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CBRE Investment Management

PRI reporting framework 2020

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Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Infrastructure

As a component of the due diligence process, CBRE Caledon (“Caledon”) thoroughly assesses ESG issues relating to the investment under consideration. Caledon’s ESG committee monitors investment performance through Caledon’s comprehensive quarterly review process. Although ESG research is not explicitly quantified in Caledon’s analysis, quarterly reports capture any material ESG developments that pertain to a particular investment. When relevant, this includes an overview of the influence of ESG factors on investment performance.

16.2. Additional information [Optional].

The Firm is incorporating ESG issues into the investment processes for our credit funds.


SG 17. ESG issues for externally managed assets not reported in framework

17.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Listed equities - ESG incorporation

CBRE Clarion believes that ESG issues are relevant and can be material in evaluating management teams of listed property companies. More specifically, we believe that management teams which articulate, enact and measure ESG issues are generally more likely to make superior business decisions. CBRE Clarion employs a large team of securities analysts responsible for fundamental analysis of the companies in which we invest client assets. Our analysts evaluate ESG issues as part of their research process, which includes: asset tours, management and director engagement, financial modeling and analysis of public documents. ESG issues are incorporated into our assessment of a company’s exposure to and ability to manage risk.  While some factors are similar, the real estate and infrastructure sectors have unique sets of fundamental and ESG factors, given different drivers and regulatory environments.  For both real estate and infrastructure, the aggregated ESG data, comprised of internal and external data, is incorporated into the “Quality” factor of the respective factor-based investment tools. CBRE Clarion subscribes to Sustainalytics and to GRESB, which the analysts have access to, as well as any public information provided by the company. 

Listed equities - engagement

CBRE Clarion prioritizes our individual engagement efforts by the significance of the company within the real estate sector and, by extension, our clients' portfolios.  Overall, our engagement efforts are established to complete the following objectives: 1.) In the area of proxy voting, to discuss items that come up for vote, many times in the area of governance or if there are environmental or social items; 2.) to fill in gaps where our external data sources may have conflicting information or incomplete information; 3.) to understand overall ESG strategy for companies in sectors where there is minimal disclosure, such as companies who own net lease or storage assets, for example; 4.) to influence companies with historically poor governance.  While we have not had situations where companies are in breach of international norms, we would engage with companies if that situation occurred.  In our collaborative engagement, we target large companies first who do not complete the GRESB assessment or do not have ESG related information in their public documents.  We encourage firms to participate in GRESB since GRESB specifically serves the real asset industry, whereas other data sources cover multiple industries.  CBREClarion was named 2019 GRESB Investor of the Year, North America.

Listed equities - (proxy) voting

CBRE Clarion maintains internal proxy guidelines, and the Head of ESG, senior portfolio managers and CEO review and update them annually.   The voting process is carried out by the individual analyst for that analyst's coverage universe, with oversight from the Head of ESG. An associate from our operations team with responsibility for proxy administration provides the analysts with the third party research reports, as well as an summary of the CBRE Clarion guidelines pertaining to the particular items up for vote.  The CBRE Clarion analyst reads through the research as well as the public proxy filing, and votes the items.  The CBRE Clarion analyst communicates the vote to the operations associate, and the Head of ESG and senior portfolio managers are copied on all communication. The CBRE Clarion analyst who is voting, plus a designated senior member of the investment team both must sign off on any votes that go against CBRE Clarion's internal guidelines.  It is a formal document with the name of the company, the ballot item, the vote, and the reason for going against CBRE Clarion guidelines.  The document is maintained by our compliance department.

Private equity

The ESG processes and procedures applied by a fund manager and deal partners is one of the factors that CBRE Caledon ("Caledon") considers when assessing a potential investment. In particular, the Caledon Investment Committee actively ensures that the fund manager or operating partner has the policies, systems and expertise needed to integrate environmental considerations into their investment decisions and ownership activities; that they will not engage in socially irresponsible activities; that their governance provisions meet best practice standards; and that reporting will meet Caledon’s requirements for transparency.

Infrastructure

The ESG processes and procedures applied by a fund manager and deal partners is one of the factors that CBRE Caledon ("Caledon") considers when assessing a potential investment. In particular, the Caledon Investment Committee actively ensures that the fund manager or operating partner has the policies, systems and expertise needed to integrate environmental considerations into their investment decisions and ownership activities; that they will not engage in socially irresponsible activities; that their governance provisions meet best practice standards; and that reporting will meet Caledon’s requirements for transparency.

17.2. Additional information.


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