Posted by Macquarie Asset Management
November 30, 2020
Mary Nicholson: This year we were very pleased to see a significant increase in the number of assets in our portfolio that participated in GRESB, with more than 60 of our assets assessed this year. This was almost double the number we had previously, and we look forward to building that out towards 100 per cent participation next year. We also observed increases in our GRESB scores across the board, including at both the fund and assets levels, with some of these also receiving Sector Leader status. Those assets that have achieved this result should rightly be very proud but we really must thank all the portfolio companies for their efforts over the past year. These results are all the more impressive when we consider the challenges of 2020.
Chandra Eastwell: GRESB is the sustainability benchmarking framework for real estate and infrastructure, and for a number of years MIRA has been a participant in GRESB’s monitoring and evaluation standards across both sectors. These benchmarks are important because they allow assets to compare their sustainability performance against their peers. It is the only framework, particularly on the infrastructure side, that allows businesses to engage in that process—if you operate a toll road you can compare results against other toll roads, if you operate an airport you can compare your results against other airports.
MIRA Head of Responsible Investment
MN: Analysing the GRESB data is particularly powerful for our assets because understanding their performance ultimately leads to concrete ideas about how they can improve. We use these results as a tool to engage with our portfolio companies to talk about sustainability and to identify opportunities. Within a portfolio as large as ours, which includes 150 infrastructure assets, we can share experiences amongst peers and open a dialogue, between the CEOs of our businesses and our sustainability leads, to exchange ideas on how they can improve collectively.
CE: AGS Airports for example did very well. Glasgow Airport was named Sector Leader and ranked as a best performing airport receiving a five-star rating for its sustainability performance while Aberdeen and Southampton airports were ranked 2nd and 3rd . AGS Airports used their GRESB results from 2019 to help build out their sustainability strategy and improvement plans for the following year.
Elenia had another excellent year and they have an impressive cyclical approach to sustainability improvements and credit GRESB as a key component of this on-going, consistent approach to improvements.
It’s also been great to see the progress of NSW Land Registry Services. Through a strong commitment to continuous improvement they’ve increased their score over the three years they have been participating in GRESB. In 2020 they not only achieved the maximum possible 5-star GRESB star rating, but also ranked top in their peer group.
MN: We have seen a trend over recent years to increase transparency around reporting, both self-initiated and from our investors as well. A few years ago, investors were happy to receive information on the financial performance of their fund investments, however, they are now increasingly focused on receiving high quality, transparent information on non-financial performance. Tools like GRESB provide a mechanism through which investors and managers can access the results and the performance of their funds and the underlying assets in which those funds are invested. As investors continue to seek more transparency, GRESB is a great way for us to provide that transparency in a consistent format.
CE: This has been a crucial year for ESG and ESG reporting for a number of reasons not least as 2020 has forced people to focus on the social dimensions of ESG. For those of us who already believed in the importance of ESG, this year has only confirmed our beliefs. For those who were not convinced by the importance of non-financial factors in investment discussions or decisions this crisis should have changed their minds.
MN: The focus on ESG within the sector will continue to grow and in particular around the ‘S’ component of ESG – the social. Historically there has been a huge amount of focus on climate. The emphasis on climate remains important and will not diminish in any way, nor should it but moving forward, we expect a renewed focus on the social aspect of ESG and the need for greater transparency across all parts of ESG reporting. As we continue to see developments in ESG monitoring, reporting will likely become more well-rounded across the social and the governance aspects in much the same way we have seen develop across environmental reporting.
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