We set our Sustainable Investment Policy annually and it's approved by the Investment Committee. The Policy comprises our commitments and targets and applies to all assets (UK and European). Our overarching objective is to ensure our sustainability programme for the investment management of funds and assets addresses landlord responsibilities and aspires to consider overall building construction, refurbishment, management and operation through developing greater collaboration with tenants.

For 2018 there were a number of qualitative objectives in addition to the more quantitative targets referred to in section 9.2:

•          Ensure the application of a consistent approach to property management by our third party property managers in line with our requirements

•          Understand the sustainability opportunities and risks for standing investments and potential acquisitions

•          Deliver developments and refurbishments to sustainable standards in line with our requirements and achieve building certifications (i.e. EPC, BREEAM, Ska, LEED, HQE) where appropriate

•          Manage compliance with environmental legislation and regulation for all portfolios.

•          Ensure waste management plans are in place for all managed assets where appropriate

The Schroder Real Estate portfolio comprises assets in the UK and Continental Europe, there are therefore a number of certification schemes which are relevant, and these may be country specific as required by EU or national legislation or in accordance with market practice.

Certification schemes may relate to an individual building for example an energy performance certificate rating or Building Research Establishment Environmental Assessment Methodology BREEAM (an environmental assessment method and rating system for buildings).

We are fund manager members of and participate for most funds in the Global Real Estate Sustainability Benchmark "GRESB" which is the global standard for assessing ESG performance of for real estate funds and companies.

We include sustainability reports within annual fund report and accounts which are aligned with INREV Sustainability Reporting Guidelines 2016 or EPRA Best Practices Recommendations on Sustainability Reporting 2017 as appropriate.

We are members of the Better Buildings Partnership and submit property data to their Real Estate Environmental Benchmarks (REEB).

Our approach for ESG within active developments and major renovations is framed by what's needed for any building to optimise energy efficiency and cost, be attractive to potential tenants and maximise long term market value/build investment resilience. This may best be captured by a building certification ambition for example a BREEAM (UK Building Research Establishment Environmental Assessment Methodology used in the UK and Europe) or LEED (Leadership in Energy and Environmental Design certificated established by the US Green Building Council and used in Europe). There may also be an energy performance certificate rating ambition.

In all cases our developments and refurbishments will comply with relevant planning and building regulations/codes, environmental permits and contractor schemes. All of these include ESG considerations. Generally for all development and major renovation schemes we seek to achieve improved performance against the existing building and often against required standards. This helps to future proof our investments in relation to energy efficiency and regulation as well as potential changes to an asset's optimal use. In 2018 we introduced Sustainability Guidance on Developments and Refurbishments to support our investment team and third party service providers.

Monitoring of ESG considerations for active projects is often undertaken by third party project managers.

There are a large number of tenants within the direct portfolio and the opportunity or need for landlord engagement on ESG issues only exists for a small number of all tenants.

It is often more pertinent for managed assets, however the landlord may only have operational control for some but not all aspects of a building's operation.

Occupier engagements will vary depending on the nature of the asset for example there may be regular tenant meetings with large office occupiers compared to annual newsletters for tenants at an industrial estate. We seek to ensure ESG matters are regularly discussed and highlighted as relevant to the management issues at the asset. For example discussions with occupiers to introduce a new food waste system at a retail and leisure scheme and to trial changes to the operational times of a building management system for a multi-tenanted office.

We have provided our answer on the basis of % of assets (not occupiers) where we have obtained data from the tenants and/or raised sustainability during tenant meetings.

Our approach is that consideration should be given to the relationship of an asset to the community in which it's located and which it supports to assess a building's contribution to the locality. This should contribute to an asset's longer term investment credentials.

However the opportunity for community engagement is dependent upon the type of asset and how it and its users relate to the local community. For example with a shopping centre there may be communications to help determine local attitudes to the centre, amenity, safety and security, access and open space as well as support opportunities for recruitment. In contrast for a fully let office building there may be more limited scope for community involvement and examples include sponsorship for a street festival and a youth centre.