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InfraRed Capital Partners Limited

PRI reporting framework 2019

Export Public Responses

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Post-investment (monitoring and active ownership)

Overview

PR 08. ESG issues in post-investment activities

08.1. Indicate if your organisation, and/or property managers, considers ESG issues in post-investment activities relating to your property assets.

08.2. Indicate whether your organisation, and/or property managers, considers ESG issues in the following post-investment activities relating to your property assets.

          Requirement for third party providers to comply with InfraRed's ESG policy in the conduct of their activities.
        

08.3. Describe how your organisation, and/or property managers, considers ESG issues in post-investment activities related to your property assets.

Property / asset management reports typically cover ESG activities undertaken on a month by month basis.

In the case of retail properties in particular, community engagement initiatives are ever more important to create successful environments for our retailers and a visceral connection between our assets and the communities they serve. Such initiatives are monitored on a monthly basis, with twice yearly Centre Manager meetings to ensure knowledge is shared and a culture of continual improvement created around the team’s ESG thinking and execution. This has led to a wide range of initiatives being delivered in 2018 that tie into InfraRed’s sustainability themes, as well as driving the agenda through the supply chain.

With regard to new developments and major refurbishments, we typically seek recognised environmental certifications, as outlined in this submission. We also require advisers to provide environmental impact statements to accompany refurbishment proposals, so the impact on E&S can be considered in the approval process.

Moreover, InfraRed asset managers actively engage and encourage service providers to deliver initiatives around the ESG agenda.

ESG initiatives identified during the selection process are recorded in InfraRed's property management database - initiative, capital spend and timing for delivery - and reports have been developed to monitor progress against Business Plan.

In addition, Managing Agents are required to record utility consumption, waste to landfill / recycling and EPCs within InfraRed's property management database, whilst precedent leases prevent occupiers from undertaking works that will negatively impact the energy performance characteristics of their premises.

Once an investment has been made, ESG matters (including environmental compliance, health and safety matters, service provider performance and anti-bribery compliance) are continually monitored. Any issues identified are notified to the Investment Committee as soon as possible, and in any event, set out in the quarterly report produced by the relevant Asset Manager for each investment. These issues are discussed and considered at the Quarterly Portfolio Review with the relevant Investment Committee. Where shortcomings are identified, immediate actions are taken to rectify the position.

ESG is the first item on the agenda at each board meeting of the relevant General Partner. Discussions include corporate governance, compliance, adherence to anti-bribery and health and safety policies and any issues relating to ESG.


Property monitoring and management

PR 09. Proportion of assets with ESG targets that were set and monitored

09.1. Indicate the proportion of property assets for which your organisation, and/or property managers, set and monitored ESG targets (KPIs or similar) during the reporting year.

(in terms of number of property assets)

09.2. Indicate which ESG targets your organisation and/or property managers typically set and monitor

Target/KPI
Progress Achieved
          Introduce LED lighting at all asset classes
        
          Refurbish office buildings to recognised "green" standard
        
          Pro-active approach to complying with MEES legislation
        
          Culture established of replacing light fittings with LED - in both front and back of house locations. It has become routine practice in Business Plans.
        
          London, Paris and German office themes have delivered refurbishments to local / international green standards as a fundamental part of Business Plans.
        
          Strategy implemented for existing assets to identify works required to take non-compliant units (in 2018) to EPC rating of E or higher.
        
Target/KPI
Progress Achieved
          Inclusion
        
          Health and Wellbeing
        
          Community Engagement
        
          All six shopping Centres within InfraRed’s portfolio achieved Disability Confident status – a scheme run by the Department of Work and Pensions.
        
          A range of H&W initiatives were delivered all projects. Ping pong parlours opened in shopping centres, cycle/shower facilities added in offices among other things.
        
          Sports sponsorship from one Chinese asset. Significant Community engagement activities across the retail portfolio, as part of InfraRed’s Operational Excellence theme in this space.
        
Target/KPI
Progress Achieved
          Independent audit of managing agent approach to Health & Safety
        
          Standardised appointment documentation for building contractors and construction professionals
        
          Quarterly reporting to Investment Committee to review progress of ESG initiative implementation and legislative compliance.
        
          InfraRed commissioned an independent audit of managing agent practice around H&S, to drive further consistency across the European portfolio. No material concerns were raised.
        
          Consistent process established for construction projects, reflecting fit for purpose in each geographic jurisdiction.
        
          ESG and legislative compliance is a standing agenda item at Investment Committee quarterly review meetings.
        

09.3. Additional information. [Optional]

The ESG policy was formally established in 2013, to formally record ESG performance and this has been adopted on all transactions from 2013.


PR 10. Certification schemes, ratings and benchmarks (Private)


Property developments and major renovations

PR 11. Proportion of developments and refurbishments where ESG issues were considered

11.1. Indicate the proportion of active property developments and major renovations where ESG issues have been considered.

(by number of active property developments and refurbishments)

11.2. Indicate if the following ESG considerations are typically implemented and monitored in your property developments and major renovations.

11.3. Additional information. [Optional]

French office theme is focussed on creating "green" buildings and letting space on green leases to ensure premises are used in an environmentally effective way. Underwrite seek to achieve minimum of HQE Excellent and BREEAM Good/Very Good.

Significant office development activity in Germany, where a range of energy efficient solutions are developed, from locally sourced materials, use of natural ventilation, chilled beam ventilation.

Refurbishment orientated projects, as opposed to ground up development, focus on using low energy components, such as LED lights, controls on M&E to minimise energy consumption during periods of low use, etc

Where possible, initiatives aimed at improving the health and wellbeing of office workers and nearby residents are incorporated. In the case of new developments, this typically occurs where InfraRed is placemaking. For example a public realm plan has been agreed with the local authority in respect of a 100,000 sqm office park to be built on c.7 hectares of former industrial land in Düsseldorf-Ratingen. Upon delivery, this will provide a pedestrianized thoroughfare, bicycle paths and significantly improved landscape specification. The regeneration plan for this former industrial site includes significant soil decontamination work.

At a 25,000 sqm office in Munich, not only was the building fully refurbished, but InfraRed re-landscaped a large courtyard, which is open to the public.


Occupier engagement

PR 12. Proportion of property occupiers that were engaged with

12.1. Indicate the proportion of property occupiers your organisation, and/or your property managers, engaged with on ESG issues during the reporting year.

(in terms of number of occupiers)

12.2. Indicate if the following practises and areas are typically part of your, and/or your property managers’, occupier engagements.

12.3. Additional information. [Optional]

ESG policy was implemented in 2013 on all new acquisitions across the different funds, and in China the ESG Policy was incorporated into the tenant handbooks.

Tenant satisfaction surveys have been carried out across all UK shopping centre assets. Several shopping centres have seen qualitative research carried out with consumers, in order to understand their satisfaction and to help inform how assets might be operated to have greater resonance with the local community. This work is underpinned by quantitative research.

There is engagement with tenants across asset classes in relation to energy consumption and waste generation, with a focus on minimising energy consumption and waste to landfill.


PR 13. Proportion of green leases or MOUs referencing ESG issues (Private)


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