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eQ Asset Management Ltd

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.

The real estate business has an important and multi-dimensional impact on society and our living.

When a property is purchased, the necessary due diligences always comprise sustainability matters. They go through matters related to soil, energy efficiency and background information about the main tenant, for instance. We also thoroughly assess sustainable forms of transport, the location of the investment target with regard to public transport and the life cycle costs.

We demand contractors in our new build projects to follow widely used industry standards that are extensive in governance standard. In the end of 2019 we defined our Supplier code of conduct as part of our sustainability guidelines. Where we acquire properties operated by the tenants, we analyse their compliance with regulations and pratices to make sure long term investment case is built on solid and sustainable foundations.

In our choices we try to find as low-carbon alternatives as possible. The investment targets of both the Finnish Real Estate Fund and Care Fund have used renewable electricity based on wind power since the beginning of 2018. In addition, we always evaluate the possibilities of using geothermal and solar energy in our own development projects. Towards the end of 2019, a school centre that we built in Lauttasaari was completed (primary school for about 600 pupils and nursery for 300 children) and delivered to the city of Helsinki. This is the first own development project in our real estate funds. The school centre is completely carbon neutral during its use. The heating and cooling energy used by the centre is produced with geothermal energy, and the object also uses solar panels. A comprehensive system monitoring the quality of the indoor air has also been installed in the school centre.

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

          Energy efficiency improvement can be an additional value driver. Also high energy efficiency and technology existing will be regarded as positive contributors. In 2019 eQ real estate funds had energy saving and CO2 saving targets. The weakest performers of the funds were assessed and on these properties technical improvements to place.
        

Environmental example 2, description

          Indoor air quality is one of the core values. If improvements are needed, they are discounted in acquisition stage as these investment will have a priority in asset development. The funds have invested indoor air quality assessment systems in several properties. A good example from the year 2019 is a school centre that we built in Lauttasaari. It was completed (primary school for about 600 pupils and nursery for 300 children) and delivered to the city of Helsinki. This is the first own development project in our real estate funds. The school centre is completely carbon neutral during its use. The heating and cooling energy used by the centre is produced with geothermal energy, and the object also uses solar panels. A comprehensive system monitoring the quality of the indoor air has also been installed in the school centre.
        

Environmental example 3, description

          In our choices we try to find as low-carbon alternatives as possible. The investment targets of both the Finnish Real Estate Fund and Care Fund have used renewable electricity based on wind power since the beginning of 2018. In addition, we always evaluate the possibilities of using geothermal and solar energy in our new real estate targets.
        

Social example 1, description [OPTIONAL]

          In 2019 we launched our sustainability guidelines in providing clear targets for all the development and renovation projects (small and large projects).
        

Social example 2, description [OPTIONAL]

          In 2019 we started to conduct our regular tenant satisfaction survey. We conduct the survey two times a year and  corrective operations are made between the surveys.
        

Social example 3, description [OPTIONAL]

          When a property is purchased, the necessary due diligences always comprise sustainability matters. They go through matters related to soil, energy efficiency and background information about the main tenant, for instance. We also thoroughly assess sustainable forms of transport, the location of the investment target with regard to public transport and the life cycle costs.  The good location of our investment targets is very important for us.
        

Governance example 1, description

          On the end of the year 2019, we launched eQ Supplier Code of Conduct as part of our Sustainability Guidelines.
        

Governance example 2, description

          We always prefer clear governance structure. We launched our Sustainability Guidelines in providing clear targets for all the development and renovation projects (small and large projects).
        

Governance example 3, description

          A thorough DD always carried to assess regulatory compliance, and in some cases this will extend to tenant analysis also.
        

04.4. Additional information. [Optional]

ESG approach has deelply integrated into our property investment selection process. Each investment team's member takes sustainability/ESG into consideration in every phase of investment process. It is important for us to communicate our ESG approach to all relevant parties of the process. 


PR 05. Types of ESG information considered in investment selection (Private)


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.

When a property is purchased, the necessary due diligences always comprise sustainability matters. They go through matters related to soil, energy efficiency and background information about the main tenant, for instance. We also thoroughly assess sustainable forms of transport, the location of the investment target with regard to public transport and the life cycle costs. In this phase we always define the current sustainability level of the investment target and based on this level we are preparing a plan for improvement. Later the sustainability level will be checked eg. through BREEAM In use certification.


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