPRI reporting requirements at a corporate level and, where appropriate, Savills Investment Management funds participate in the annual GRESB survey. We review GRESB participation annually to ensure we participate in the benchmark survey for the most relevant of our funds.


SG 02. Publicly available RI policy or guidance documents

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

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Our Conflicts of Interest Policy identifies:

  • situations where conflicts may arise
  • types of conflict
  • disclosure
  • oversight; and
  • record-keeping
  • processes for resolution of conflict issues, where they occur. .

All employees are expected to be cognisant of potential conflicts and notify the Compliance Officer of risks where necessary. Principal areas at risk of conflict are deal allocation, conflicts between Savills IM and clients (e.g. regarding performance/transaction fees) and the appointment of third party services from a party related to Savills IM.

03.3. Additional information. [Optional]

To mitigate material risk to our clients' interests it is essential that conflicts of interest are identified and managed, where they might arise from services we provide and the regulated activities we perform.

Conflicts between service providers and counter parties are referred to the Board of Savills Investment Management (UK) Ltd by the Compliance Officer.  The appointment of professional services provided by connected firms will be made on a competitive basis with other parties invited to tender and the final selection made on a "best execution" basis.  Savills Investment Management will always endeavour to take all reasonable steps to obtain the best possible result for its clients in the execution of all contracts. The obligation to provide best execution for client funds impacts how we select and collaborate with third parties who work with Savills Investment Management. For example, in hiring professional services consideration would be given to a variety of factors including the experience of the principals both in terms of breadth and appropriateness, their geographic location, their knowledge and professional standing as well as the price of their services.

Savills IM has a governance structure which safeguards the independence of the risk management function, and the management of perceived and actual conflicts of interest. The register of conflicts of interest is reviewed quarterly, and the Conflicts of Interest policy is reviewed annually by our Risk Management Committee.

Where there is an actual or potential conflict of interest, Savills IM endeavours to act fairly, consistently and transparently where possible, subject to previously disclosed rules. This applies to potential or actual conflicts of interest between Savills IM (or its staff) and one or more clients, and also where there may be a conflict of interest between clients.


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

          ESG portfolio incidents would be picked up via either the Portfolio Management Committee (PMC) and the Transaction Advisory Committee (TAC), both delegated committees of the Savills IM Global Executive Committee (GEC), and both of which have the discussion of ESG issue in their remit. The PMC meets on a semi-annual basis, approximately one month after the end of each half year period, with ad hoc meetings held as required. The PMC’s role is to review, consider, endorse or reject proposals made by the relevant fund team in relation to the portfolio management activities of each client/fund portfolio. Specific considerations within the PMC’s remit where the discussion of ESG issues may arise are as follows:

1.	Individual portfolio investment objectives, benchmarks and return targets;
2.	Individual portfolio strategies including sustainability, acquisitions, asset management, disposals and financing;
3.	Portfolio investment performance and risk management; and
4.	Investor relations and issues. 

The TAC meets on a weekly and on an ad hoc basis to review, consider and endorse or reject the recommendations that fund teams wish to make to their relevant decision-making boards (under Savills IM's various advisory contracts) for investment purchases, sales or material capital expenditure and related debt/treasury issues. It is within the TAC’s remit to ensure sufficient consideration has been given to Corporate and fund ESG policies, for each transaction discussed.

Decisions presented to and made by the TAC are also logged and reviewed by a separate Risk Committee, which reports into the GEC and Savills PLC Boards.
        

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