Fourth Consecutive Year Sector Leader Status for Hines in the 2020 GRESB Real Estate Survey

/in /by

EVORA Global is incredibly proud to have supported Hines pan European Core Fund (HECF) in achieving GRESB European Diversified Fund Sector Leader for an unprecedented fourth year in a row.

GRESB, one of the leading ESG benchmarks for real estate and infrastructure investments across the world, has named HECF one of the “best of the best” in sustainability leadership across the real estate sector.

Achievements this year include 100% Sustainability Certificate coverage across the portfolio, as well as a 15.7% reduction in landlord-controlled energy use and a 23.8% reduction in landlord-controlled greenhouse gas emissions since 2016, for like-for-like assets. The Fund also ensured that at all landlord-controlled electricity supplies were either transferred to 100% renewable energy sources, or scheduled to transfer as early as possible in 2020.

HECF also ranked first out of all global 412 GRESB participants which participated in the optional Resilience module, demonstrating the portfolio’s ability to future-proof the value of its assets over time.

This is an incredible achievement and highlights Hines commitment to ESG. Congratulations to everyone involved!

“We are once again delighted on behalf of our client for these numerous excellent outcomes. It is great to have both Hines’ and EVORA’s hard work validated in this way. It’s a strong partnership that clearly brings great things out of one another. And now we must turn our attention to next year and beyond because – of course – there is still plenty more progress to make within ESG!”

Oli Pye, Director EVORA

“I wanted to take a moment to thank the EVORA team for all of the hard work, diligence and creativity throughout the year to deliver these outstanding GRESB results. As the impact of climate change accelerates, so should our ESG efforts, and I am happy to say that as a team we have been able to keep our eye on the ball and prepare the HECF portfolio in order to stay one step ahead.  I look forward to continuing to sharpen our pencils as we move forward.”

Daniel Chang, Managing Director, Hines

It is less than a month until the introduction of CO2 pricing in the German building sector – are property owners and tenants prepared?

/in /by

On January 1, 2021, the CO2 price will be introduced in the German heating market. It will start at EUR 25/t and then rise in a predictable manner to EUR 65 by 2026, before the price is freely determined via emissions trading from 2027.  Most estimates predict that they will then quickly reach triple digits.

In 2019, when the then German ‘Klimakabinett’ made its decisions it was still seen as one of the key drivers for achieving Germany’s CO2 reduction targets. Today, there is little sign of that. The price is considered too low to have a strong steering effect. The governing coalition is also divided on the question of who should carry the costs: is it the tenants, the landlords, or both? If no cap is introduced, and it does not look like it will, landlords will initially be allowed to pass on the full CO2 price to tenants as part of their normal heating costs. In this scenario the energy supplier would simply add the CO2 price to the energy bill and currently doesn’t even have to declare it separately.

Have you already talked to your key tenants about what the CO2 price will cost them in the next few years and how these added costs can be reduced? Have you analysed the impact that this levy could have on the value development of your assets?

Let’s talk about it. For 10 years, EVORA has been successfully helping clients with understanding climate policy risks and opportunities and with positioning themselves strategically, making their funds or individual assets productive, profitable, and resilient to change. Now also in Germany.

How can ESG help deliver better infrastructure?

/in , /by

Infrastructure is vital for living comfortable, convenient modern lives.  Every day, infrastructure systems are working beneath the ground, on the land, and above our heads. Each morning, when you turn on the tap, power up your computer, or step outside to travel to work, you are interacting with infrastructure.  Infrastructure has a life of its own and without it our modern lives would be very different.

Infrastructure is a huge area of investment globally which attracts both government and private sector funding. Due to its size and complexity, it often requires a complex mix of investment strategies including debt, equity and bonds.  Infrastructure assets, alongside real estate, are categorised as real asset investments and therefore they share similar Environmental, Social and Governance (ESG) risks and opportunities.  However, the scale and complexity of infrastructure assets can create some unique challenges.

The United Nations predicts that population growth will continue, reaching 9.7billion people on the planet by 2050. Much of this population growth will be in urban areas, and infrastructure provisions will need to grow alongside the population. As a result of the continued and growing demand for infrastructure provisions, infrastructure assets have significant potential to positively affect the environment and society. These assets will also play a role in creating a successful and resilient response to the challenges of a changing climate, as well as being affected by climate change themselves.

Due to the pivotal role infrastructure assets hold in meeting current and future demand, and their centrality in addressing climate change, they have varied and wide ranging stakeholder interest groups with high levels of expectation when it comes to ESG delivery.  For this reason, EVORA are seeing many investors coalesce and gravitate toward the United Nations Sustainable Development Goals (UN SDGs) as a suitable framework that addresses stakeholders concerns and which they know and understand.  Increasingly, there is a growing expectation that implementing effective ESG strategies aligned to the UN SDG’S which address the associated risks and opportunities and link actions to outcomes is becoming the minimum requirement.

This year, the Covid-19 pandemic has profoundly impacted the global economy, causing many to take stock, reflect and consider the future of society. We face dual crises: responding to the pandemic and addressing and responding to environmental and social challenges, including climate change. In a post-Covid world, infrastructure can be central to addressing these multiple challenges. This has been solidified by both the UK Government and the new US administration pledging to place investment in infrastructure at the heart of their ‘build back better’ programs. 

So why look at infrastructure now? Firstly, investment in infrastructure development is urgently needed to replace aging and poorly performing assets with assets fit for the 21st century that positively address the climate crisis.  Secondly, infrastructure assets are fundamentally about investing in future generations but also, crucially, provide much needed jobs today, thereby providing an excellent way to rebuild and diversify regional and national economies.  With these factors in mind, having robust ESG management becomes essential in managing outcomes as well as demonstrating effective use of funding vehicles.

In the recent Aviva Real Assets Study 2020 [1], in which global institutions were asked about their views on ESG post-COVID, the overwhelming response showed ESG as front and centre for investors’ concerns. 81% of respondents stated that ESG objectives and delivering on sustainability is a primary duty of their organisations.  Furthermore, 91% of global insurance and pension fund investors are now committed to delivering Net Zero.  As a result, infrastructure assets in all its various classes and forms are the foundation for how the Net Zero commitment will be realised.  The Aviva survey also indicates that ESG has evolved in its sophistication and needs to be considered as a balanced a score card between the ‘E’ and ‘S’ and not simply about environmental risk management that has been the focus in the past.

So how can the ESG and sustainability agenda be delivered in practice?  There are a variety of excellent reporting frameworks, such as GRESB and the UN Principles for Responsible Investment (PRI), for investors to work within which provide globally recognised frameworks which set a baseline for benchmarking performance.  Launched in 2016, GRESB Infrastructure continues to grow in popularity, with over 426 assets totalling $579billion assets under management participating in 2020.  As the scheme evolves, greater focus is given to performance outcomes rather than just good intentions.  Now more than ever, it is imperative for investors to analyse, understand and seek ways to optimise ESG performance in their investments. Reporting is a great place to start.

We have been working with closely with investors over the past decade to deliver best-in-class ESG practices, helping them strive to constantly do better by setting ever more ambitious targets to improve ESG performance. EVORA can help you understand and optimise your infrastructure ESG approach. If you are interested in finding out more, contact the team at infrastructure@evoraglobal.com.

[1] https://www.avivainvestors.com/en-gb/capabilities/real-assets/real-assets-studies/real-assets-study-2020/

EVORA Global is delighted to announce that Meike Borchers has joined as Head of Germany and the wider DACH region.

/in /by

Meike joins EVORA at a hugely significant time as we continue with our international growth strategy, having recently opened offices in Frankfurt, Milan and India. This is another landmark appointment for EVORA and further underpins capabilities as we develop both depth of expertise and geographies for the real estate investment market. Meike brings with her a wealth of expertise, having spent a number of years in the US, UK and most recently in Germany.  She has a strong technical background, which is critical for our end-to-end service offerings, and is an expert in building assessment and certification. As such she embodies EVORA’s holistic approach to long term value.

Meike will be responsible for introducing the EVORA suite of  ESG services to the real estate sector in Germany and the wider DACH region, with a particular understanding and focus on the specific national and regional aspects as well client expectations.

The timing of the entry into the German market couldn’t be better; it coincides with the introduction of a number of game-changing developments in the real estate sector such as the adoption of the Taxonomy Regulation by the European Commission, the development of the EU’s Green Deal components and most recently the European commitment to speed up effort and to cut greenhouse gas emissions by at least 55% by 2030 while still targeting climate neutrality by 2050.

‘Having worked in sustainable real estate consulting for over a decade, it seems to me that the time is finally ripe for big meaningful steps to a low carbon future and a sustainable and healthy built environment. Shaping this future takes a range of technical and economic expertise paired with passion and innovative tools which I am very happy to have found with the EVORA team. Auf geht’s!’   

Meike Borchers. Head of Germany

Also joining the German team is Melf Asmussen who will be leading our technical services and certifications work. While EVORA has deep expertise in ESG Strategies and GRESB reporting, the ability to drive these policies into the buildings themselves is a critical element in our approach.  Melf has a Masters in Energy and Environmental Management as is perfectly placed to lead our technical teams in the DACH region.

“We are delighted to welcome Meike and Melf to the EVORA family at such a critical time for our market and the wider investment community. Public perception, investor expectations and regulatory disclosure requirements are combining to create a time of unprecedented change and the formal opening of our office in Germany allows us to support our existing and new German clients more fully in their transition to a low carbon economy. Only 10 years to meet a 60% reduction in emissions!”

Philippa Gill , Director – Europe