Investing in tomorrow's world: Real estate sustainability report

Our sustainability approach and review of our 2020-2021 achievements

We integrate ESG throughout our real estate investment management process to help preserve and create value for our clients in tomorrow’s world. In this annual report, we explain our approach for managing the financial risks and opportunities associated with climate change and being a responsible property investor, whilst also highlighting our key awards and achievements over the past year.

2020-2021 awards and achievements

• Achieved 16 Green Stars in the Global Real Estate Sustainability Benchmark
• Earned 14th consecutive EPA ENERGY STAR 'Partner of the Year Sustained Excellence' award
• Earned an A+ rating in latest Principles for Responsible Investment sustainability benchmark results
• Won 'Sustainability' award at the 2020 EG Tech Awards
• Named a 'Goal Achiever' by the U.S. Department of Energy

Managing the financial risks and opportunities associated with climate change and being a responsible investor

We recognise that the physical impacts of climate change will affect real estate values and that it is critical to develop an understanding of how, where and when these physical impacts will become financially material to an individual investment’s financial performance. In the report, we explain the following risks and our process for identifying, evaluating and protecting our real estate portfolio from them:

• Coastal flooding
• Temperature extremes
• Hurricanes and typhoons
• Severe storms
• Wildfire
• Drought

We are also conscious that the transition to the low carbon economy presents both financial opportunities and risks, which are explained in the report. Effectively managing building efficiency and carbon intensity throughout this transition is a key factor in creating and protecting value in the assets we manage. Whilst our sustainability strategy encompasses a broad range of ESG issues, we believe the physical impacts of climate change and the transition to the low carbon economy will have the most significant impact on real estate asset values and are therefore the most material for our clients.

Investing in innovation to achieve better buildings

To achieve our ambitious sustainability goals, we must invest in the latest technology and be innovative in our approach. This is a core part of how we do business, and we are particularly proud of our role in supporting and promoting the innovations that champion health and wellbeing in buildings and use smart building technology to achieve energy efficiency.

Case study: cube, Berlin, Germany

This 17,500 sq m (188,000 sq ft) development project is an iconic prime office asset located in Berlin which was completed in June 2020. Designed to a high-quality, sustainable fit-out spec, the building has already achieved WiredScore ‘Platinum’ certification, one of the first assets in Germany to attain this, and is also expected to achieve a DGNB ‘Gold’ rating. The asset is a fully digitalised ‘Smart Building’, which includes intelligent heating, cooling and lighting systems, as well as offering a tenant app that can be used to create room bookings and for internal communications.

Priorities in 2021 and beyond

• Formalise our climate risk investment framework, including guidance on levels of risk that preclude investment.
• Roll out the priority sustainability technologies that we have identified in each asset class.
• Focus on tenant engagement and tenant data gathering – significantly increase the proportion of energy consumption data that we gather from tenants.
• Undertake assessments of the social value of major new developments and undertake a review of vulnerability to modern slavery and wage levels compared to living wage across our supply chain.
• Further develop our training programme to deliver more bespoke and advanced sustainability training across our business.
• Develop a route map to fully comply with the Task Force on Climate-Related Financial Disclosure Framework.

We hope you enjoy reading about our real estate sustainability efforts and gain an insight into our responsible property investment process and priorities.