Responsible property investment is about more than just reducing the carbon footprint. It’s about understanding and managing external risks that may jeopardize our investments. And it’s about identifying opportunities that will protect and enhance value in the face of changing environments.
Carbon footprint
/'kär-bən 'fu̇t-print/ noun
The Nuveen Real Estate business recently installed solar panels on Dalton Park, an outlet shopping and leisure center in the northeast UK. Aiming to future-proof the center against energy price rises and supply shortages, the property generates over 100,000 kWh of electricity each year, saving 93 tons of CO2 annually1, reducing energy service costs, and pursuing a stable income stream for investors.
One hundred percent of the renewable energy generated is used on site. It boosts investment returns because the cost savings on reduced consumption of national-grid electricity is greater than revenue generated by exporting the same amount of electricity to the grid.
Glossary: A-D
Best in class
Selecting issuers that demonstrate better ESG characteristics within a particular sector, industry or peer group, and achieve a rating above a defined threshold.
Board quality
Boards play a critical role in crisis management, oversight, and risk management — setting the tone at the top before incidents occur. From an investment standpoint, issues such as director independence, board composition, experience, perspectives and tenure are important because they protect shareholder value. Board composition, executive compensation, business ethics and accounting practices all reflect a board’s judgment and priorities.
Carbon footprint
The sum of greenhouse gas (GHG) emissions — primarily carbon dioxide and other GHGs — for a given company or group of companies comprising a portfolio. For a public equities portfolio, these emissions then are typically pro-rated in proportion to the number of shares held by each company.
Climate change
A change in global or regional climate patterns, in particular a change apparent from the mid- to late-20th century onward — especially warming — attributed largely to the increased levels of atmospheric carbon dioxide produced by the use of fossil fuels.
Controversial business involvement
Refers to a security issuer’s activity in an industry that can cause significant social harm. Industries include tobacco, alcohol and firearms, among others.
Corporate social responsibility (CSR)
A company’s efforts to evaluate the effect of its operations, processes and philanthropy on the broader community and to set policies and practices that maximize the positive impact of its activities on the company’s key stakeholders.
Divestment
The sale or disposition of securities or other assets based on corporate behavior that is not aligned with specific environmental, social and governance objectives, values or convictions. See responsible investing – other RI approaches .
