Driving force behind GRESB
Being one of the world’s largest real estate investors we will take account of environmental, social and governance (ESG) factors in this asset class.
APG is one of the world’s largest real estate investors and invests circa 10% of its assets under management in this asset class. We usually hold 5% to almost 40% stakes in funds and companies. We are a driving force behind an industry initiative, the Global Real Estate Sustainability Benchmark (GRESB), and are pushing for consistent sustainability reporting standards across Real Estate Associations. We actively engage with our portfolio investments and asses new investment against strict ESG criteria.
Outperformance of APG against GRESB benchmark
The real estate sector accounts for circa 40% of emissions in the EU alone and is a contributing factor to climate change. APG believes that real estate companies and their investors benefit from enhanced sustainability performance of portfolio companies. To be able to assess and benchmark the sustainability performance of our real estate portfolios (listed and non-listed) globally we have been a driving force behind GRESB. The real estate portfolio of APG’s clients outperforms the GRESB benchmark, not least because we pursue a strategy of active engagement and dialogue with our investee companies to improve their performance. In May 2011, APG received the platinum IPE RE Award for outstanding industry contribution for the second year in row for the GRESB initiative.
Driving consistency in Real Estate sustainability reporting
APG is very active in different Real Estate Associations such as INREV and EPRA to ensure that these develop consistent sustainability reporting standards. Moreover, we were the only investor participating in the Global Reporting Initiative’s (GRI) Construction and Real Estate Sector Supplement and have ensured that there is consistency between this , GRESB and other sustainability guidelines promoted by Real Estate Associations.
Active dialogue and engagement
We actively exercise our shareholders rights to address corporate governance concerns at investee companies. We have a clear vision of what is acceptable and what isn’t and communicate this during dialogue with companies. Next to a real estate specialist in ESG for Europe we have a dedicated Sustainability & Governance Specialist in Asia also conducts due diligence on the ground.
We actively engage our investee companies to operate in a sustainable way, for example:
- We conducted workshop and pilot with fund manager Goodman Group about Real estate investments in Belgium and the Netherlands
- We engaged Vastned Retail about Board remuneration
- We have a long-standing engagement with Vesteda since 2009 who has since developed a vision and policy on sustainability
Only 1st or 2nd quartile investments
We ensure that environmental, social and governance risks are understood during and prior to investing. External managers have to complete the online (GRESB) survey as a mandatory part of our due diligence process. If an investment does not yet rank among the top or 2nd quartile performers in the GRESB database, it has to commit to achieving this within two years. If an investment manager fails to do so we may not make further investments with this manager.
In sum, at APG sustainability and governance forms an integral part of the investment process. Our reputation as a leader in the field of responsible investing in real estate differentiates APG from other asset managers.