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AEGON Asset 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.

          All asset management activities (Refubishment / Upgrades / Remodelling) of the Property are now undertaken on the basis of fully incorporating the requirements of SKA / BREEAM Refurbishment.
        

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

ESG issues are initially considered in the context of the Sustainability Risk Assessment which supports the Due Diligence process undertaken when considering an acquisition. As the Property transitions from acquisition to operations the property is fully assessed and a detailed Sustainability Strategy is developed incorporating all of the improvement methodologies as detailed by;

ISO 14001, BREEAM in Use, Energy Audit (ESOS Standard), Energy Performance Improvement (LED Lighting), Tenant Utility Data Capture / Memorandums of Understanding / Provision of Tenant Fit Out ESG Guidelines, EPC Risk / Opportunity Review, Application of the Fitwell Standard.

This structured approach provides a suite of Energy Efficiency activities which are ranked and rated as to Property Impact, Tenant benefit and financial payback.

In regard to Social Issues the Aegon Asset Management Property Community Engagement strategy is premised on the principle that "the Social Imperative is founded upon the Business Imperative" in that the strategy requires to demonstrate clear business benefits and outcomes, which then support the commitment of resource and engagement with the respective Tenants and wider Community. The adoption of this principle requires that consideration is then given to a wider ranging set of issues to ensure that the strategy is informed, effective and relevant in relation to the Tenants and Properties being managed and the communities in which the business operates and works.

The formulation of the strategy requires to consider and address the following criteria;

Compliant with Aegon Asset Management Policies and Objectives

Aligned with Business Investment Philosophy

Supportive of the Kames Property Sustainability Agenda

Recognises resourcing constraints and boundaries

Reflective of a national organisation operating at local level across the UK

Aegon Asset Management Property as an Investor Member of GRESB (Global Real Estate Sustainability Benchmark), with three Green Star Rated Funds, undertakes an annual submission which describes how all of the aspects of sustainability are integrated into Kames Property operational activities, the specific aspects of Tenant and Community Engagement feature very strongly in how GRESB assess the sustainability credentials of the Organisation and its Funds.

The GRESB methodology has a focus on the Real Estate related aspects of Environment, Social and Governance (ESG), which will align to and complement the Kames Capital and AEGON Corporate Social Responsibility (CSR) vision and objectives.

From a CSR perspective this process enables;

The identification of locally based initiatives currently undertaken by the Tenants resident within Kames Properties and the setting to work a dialogue with these Tenants regarding those initiatives and the identification of areas where Kames may be able to support and assist.

The capture and bringing together of all this information will on a national basis provide the raw material of local requirement and need, which when assessed and prioritised provides the basis for a targeted community engagement strategy which is locally relevant and addresses the requirements of all stakeholders encompassing - Investors / Staff / Tenants / Community / Supply Chain / Suppliers.

This approach also supports;

Enriched Tenant engagement which has been enhanced by the Tenant Survey documentation and feedback, promoting an informed dialogue and a mutually beneficial relationship which goes beyond the standard transactional Landlord / Tenant relationship.

A better understanding of the Tenants business, drivers and ambition.

Development of a common understanding regarding sustainability and the identification of areas of potential shared benefit in respect to the Regeneration of existing assets, Energy Consumption and Carbon Reduction - this built upon the mutual agreement of a Green Lease and / or the development of a Memorandum of Understanding which can incorporate the exchange of Utility Data, Waste Flow and GHG figures.

In respect to Governance the key driver is the absolute requirement to have deployed robust and transparent processes and procedures to ensure adhere to all of the relevant Property legislation and statutes. This is actioned by the Managing Agent / Property Manager undertaking a structured review and audit of all Building Systems, Documentation and Instructions / Guidance for Staff / Tenants / Subcontractors – this review is informed by all of the requirements of the relevant legislation and is documented and retained for inspection and audit on a monthly basis and independently reviewed quarterly.


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