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Bridges Fund Management

PRI reporting framework 2020

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Outputs and outcomes

PR 15. ESG issues affected financial/ESG performance

15.1. Indicate whether your organisation measures how your approach to responsible investment in property investments has affected financial and/or ESG performance.

15.2a. Describe the impact on the following.

Describe the impact on:
Impact
Funds` financial performance

15.2b. Describe the impact on the following.

Describe the impact on:
Impact
Funds` ESG performance

15.3. Describe how you are able to determine these outcomes.

Bridges' impact-driven approach enables us to identify investment opportunities where a transaction's potential to create value for society or the environment also drives financial value. Our 'top down' approach to identifying sectors and locations helps us focus our efforts on specific niche sectors, often before they are recognised by the wider market.

For example, Bridges has identified healthcare as an attractive property investment sector, owing to its 'needs-driven' characteristics created by an aging population and a lack of public sector funding to provide modern facilities for the elderly and those with specialist care needs. This shortfall in supply and quality of accommodation was matched by demand from private sector operators who were seeking new, purpose-built facilities primarily for private-pay residents. Bridges has built 14 care homes with our specialist partners, all let to the national care home operators on 30+ year leases with annual RPI increases. In addition, Birchgrove, a new model of assisted living accommodation and care for rent for the growing elderly population has opened its first site in Sidcup. 

Loneliness and isolation are thought to increase the likelihood of mortality by over 25% in older people. By providing purpose-built assisted living units for rent in attractive developments, we believe we can help to address this challenge, while also alleviating some of the pressures on the NHS and the care home sector. The assisted living market in the UK is still undersupplied with a limited choice of accommodation and tenure types. By creating the Birchgrove model, Bridges hopes not only to provide these much-needed facilities but to play a catalytic role in proving the model and helping to develop the wider sector, thereby increasing provision. The developments will also include a range of environmentally-friendly construction initiatives where viable. They will also look to enhance the health & well-being of occupants through good design.

We track social, environmental and financial returns for each individual investment in order to manage performance towards our desired outcomes. The social and environmental outcomes sought will be specific to each investment but fall within one or more of our four impact themes (stronger communities, healthier lives, future skills, sustainable planet). Moreover, and in accordance with the Impact Management Project consensus investments that are made within ESG lens can be divided into three categories: 

  • Those who try to avoid harm to people and the planet (A - Avoid)
  • Those who try to avoid harm and benefit all stakeholders (B - Benefit all Stakeholders)
  • Those who in addition to the above try to deliver specific positive outcomes for underserved people or the planet (C - Contribute to Solutions)

Our funds strive to invest in category (B) and (C) only. In order to make sure that at least category B is reached, we follow specific procedures and/or test carried out internally.

 


PR 16. Examples of ESG issues that affected your property investments

16.1. Provide examples of ESG issues that affected your property investments during the reporting year.

ESG issue
          Energy Efficiency
        
Types of properties affected
          Existing properties (example of actions below) but also new properties
        
Impact (or potential impact) on investment

Decrease lighting energy by 60% over the baseline. Incorporate energy efficient lighting LED over standard T8 fluorescent and introduce appropriate lighting controls.

Activities undertaken to influence the investment and the outcomes

Taking project management seriously and engage with energy assessors and appropriate lighting contractors. Measuring the outcomes of the intervention. 

ESG issue
          Ground conditions
        
Types of properties affected
          Usually Industrial sites
        
Impact (or potential impact) on investment

Land remediation, converting derelict land that have not been used for many years into usable land

Activities undertaken to influence the investment and the outcomes

Due diligence (environmental reports), consultation with experts, samples, nearby developments, etc.

ESG issue
          Revitalising underserved UK areas
        
Types of properties affected
          Over 80%
        
Impact (or potential impact) on investment

Focusing investment in more deprived areas of the UK, renovating dated and derelict buildings into sustainable buildings 

Activities undertaken to influence the investment and the outcomes

Area analysis, costs / benefit analysis, due diligence, market assessment, needs assessments, comparables, etc

ESG issue
          Health, safety and wellbeing
        
Types of properties affected
          All
        
Impact (or potential impact) on investment

Ensuring higher Health, safety and wellbeing standards in all existing and new developments

Activities undertaken to influence the investment and the outcomes

 Selecting right supply chain, monitoring, track record, accreditation, procedures, etc.

ESG issue
          Procurement of green energy
        
Types of properties affected
          Existing properties
        
Impact (or potential impact) on investment

Reduce the environmental footprint of our property investments

Activities undertaken to influence the investment and the outcomes

Due diligence, consulting appropriate energy experts, costs/ benefit analysis

16.2. Additional information. [Optional]


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