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APG Asset 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.

At the outset of any new investment, APG ensures that ESG policies and performance are assessed and reviewed. All new unlisted investments are asked to fill out the annual GRESB survey and the responses are considered in detail by the Responsible Investment & Governance specialist. These results are then summarised in the mandatory and independent GRIG (Global Responsible Investment & Governance team) signoffs presented to the global Committee for Investment Proposals (CIP) prior to investment. If a manager has not participated yet, they will be required to complete a questionnaire based on GRESB as part of the Due Diligence process. In certain cases, depending on the market, nature of investment and intended level of ownership, the RI&G specialist may engage directly with management of the investment, visit sites, and incorporate views from those interaction in the signoffs. In addition to the GRESB score we have increased our focus on asset level data / performance by requiring green building certifications (e.g. BREEAM in Use) for some investments.

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

          Is part of the due diligence
        

Environmental example 2, description

          Is part of the due diligence
        

Environmental example 3, description

          Is part of the due diligence and measured and monitored via GRESB
        

Social example 1, description [OPTIONAL]

          Safety performance is an item for concern during construction. Also the GRESB assessment includes a separate Health and Wellbeing module. When requiring a green building certification scheme like BREEAM New Construction or BREEAM in-Use multiple issues including health & wellbeing are addressed. For residential investment we would require a responsible servicing policy to prevent forced evictions.
        

Social example 2, description [OPTIONAL]

          Occupier satisfaction is an important indicator of the long term success of property manager, we expect property managers to continuously assess the occupier satisfaction and aim to improve it. Part of GRESB questionnaire.
        

Social example 3, description [OPTIONAL]

          The ability of the manager to manage country specific risks in countries where ESG risks are perceived to be high or increasing. In non-OECD countries reference is made to the IFC performance standards
        

Governance example 1, description

          Board independence, composition and effectiveness.
        

Governance example 2, description

          Manager should demonstrate a strong commitment, processes and track record concerning the management of ESG. In addition, ensuring sufficient control for APG matching with our holding in the investment.
        

Governance example 3, description

          
        

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.

          GRESB
        

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

At the outset of any new investment, APG ensures that ESG policies and performance are assessed and reviewed. All new unlisted investments are asked to fill out the annual GRESB survey and the responses are considered in detail by the Responsible Investment & Governance specialist. These results are then summarised in the mandatory and independent GRIG (Global Responsible Investment & Governance team) signoffs presented to the global Committee for Investment Proposals (CIP) prior to investment. If a manager has not participated yet, they will be required to complete a questionnaire based on GRESB as part of the Due Diligence process. In certain cases, depending on the market, nature of investment and intended level of ownership, the RI&G specialist may engage directly with management of the investment, visit sites, and incorporate views from those interaction in the signoffs. For listed RE investment in the SRE Pool effectively a largely similar process applies, requiring GRIG DD but typically no formal signoff as mostly not subject to CIP approval (only investments in an entity above €/$1 billion equity exposure or those made resulting in exposure larger than 10% of outstanding shares are required to be presented to the CIP for approval. All other LRE investment proposals will be approved in the Global Real Estate IC by the BBM and GREIS).

TRE Pool investments (listed by definition) are subject to the APG Inclusion Policy.


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.

Participation of the investment in the annual GRESB-survey for the full holding period of our investment is mandatory and is included in the legal documentation. To the extent that the investment does not achieve an above average GRESB score, the manager agrees to work in good faith with APG to identify and to implement agreed upon strategies designed to improve the future performance within the GRESB benchmark and achieve an above average score and in some cases a 4 or 5 star rating within a period of [3] years.


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