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Responsible Property Investment (RPI) Summary Policy
DTZ Investors is a full
service vertically
integrated real estate
manager. We have been
operating in the UK since
1968 and in Continental
Europe since 1999. We recognise that we have a fiduciary
duty to our clients to achieve the best
returns possible from the assets we
manage on their behalf. However
achieving those returns should not be at
an undue cost to wider society. DTZ
Investors therefore understands its
responsibility to manage those assets in a
manner that is sensitive to the
environment, provides social benefit and
does not put the reputation of either DTZ
Investors or our clients at risk through
poor corporate practices.
In 2013 we became a signatory to the
United Nations Principles for Responsible
Investment (UNPRI), a voluntary
framework for incorporating
environmental, social and governance
(ESG) issues into investment decision-
making and ownership practices. In
the same year, we developed our
Responsible Property Investment (RPI)
Strategy applicable to all of our UK
portfolios.
This document is DTZ Investors’ RPI policy,
communicating our strategy, approach
and governance procedures for the
implementation and monitoring of RPI
principles within our investment strategy.
2 Summary policy
Our approach
Summary policy 3
With climate change, increasing legislation and changing occupier demands we believe
that a sustainable portfolio will have the effect of reducing environmental impact and
risk of obsolescence, lowering operating costs, and enhancing tenant retention,
therefore improving investment performance of our portfolios. Consequently, our
strategy focuses on understanding the impact of these issues on future value and
minimising the risk to our portfolios. Therefore integrating environmental, social and
corporate governance (ESG) considerations into our investment process and timeline
from pre-acquisition to disposal (see diagram on left) is critical to our approach to
Responsible Property Investment, while operating within the context of our clients’
financial objectives.
Through our RPI strategy we will be compliant with UK statutory requirements and EU
directives, including: the Carbon Reduction Commitment Energy Efficiency Scheme
(CRC), the Energy Savings Opportunity Scheme (ESOS), the Minimum Energy Efficiency
Standards (MEES) and the Heat Network Metering and Billing Regulations 2014 (see
Annex A for a brief description of the schemes and our compliance procedures). In
addition through our RPI strategy we will seek to go beyond compliance, establishing
best in class RPI practices to ensure our assets make a positive impact to the
environment and stakeholders in which they interact.
Our strategy follows a proportional cost-benefit led approach where this does not
mean that all initiatives must be self-financing or indeed that there must be a proven
economic reward, but means that we will consider the relationship between the
financial cost of any investment or activity and our evaluation of ESG rewards.
Importantly we will also consider our portfolios in the context of market practice and
‘peer group’ properties to guard against depreciation risk and obsolescence (‘future
proofing of investments’).
For us to meet the objectives above and ensure we are reacting to climate related
risks, and changing occupier demands we established an RPI committee,
representative of our fund management, energy & sustainability and property
management teams. It is this committee that has been responsible for the
development of our strategy, core areas of focus (page 4) and targets (Appendix B),
and is responsible for overseeing the implementation of this policy, reporting on
results and future modifications.
Furthermore, we are committed to fostering the right culture and appropriate training
to enable all employees to understand the objectives of our responsible investment
policy as well as relevant legislation and best practices.
• Sustainability risk assessments are carried out at pre-acquisition to identify potential ESG issues and mitigation measures. Issues with direct financial relevance are integrated into our valuation process.
• Our property managers (and third party suppliers) must adopt our RPI policy to ensure asset performance is monitored, benchmarked and maintained
• Our assets are covered by an Environmental Management System (EMS) to minimise their impact on the environment.
• We have developed fit out and refurbishment guides to ensure our contractors take into account sustainability at the earliest possible stage
• Sustainability improvement plans are carried out across assets
Improvements / renovations
Operation and Maintenance
Acquisition / disposal and design stages
• We benchmark at the asset level to the Real Estate Environmental Benchmark (REEB) and at a portfolio level to the Global Real Estate Sustainability Benchmark (GRESB) and use the results to identify opportunities for performance and ESG policies.
Benchmarking and review
The RPI policy is applicable to all of our
discretionary managed property portfolios
and to our advisory mandates in so far as
concerns the scope of our contractual services
and ability to influence the management of
portfolios.
The core areas of focus (excluding legislative
demands and benchmarking) are shown left.
These are a combination of both
environmental and social indicators that are
applied across our portfolio and are practically
assessed at the property level for
implementation. Our objectives and short-
long term targets align to these core areas.
The implementation of our RPI policy aims to
be specific and measurable so that we may
evaluate and report upon the success of this
policy and its implementation in future years.
Our strategy is not static but is constantly
evolving responding to innovation within the
market and the needs of our stakeholders. As
a result our RPI committee will review the
strategy annually, with progress reviewed on
a monthly basis.
The following represents the core areas
of focus covered by the RPI Policy:
CO2
Energy Efficiency
Water Efficiency
Waste Management
Tenant & Community Engagement
Carbon Emissions
Health & Wellbeing
Biodiversity
Refurbishment & Development
Procurement and supplier management
Flood Risk
Transport
Renewables and sustainable technology
Summary policy 4
Our approach
Summary policy 5
Stakeholder Engagement
We have in a place a stakeholder engagement programme that
ensures our clients, Investment Committees, DTZ Investors staff
and third party suppliers are aware of our policy, procedures and
targets. As such quarterly meetings are held to communicate on
progress and strategy development on a quarterly basis.
For our assets we have put in place a Tenant & Community
engagement programme which allows us to communicate
effectively the aims of the RPI strategy to internal and external
stakeholders.
Our wider stakeholder engagement includes dialogue and
participation in thought leadership with groups such as the UK
Green Building Council.
In 2019 we will publish our first annual ESG report to highlight the
journey that DTZ Investors has gone through in integrating ESG into
our property and asset management practices over the past five
years.
Asset Improvement & Performance Management
We undertake audits across the portfolio to create a baseline from
which all future performance can be measured. The audit process
creates the opportunity to examine in detail the asset and put in
place a “property improvement plan”.
The property improvement planning process examines the
opportunities available for the asset and qualifies them against
economic, commercial and operational criteria to create a short list
for implementation. This process of continuous improvement is
monitored and reported internally on a quarterly and annual basis.
Summary policy 6
Benefits
The implementation of DTZ Investors RPI
strategy and the overall approach to ESG
has a number of benefits for our clients,
our tenants and our stakeholders. These
can be summarised as follows:
Effective management of risk
Driving greater portfolio performance through efficiency
Active management across our portfolio leading to reduced environmental impact
Reduced utility consumption across our assets and portfolio leading to reduced costs of occupation
Future proofing of buildings and assets
Enhanced levels of stakeholder engagement with occupiers, staff, communities and relevant industry bodies
Robust and effective approach towards property improvement planning
Annex ALegislation that is changing the way we must operate:
CRC The CRC Energy Efficiency Scheme is a mandatory reporting and pricing scheme to improve energy efficiency in large public and private organisations. CRC operates in phases. Phase 1 ran from April 2010 until the end of March 2014. We are now in phase 2 that runs from 1 April 2014 to 31 March 2019. Qualification for the scheme is based on electricity usage. Organisations which participate within the CRC are required to monitor their energy use, and report their energy supplies annually. Participants must purchase and surrender allowances for their emissions. The allowance price for 2015/16 is £16.10/tonne of CO2 and can be expected to rise over time. Qualifying organisations have to comply legally with the scheme or face financial and other penalties. More information is available on the Environment Agency CRC web pages. https://www.gov.uk/crc-energy-efficiency-scheme-qualification-and-registration
ESOS The ESOS Regulations 2014 were introduced to give effect to a European directive. The Energy Saving Opportunity Scheme (ESOS) is a mandatory energy assessment scheme that applies to large UK undertakings and their corporate groups. Organisations that qualify for ESOS must carry out ESOS assessments every 4 years with the first deadline for compliance on 5 December 2015. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures. There is no regulatory requirement for participants to implement the energy saving opportunities identified. This is for each organisation to determine themselves. The regulator may issue civil sanctions including financial penalties if an organisation does not meet the scheme’s obligations. More information is available on the Environment Agency’s web pages at https://www.gov.uk/government/publications/comply-with-the-energy-savings-opportunity-scheme-esos
MEES The regulations that introduce Minimum Energy Efficiency Standards (MEES) on the non domestic property sector in England & Wales satisfy the government’s obligation under the Energy Act 2011 that aims to reduce emissions of greenhouse gases and the demand for energy. The equivalent Scottish legislation, currently in production, will follow the same principles. Here’s a summary of the key dates and implications:
• Minimum energy efficiency standard for buildings will be set at an E EPC rating
• From 1st April 2018 it will apply to all new leases & also lease renewals
• From 1st April 2023 it will apply to all leases including where one is already present
• Exemptions are possible on certain criteria including diminution of value
• All exempted properties will require to be registered on a central DECC database
• Local authorities will be responsible for enforcement. There will be fixed penalties for non compliance ranging from £5,000 - £150,000.
The Heat Network (Metering and Billing) Regulations 2014
These regulations implement the requirements in the Energy Efficiency Directive (EED) with respect to the supply of distributed heat, cooling, and hot water. Article 9 of the legislation requires that final consumers of district heating, district cooling, and communal heating and hot water systems are provided with competitively priced individual meters where it is cost effective and technically feasible. Where individual meters are installed, final consumers should be provided with billing information that is accurate and based on actual consumption where it is cost effective and technically feasible to do so.
Those supplying and charging final customers for heating or cooling through a network must make a notification under regulation 3 to the regulator on or before 31 December 2015. The notification and assessment process will need to be completed at least once every 4 years.
7Summary policy
Key RPI policy procedures that help us remain compliant
CRCEnergy Efficiency Sceme
ESOSEnergy Saving
Oportunity Scheme
MEESMinimum Energy
Efficiency Standards
Heat Network Regulations
Quarterly environmental reporting covering supplies and use of energy across all our assets which provide the basis for calculating our portfolio’s carbon footprint
Property improvement plans and EPC+ programmes identify opprtunities for energy efficiency in existing assests. Detailed ESOS audits are carried out on key assets
CRC evidence retained as part of EMS procedures
Technical feasibility assessment carried out for qualifying properties
Programe of identification of relevant heat networks
EPC assessments for fit-outs and refurbishments at pre-aquisition stage
8 Summary policy
ESG targets and objectives have been established to encourage property improvement, asset performance and occupier & community engagement.
*The same portfolio since the baseline year.
Occupier and Community Engagement Objectives:
As we progress through our programme, we will review progress against targets on a quarterly & annual basis with the aim of achieving continual improvement in the environmental performance of our buildings and our approach to sustainability, occupier engagement and corporate governance.
Indicator Target/Objective
• Reduce landlord-controlled carbon emission intensity (by floor area) of the directly managed
portfolio by 40% by 2030 from a 2016 baseline
• Reduce electricity & gas usage of the directly managed standing portfolio* portfolio by 10% by 2021 from a 2016 baseline
• Reduce water consumption of the directly managed standing portfolio* by 10% by 2021 from a 2017
baseline
• Achieve a recycling rate of 70% by weight by 2020 across the directly managed portfolio where there is a landlord waste contract in place
• Achieve 100% diversion from landfill through primary disposal route by 2020 across the directly managed portfolio
• Identify opportunities to install on-site renewable and energy efficient technologies to support occupier demands
Annex B
Targets & Objectives
• Distribute DTZ Investors’ Fit-Out guides to occupiers and third party contractors to encourage
adoption of sustainable practices during fit-out, in-use operation and refurbishment
• Conduct annual occupier surveys with the aim of improving occupiers’ awareness of energy efficiency and occupational behaviour including health & wellbeing
• Roll-out programme of occupier and community engagement activities to raise awareness of ESG issues and encourage sharing of best practice
Summary policy 9
Environmental Performance Targets & Objectives
CO2
1: Scope 1 & 2 Emissions: Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2
emissions are indirect emissions from the generation of purchased energy.
2: Standing Portfolio: The same portfolio since the baseline year. If properties are sold, they will be removed from
tracking.
3: Like-for-Like: The same portfolio as the previous year and where data is available for the same period for both
years.
Please note: DTZ Investors 2018 performance may change due to the addition of updated consumption
figures due to billing in March – May -however impact is expected to be immaterial.
Annex C
Carbon Emission and Energy
Interim Performance Update
Updated March 2019
Summary policy 10
33% emissions decrease against
2016 baseline
Change in carbon emission intensity (scope 1 and 2)1 for the
landlord-controlled portfolio between 2016 and 2018 (kg/
CO2e/annum) against the target performance line of reducing
carbon emission intensity by 40% by 2030 from a 2016
baseline.
Changes in electricity and gas usage for landlord controlled
standing portfolio2 between 2016 and 2018 (kWh/year) against
the target performance line of reducing electricity and gas by
10% by 2021 from a 2016 baseline.
-9.3% consumption decrease against
2016 baseline
Annual change (%) in electricity and gas usage comparing like-for-
like3 portfolios for eight rolling quarters with gas adjusted for
season variation using heating degree days (HHD).
100 Properties 96 Properties Reduction in electricity usage 2 years running in the
like-for-like portfolios
We continue to monitor our environmental performance on a quarterly and annual basis. Where the following provides an update on our
carbon emissions and energy performance up to the end of December 2018.
CO2
Chris Cooper
Chief Executive, DTZ Investors
Direct Phone: +44 (0) 20 3349 0300
www.dtzinvestors.com
©Cushman & Wakefield D341 02/2018
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