Real Estate and Private Markets:
With respect to our externally managed assets, we see ESG factors as an important part of our overall due diligence process. Information on the target funds' ESG policies is collected as part of the due diligence questionnaire that target fund managers complete at our request. Whilst we prefer funds that have strong ESG policies, the quality of a fund's ESG policies will not form the basis of our decision alone. We will also consider how it incorporates these policies into the fund strategy, how it reports its ESG strategy to its investors, what relevant laws and regulations impact the fund, and any sustainability initiatives the fund is already participating in. This information is then incorporated into the investment decision making process.
The benefits of this process may include: limiting the risk of regulatory non-compliance, maintaining properties' competitive position in the market, increasing the appeal of a property to tenants and purchasers, and in some cases, reducing expenses and improving returns.
The majority of our Real Estate and Private Market fund of funds have implemented ESG policies, are signatories to the PRI and participate in the GRESB survey (Global Real Estate Sustainability Benchmark).