ESG

Green finance refers to investments specifically designed to promote the energy transition and combat global warming.

It favours responsible investment that takes account of environmental, social and governance (ESG) criteria.

The main green finance tool is still green bonds, which are issued to finance projects that help combat global warming and promote the energy transition. Investors can also invest in green funds, which select companies on the basis of environmental criteria.

ESG (Environmental, Social and Governance) criteria are a set of measures used to assess a company’s performance on environmental, social and corporate governance issues. These criteria are used by investors and stakeholders to assess a company’s sustainability and responsibility.

Environmental Criteria (E):
The environmental criteria focus on a company’s environmental sustainability practices. This may include measures of the company’s carbon footprint, energy consumption, waste management, biodiversity conservation policy, sustainable use of natural resources, reduction of greenhouse gas emissions, etc.

Social criteria (S):
The social criteria focuses on a company’s social responsibility practices towards its employees, suppliers, customers and the communities in which it operates. This may include measures of diversity and inclusion within the company, occupational health and safety practices, business ethics, working conditions, human rights, positive social impact, etc.

Governance criteria (G):
Governance criteria relate to corporate governance practices, including governance structure, transparency, independence of directors, executive remuneration, anti-corruption practices, internal control systems, executive responsibility and ethics, etc. These criteria aim to assess how a company is managed and whether it implements ethical and responsible practices.

ESG (environmental, social and governance) criteria have become increasingly important in the real estate asset management sector. These criteria are used to assess the environmental, social and governance performance and impact of companies and property investments. Here are some ESG criteria commonly used to evaluate real estate asset management companies:

Environment:

• Energy efficiency: Property asset management companies are assessed on the energy performance of their buildings and their initiatives to reduce energy consumption.
• Waste management: The adoption of effective waste management practices, such as recycling and waste reduction, is an important criterion.
• Climate impact: Management companies are assessed on how they address climate change issues, including measures to reduce greenhouse gas emissions.

Social:

• Health and safety: Occupational health and safety policies and practices are assessed to ensure the protection of workers and building occupants.
• Community Impact: Management companies are assessed on how they contribute to the well-being of local communities, including supporting social initiatives and promoting diversity and inclusion.
• Stakeholder management: Management companies’ commitment to their stakeholders, including tenants and investors, is taken into account when assessing their social performance.

Governance:

• Governance structure: Corporate governance practices, such as transparency, accountability and independence of directors, are assessed.
• Business ethics: Management companies are assessed on their commitment to business ethics, including the prevention of corruption and the promotion of integrity.
• Disclosure policies and practices: The quality of information provided by management companies on their ESG performance and impacts is taken into account.

It should be noted that these criteria may vary according to the specific standards and requirements of each jurisdiction or rating organisation. Investors and stakeholders can use these ESG criteria to assess the overall performance of a real estate asset management company in terms of its environmental, social and governance impacts.

As a property asset management company, it is essential to report on ESG (Environmental, Social and Governance) criteria to demonstrate your commitment to sustainability and social responsibility. Here are some key elements to consider when preparing your ESG report:

Environment:

• Environmental impact: Assess and report on measures taken to reduce the carbon footprint of your property assets, such as energy efficiency, use of renewable energy sources and waste management.
• Green certification: Mention any environmental certification or labels you have obtained for your buildings, such as LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method).
  Climate risks: Assess the risks associated with climate change, such as flooding or storms, and describe the measures taken to mitigate or manage them.

Social:

• Health and safety: Outline your health and safety policies and procedures to ensure a safe working environment for employees, occupants and visitors to your buildings.
• Community involvement: Describe your initiatives to support local communities, such as sustainable development programmes, partnerships with charities or urban regeneration projects.
• Occupant well-being: Highlight measures taken to improve the comfort and well-being of your buildings’ occupants, such as green spaces, health and fitness facilities, or work-life balance policies.

Governance:

• Governance structure: Explain how your company is organised and how you ensure transparent, ethical and responsible management of property assets.
• Business ethics: Describe your policies to prevent corruption, tax evasion and other dubious business practices, as well as mechanisms for reporting ethical breaches.
• Risk management: Describe how you identify and manage the financial, legal and operational risks associated with your property assets.

Be sure to provide quantitative and qualitative data, measurable objectives and key performance indicators for each ESG area.

It is also important to adopt recognised reporting standards, such as the Global Reporting Initiative (GRI) guidelines or the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, to ensure the credibility and comparability of your ESG report.