Bridges’ ESG approach comprises of three key stages. First, by adopting a ‘negative screen’, we engage with our JV partners to screen out any investments whose operations could have a negative impact on any stakeholders.
Building on our existing Impact Radar methodology, we assess the positive or negative effects our investments have on people and/or the planet scoring across five dimensions of impact:
- What – What outcomes do business activity drive? How important are these to the people (and planet) experiencing them?
- Who – Who experiences the outcome? How underserved are the stakeholders in relation to the outcome?
- How Much – How much of the outcome occurs in terms of scale, depth and duration?
- Contribution – What is the businesses’ / Bridges contribution to what would likely happen anyway?
- Risk – Which risk factors are material and how likely is the outcome different from the expectation.
These five dimensions provide a holistic view of an investment’s type and ability to generate impact, and help us analyse when selecting, engaging and tracking our portfolio. This analysis is mapped out using a simple scoring approach.
Bridges uses the above approach to identify investment opportunities, where an investment’s potential to create value for society also drives financial value, such as meeting demand for specialist properties, unlocking the potential of emerging locations and improving the energy footprints of buildings to increase their attraction to occupiers and to future-proof value for investors.
Second, we ensure that, at a minimum, our potential JV partners and asset manager partners in property investments have the required processes, systems and governance in place to manage potential ESG risks. This requires our investment teams to work closely with prospective partners and teams to scrutinise any risk that could potentially have a material impact on stakeholders – and to identify which required ESG processes and practices need to be in place. Any issues identified are then captured in an ESG materiality analysis (the Bridges Property / ESG Risk Register) which details priority issues and any action points that arise.
Third, the Bridges and the JV partner teams, seek to create positive externalities for material stakeholders by identifying and implementing ‘win-win’ ESG opportunities that will add value to the investment in a cost-effective way. Our goal is to make the discussion around ESG as practical as possible, by making it a conversation about operational excellence and industry leadership. The most effective way of doing this is to engage with our portfolio advisers, managers and joint venture partners to manage ESG risks, as well as identify opportunities to create additional value—opportunities we call “win-wins” because, as outlined above, they improve social or environmental performance in ways that also improve commercial returns.
Throughout the investment period, we monitor and track the impact that our investments have produced such as revitalisation of areas in need of regeneration, environmental leadership, health care and education provision and job creation.