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Bridges Fund Management

PRI reporting framework 2020

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Pre-investment (selection)

PR 04. Incorporating ESG issues when selecting investments

04.1. Indicate if your organisation typically incorporates ESG issues when selecting property investments.

04.2. Provide a description of your organisation`s approach to incorporating ESG issues in property investment selection.

Bridges Fund Management has an impact-driven investment approach that allows the team to integrate societal and environmental factors into their decision-making in a way that we believe further strengthens returns. We specialise in using sustainability and impact lens to identify investment opportunities, where an investment's potential to create value for society or the environment 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.

Through our impact-driven investment approach, we have learned to focus on four key criteria, common to all Bridges' investments: target outcomes, additionality, alignment and environmental, social and governance factors (ESG). These four key criteria provide a holistic view of an investment's ability to generate positive societal or environmental change and help us to analyse impact when selecting, engaging and tracking our portfolio.

Our Sustainable Property Policy details the minimum standards we expect in our development projects and our in-house risk assessment screen specially developed for property investments cover all stages of our pre-investment decision-making process (initial screening, due diligence, investment decision). A summary is included in the Investment Committee meeting for approval. ESG factors are analysed and discussed in further detail before exchange/completion. 

04.3. Indicate which E, S and/or G issues are typically considered by your organisation in the property investment selection process, and list up to three examples per issue.

Environmental example 1, description

          When we buy an existing property, we usually undertake an energy audit and/or looking into the Energy Performance Certificate to evaluate the improvements that we are targeting, the cost of the investment required in energy efficiency and the benefits in terms of operational costs and carbon dioxide emissions. We have also undertaken ESOS energy audits where required and implemented measures where feasible. Moreover, we measure energy consumption and CO2 emissions in our property investments.

Environmental example 2, description

          We carry out climate change adaptation strategies and appraisal for structural and fabric resilience usually by the end of RIBA Stage 2 and risk assessments to identify and evaluate the impacts on the building of extreme weather and climate change on our new developments

Environmental example 3, description

          We assess the flood risk of each one of our sites and consider the potential impact of climate change. We look carefully at flooding, ground conditions and contamination potential on every site we buy, however also consider the positive societal benefits of bringing derelict sites into use for the local community.

Social example 1, description [OPTIONAL]

          Under our Stronger Communities theme, we focus on positive regeneration and investing in the most underserved areas of the country as described by the Government Index of Multiple Deprivation

Social example 2, description [OPTIONAL]

          For each investment, we target and measure multiple socio-economic outcomes including the Gross Value Added (GVA), etc.

Social example 3, description [OPTIONAL]

          For each investment in residential properties we set an affordable dwellings target

Governance example 1, description

          We carry out appropriate checks and training to minimise anti-bribery and corruption risks

Governance example 2, description

          We carry out appropriate checks and employ consultants and advisors to conduct appropriate regulatory checks

Governance example 3, description

          Bridges' investment committee (comprising senior officials) reviews impact (including ESG) and returns for each potential investment

04.4. Additional information. [Optional]

PR 05. Types of ESG information considered in investment selection

05.1. Indicate what type of ESG information your organisation typically considers during your property investment selection process.

05.2. Provide a brief description of how this ESG information was incorporated into your investment selection process.

Bridges’ ESG due diligence incorporated at investment selection process is extensive and comprehensive. This is the first step to our 'SET' process, 'Select', 'Engage', 'Track'. We evaluate the existing data available from the target property and carry out the relevant appraisals / audits (existing site and area market assessment, socio economic assessment, building condition survey, environmental assessments, health and safety compliance, asbestos, fire, transport assessment, energy assessment / Energy Performance Certificates (EPCs), sustainability assessment, etc.). We benchmark data against similar properties and publicly available / national benchmarks. We align data with established property reporting standards and international standards, gather data and participate in engagement events with stakeholders, and consider the information of external advisers. We also carry out climate change risk assessments in our developments.

PR 06. ESG issues impact in selection process

06.1. Indicate if ESG issues impacted your property investment selection process during the reporting year.

06.2. Indicate how ESG issues impacted your property investment deal structuring processes during the reporting year.

06.3. Additional information.