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The international business of Federated Hermes (formerly Hermes Investment Management)

PRI reporting framework 2020

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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.

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

Over the years, focus on RPI has demanded fresh thinking and new ways of working. Federated Hermes has thus created a range of dedicated tools and procedures that cover all aspects of our operations.

Our responsible asset and property management programme integrates the following RPI procedures and tools:

  • Minimum sustainability requirements for refurbishments and developments, including: Construction contractors comply with sustainability guidelines; Environmental site selection requirements; Environmental site development requirements; Resilient building design and orientation; Minimum requirements on pollution, sustainable materials, waste, energy, water, biodiversity.
  • Dedicated responsible property management guidelines for Federated Hermes’  directly managed assets, covering the following ESG matters: water efficiency requirements; energy efficiency requirements; energy generation from on-site renewable sources; waste management plans at sites, occupier’s health and well-being requirements.
  • Strategic and operational sustainability benchmarking of Federated Hermes Real Estate's funds
  • Active data management systems for utilities and waste
  • Ongoing monitoring of performance with continuous feedback between property managers, asset managers and sustainability experts
  • Stringent risk and safety requirements and supporting tools
  • Community and occupiers engagement tool and programmes

Federated Hermes has been monitoring its sustainability performance for its directly managed assets since 2006. We have annual targets which are monitored and reported against in our public responsibility report.

Over the years there have been relevant questions about the limitations of current approaches in delivering measurable outcomes beyond performance to investors, the economy and society.

Our “Impactful Intent” approach aims to deepen our Responsible Property Investment practice, by intentionally seeking a defined positive environmental or social outcome in a particular place or market as a core focus of our responsible investment strategy, in addition to strong risk-adjusted financial returns.

This involves using a purposeful framework to focus our real-estate operations on three specific impactful investment themes. For each of these investment themes we are committing to activities with measurable environmental, economic and societal outcomes, which ultimately support specific targets of the UN sustainable development goals (SDGs). Out impactful investment themes are:

  • Meaningful place-making that creates civic pride
  • Healthy, engaged and productive communities that drive desirable social and environmental outcomes
  • Climate and resource efficiency. Achieving a just transition to a low-carbon, circular economy in order to help prevent further adverse climate change and resource scarcity

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