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Universities Superannuation Scheme - USS

PRI reporting framework 2018

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - INF 03]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Indirect – Manager Selection, Appointment and Monitoring
Listed Equity and Fixed Income Strategies [SAM 01] Selection [SAM 02 - 03] Appointment [SAM 04] Monitoring [SAM 05 - 07] Outputs and outcomes [SAM 08 - 09]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG issues [LEI 08 - 10] Outputs and outcomes [LEI 12 - 14]
Direct - Listed Equity Active Ownership
Engagement [LEA 01 - 14] Overview [LEA 01 - 02] Process [LEA 03 - 10] Process for engagements run internally [LEA 03 - 04] Process for engagements conducted via collaborations [LEA 05 - 06] Process for engagements conducted with/on your behalf by service providers [LEA 07 - 08] General processes for all three groups of engagers [LEA 09 - 10] Outputs and outcomes [LEA 11 - 14] (Proxy) voting and shareholder resolutions [LEA 15 - 24] Overview [LEA 15] Process [LEA 16 - 20] Outputs and outcomes [LEA 21 - 24]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 13] Implementation processes [FI 01 - 03] (C) Implementation: Integration [FI 11 - 13] ESG incorporation in passively managed fixed income [FI 14] Fixed income - Engagement [FI 15 - 17] Outputs and outcomes [FI 18 - 19]
Direct – Private Equity
Overview [PE 01 - 02] Pre-investment (selection) [PE 05 - 08] Post-investment (monitoring) [PE 09 - 13] Outputs and outcomes [PE 14 - 15]
Direct - Property
Overview [PR 01] Pre-investment (selection) [PR 04 - 06] Selection, appointment and monitoring third-party property managers [PR 07] Post-investment (monitoring and active ownership) [PR 08 - 14] Overview [PR 08] Property monitoring and management [PR 09 - 10] Property developments and major renovations [PR 11] Occupier engagement [PR 12 - 13] Community engagement [PR 14] Outputs and outcomes [PR 15 - 16]
Direct - Infrastructure
Overview [INF 01 - 02] Pre-investment (selection) [INF 05 - 09] Selection, appointment and monitoring of third-party operators [INF 10] Post-investment (monitoring and active ownership) [INF 11 - 16] Overview [INF 11] Infrastructure monitoring and operations [INF 12 - 14] Infrastructure maintenance [INF 15] Stakeholder engagement [INF 16] Outputs and outcomes [INF 17 - 18]
Assurance
Assurance [CM1 01.1 - 01.7]
Export Public Responses
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You are in Direct - Property » Pre-investment (selection)

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.

The risks of ESG impacts are investigated when considering direct acquisitions.  Any material impacts which have a financial bearing are mitigated following purchase against agreed key performance indicators.

ESG impacts are an important consideration within our pre-investment process.  We carry out detailed due diligence, in line with our Responsible Property Investment Policy commitment of “investigating the risk of environmental and social impacts when considering direct acquisitions and aiming to mitigate them following 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

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          A Phase I Environmental Audit will always be undertaken as part of any acquisition to ensure we fully understand any contaminated land risks.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          A flood risk assessment will always be undertaken to ensure the property is not at risk.  The vendor is also asked if they are aware if flooding has ever occurred at the property.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          An Energy Performance Certificate (EPC) will always be required as part of any transaction.  The vendor is also asked what energy efficiency improvements have been undertaken at the property.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          A copy of the landlord/tenant meeting minutes will always be asked for to understand tenant sentiment.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          If the property is considered to be in an area where access is constrained we may seek from the vendor a green travel plan.  We also encourage bike storage and changing facilities.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          In a recent residential acquisition we looked at what procedures were in place if a tenant were to fall into arrears, ensuring a grace period was in place and assistance was provided where possible.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          As part of our due diligence we ensure a robust anti-bribery and corruption policy is in place, and it is being enforced.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          Again, as part of our due diligence we also ensure a robust governance structure is in place, and it is being enforced.

List up to three typical examples per E, S and G issue

Description [OPTIONAL] 

          Our legal team particularly look at the regulatory framework relating to acquisitions. This ensures the property purchase, condition and day to day operation does not fall foul of any regulatory requirements.

04.4. Additional information. [Optional]

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.

An example of raw ESG data we explore prior to acquisition is energy consumption. The data enable us to understand better the efficiency of the asset, what parts are the responsibility of the landlord and the tenant, what potentially could be done to make the asset more efficient, and whether the ownership will affect the scheme under the Carbon Reduction Commitment.

Environmental Consultants are typically appointed as external advisors to undertake environmental Due Diligence.

Further case studies are outlined in PR4.3 and PR.16.

 

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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