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ESG Policy
Sustainable Investing: Real Estate with Impact
Sustainability and responsible investment are integral to Schroder Real Estate Investment Management’s investment process. We believe that by understanding, managing and measuring the impact of Environmental, Social and Governance (‘ESG’) considerations, we will deliver enhanced long term returns for shareholders as well as deliver a positive impact to the environment and the communities where SREIT is investing.
In November 2020, SREIT issued a Sustainability Guide which sets out how sustainability considerations, risks and opportunities are integrated within the investment process (please see link below to this guide). This was followed in December 2020 by Schroders publishing its own Pathway to Net Zero Carbon by 2050.
Good progress has been made during the financial year with SREIT achieving a three star rating in the GRESB sustainability survey, which placed it top in its GRESB peer group of UK Diversified Listed Companies. SREIT also achieved a GRESB Public Disclosure A Rating and the EPRA Best Practice Sustainability Reporting Gold Award for the third consecutive year.
The Board and Investment Manager have agreed updated sustainability objectives for SREIT during the current financial year, which are set out in the table below. These are summarised below together with the strategy for delivering the objectives and details of how performance will be monitored.
| Objective | Management Strategy | Initial Reporting Metrics |
| Governance and Oversight |
The Manager’s process includes oversight on sustainability by its Investment Committee and Group Investment Risk Committee. The Board reviews the objectives and progress of the sustainability programme at least annually. This includes maintaining good health & safety and managing compliance with regulations. |
- Manager’s Investment Risk Report - Annual Report - Number of assets where health & safety impacts assessed/reviewed/improved - Number of incidents of non-compliance with regulations and/or voluntary codes identified - Compliance assurance from Property Managers at building level |
| Net Zero Carbon (‘NZC’) |
Determine portfolio alignment with NZC and Paris Agreement to limit climate change to 1.5C. Asset analysis to determine energy/carbon targets and offsetting. Determine new energy and carbon targets to 2022, 2025 and 2030 through Impact and Sustainability Action Plans (ISAPs) for buildings to assess understanding of improvement and opportunities and Net Zero analysis to enable target setting. Improve collaboration with occupiers to support whole building performance. Assess ‘whole life carbon’ on major projects. Use Schroders Refurbishment and Development brief on projects to set and manage ambitions. Use NABERS UK Design for Performance to support improved operational in-use outcomes. Procure 100% landlord-controlled electricity on certified green tariffs by 2022 (December 2020 at 97%). Assess potential for onsite renewable energy generation. Purchase independently verified offsets that align with best practice industry guidance. Reduce the use of offsets to zero over appropriate time frame. |
- % of assets under management Paris Aligned - Energy and carbon targets set for assets and portfolio - Investment in energy efficiency initiatives - Energy intensity (kWh/m2/yr) - Carbon intensity (CO2e/m2/yr) - % of occupied occupier space with green lease clauses (by floor area) - % of occupied occupier space with data - kgCO2e/m2/year modelled during design - kWh/m2/year modelled during design - kgCO2e/m2/year achieved during early operation - kWh/m2/year achieved during early operation - % kWh landlord-procured electricity from green tariff - kWh onsite renewable energy generated - tCO2e offset - £ or €/tCO2e unit cost per offset |
| Third Party Verification |
GRESB – Continue to target opportunities to improve the GRESB score year on year. Data Assurance – Continue to obtain third party assurance of sustainability data in line with the independent assurance process. Asset Certification – Obtain third party certification to validate Net Zero Carbon or related energy/carbon efficiency claims or health and wellbeing. EPRA Reporting – Maintain EPRA Gold Sustainability Best Practice Reporting Award. SDG alignment - Integrate into annual reporting for 2022 by mapping social and environmental contributions to the Schroder Real Estate Investment Management Limited (‘SREIM’) Pillars of Impact and UN SDGs and set targets for improvement. |
- GRESB star rating and % score achieved - % data assured - % portfolio certified through third party scheme - EPRA Gold Award - Annual report SDG aligned |
| Climate Risk and TCFD | Determine a climate risk profile, adaptation strategy and reporting in line with TCFD through asset and portfolio scenario analysis. | - Portfolio climate risk profile |
| Operational excellence |
Set standards for operational excellence for managed assets incorporating the hospitality mindset in our strategy at each asset. Improve BREEAM In-Use (‘BIU’) certification across the portfolio to support improvement across nine aspects: Management, Health and Wellbeing, Energy, Transport, Water Resources, Resilience, Land Use and Ecology and Pollution. Improve the EPC profile of the portfolio through asset management including refurbishment. Potential to adopt NABERS Energy for Offices which rates base building actual energy efficiency. Assess the approach to monitor indoor environment quality (IEQ) and set new standard. Promote and facilitate our occupiers’ use of bicycles, buses and electric vehicles as transport methods to our assets. Minimise water demand in line with best practice industry benchmarks. Provide dedicated space for waste/recycling segregation and storage. Integrate biophilic design into assets. |
- Net Promoter Score - Occupier satisfaction surveys - % assets with BIU certification - % assets with Good/Very Good/Excellent ratings - % assets with EPCs - % assets with A to E ratings - % assets where IEQ assessed - % assets with good bicycle provisions (storage, repair stations, electric charging) - % assets with electric vehicle charging - % assets with green travel plan - Water consumed by assets managed by the Company m3 per year - Tonnes waste produced per year - % waste recycled per year - % of schemes with waste management plans - % of schemes with waste storage and separation site - % of schemes with green space available to occupiers, on site and in close proximity - % of schemes with green space available to occupiers, on site and in close proximity |
