Guidelines

The investment manager, in collaboration with the governing body of the vehicle, should clearly state in the constitutional documents the vehicle’s intended level of adoption of the inrev-guidelines">Sustainability guidelines and perform an annual self-assessment of the effectiveness of its intended implementation.

To enable investors to fully understand the nature and extent of compliance of the vehicle’s intended governance framework with the INREV Guidelines, an initial as well as an ongoing annual self-assessment should be performed by the investment manager and the governing body of the vehicle, and the results disclosed appropriately in their reporting to investors.

See also RG16 and RG17.

Annual

The investment manager should describe in their reporting to investors the overall ESG strategy and objectives of the vehicle together with the associated targets and how these goals will be facilitated by the organisation and governance framework of the vehicle.

The investment manager should include in its ESG reporting a description of the vehicle’s ESG strategy and the process through which it was derived. This description should include but is not limited to the following information:

• The overall approach to how the vehicle developed an ESG strategy. Explain to what extent ESG factors have been considered and integrated into the overall strategic goals of the vehicle and its decision-making processes - see ESG02, ESG06 and ESG10 of the inrev-guidelines">INREV Sustainability module;
• A summary of the key elements of the long-term ESG strategy for the vehicle;
• Based on the overall ESG strategy, a description of the annual objectives and associated targets of the vehicle, the initiatives taken and the progress made during the reporting period, by reference to the topics included, but not limited to, those listed in Table 1 of ESG02 of the Sustainability module;
• Details of the ESG reporting framework the vehicle aspires to follow, including references to recognised ESG reporting standards, frameworks and commitments at the organisational level (eg UN PRI, UN Global Compact, IFC Performance Standards) - see ESG16 of the Sustainability module
• Details of any ESG assessments and scoring in which the vehicle participates, including details on any future ambitions to do so.

Certain legacy vehicles or funds which opt not to have a coherent ESG strategy and objectives should nonetheless disclose this status and provide any relevant explanations.

Annual

The investment manager should specifically disclose in their reporting to investors the climate change strategy and objectives of the vehicle.

As part of ESG reporting, the investment manager should consider the following aspects related to climate change:

• An overall description of the vehicle’s climate change strategy;
• The expected resilience of the strategy against different climate-related and other scenarios (eg 2°C or 1.5°C or a lower scenario) and its potential impact on the financial performance of the vehicle - see ESG03 of the inrev-guidelines">Sustainability module;
• Details of any climate pledges, commitments and ambitions (eg net zero carbon, science-based targets), including the specific framework (eg CRREM, SBTi, WGBC), the scenario pathway target, the target year and a description of the methodology used (eg coverage of scope 1,2,3 emissions, embodied carbon and/or operational carbon).

Certain legacy vehicles or funds which opt not to have a coherent climate change strategy should nonetheless disclose this status and any relevant explanations.

Annual

The investment manager should disclose, as part of their reporting to investors, ESG initiatives at the property portfolio level and comment on the progress made against any specific targets as defined in the vehicle’s ESG strategy.

When reporting to investors on ESG initiatives related to asset strategies and business plans, the investment manager should consider the aspects set out under ESG08, ESG12, ESG13 and ESG14. These aspects include but are not limited to the following information:

• ESG strategy for asset management activities, including a description of ESG targets and action plans at portfolio level and/or asset level, as appropriate, which describes the specifics of programmes related to individual assets or asset types and geography;
• Details of initiatives included in asset management programmes to measure and/ or reduce energy consumption, mitigate GHG emissions, ensure climate resilience, water and waste management and improve biodiversity;
• Details of ESG asset-level considerations related to acquisitions, refurbishments and developments;
• Specific initiatives to address social aspects related to asset management programmes, such as HSW risks and opportunities, stakeholder engagement strategies, including tenant engagement actions and supply chain management;
• Description of the vehicle’s approach regarding building certificates and energy ratings within the ESG strategy. Detail the current state, the certification scheme(s) and/or energy ratings. Include details of any related ambitions.

 Certain legacy vehicles or funds which opt not to have a coherent ESG asset management strategy should nonetheless disclose this status and any relevant explanations.

Annual

The investment manager should disclose and explain a set of essential key performance indicators which are aligned with the overall strategy of the vehicle.

The investment manager should define a set of key performance indicators, which cover the entire portfolio, both under the manager’s and the occupiers’ operational control, in accordance with ESG objectives of the vehicles, and include the required INREV ESG vehicle-level KPIs.

Reference should be made to ESG factors covered in Table 1 of ESG02 of the Sustainability module.

For the purposes of reporting on governance matters, the results of self-assessment against INREV’s governance best practices should be included (see reporting guidelines of the Governance module).

Data disclosure may be presented in line with widely recognised methodologies (eg GRESB, CRREM, GRI, TCFD, SBTi) (see list of abbreviations in Appendix 4 under Tools and Examples). If such a methodology is adopted, the investment manager should disclose the specifics of the calculation methodology applied, explaining for example, how normalisation factors and what types of energy or emissions were included in the ratio.

Disclosures and explanations should consider both absolute and like-for-like data.

Management’s analysis and discussion of data presented, eg intensity ratios and emission data by property type, should be included.

Disclosures should clarify the degree to which estimated data was used in determining overall values for elements that are outside of the manager’s operational control, or for which data could not be reliably collected.

The INREV ESG vehicle-level KPIs include “data coverage” indicators to promote data transparency. If the data related to any of the indicators is not available or not applicable, the investment manager should explain this. For instance, whereas the data for energy consumption and renewable energy under the manager’s control should be available, the data under the occupiers’ control or allocation by floor area may not be available or may need to be estimated.

The investment manager may also consider reporting the essential KPIs on an asset-level basis. If the investment manager chooses to adopt this recommendation, the related data definitions set above for vehicle-level reporting should be followed.

Annual

Environmental KPIs (annual disclosure)

Energy consumption¹

ENV1

Energy consumption, for the proportion of portfolio that is in landlord’s control

kWh

ENV2

Energy consumption, for the proportion of portfolio that is in tenant’s control

kWh

ENV3²

Estimated energy consumption (separate disclosure for the proportion of portfolio that is in landlord’s and tenant’s control)

kWh

ENV4

Total energy consumption (ENV1 + ENV2 + ENV3)

kWh

ENV5³

Total energy consumption data coverage, by area⁴

% of m2

ENV6³

Energy intensity (based on ENV4) (SFDR Annex 1 Table 2 Additional Real Estate PAI – 19) ⁴

kWh / m2

ENV7³

Energy intensity (based on ENV4), by property type⁴

kWh / m2

Renewable Energy

ENV8³

Generated and consumed on-site by landlord (SFDR Annex 1 Table 1 Universal PAI - 5)

kWh

ENV9³

Generated on-site and exported by landlord (SFDR Annex 1 Table 1 Universal PAI - 5)

kWh

ENV10³

Generated and consumed on-site by third party or tenant (SFDR Annex 1 Table 1 Universal PAI - 5)

kWh

ENV11³

Generated off-site and purchased by landlord (SFDR Annex 1 Table 1 Universal PAI - 5)

kWh

ENV12³

Generated off-site and purchased by tenant (SFDR Annex 1 Table 1 Universal PAI - 5)

kWh

ENV13

Renewable energy data coverage, by area⁴

% of m2

Greenhouse Gas Emissions (GHG)

ENV14²

Direct emissions – Scope 1 (SFDR Annex 1 Table 2 Additional Real Estate PAI – 18)

tonne  CO2e

ENV15²

Indirect emissions – Scope 2 (SFDR Annex 1 Table 2 Additional Real Estate PAI – 18)

tonne CO2e

ENV16²

Indirect emissions – Scope 3⁵ (SFDR Annex 1 Table 2 Additional Real Estate PAI - 18)

tonne CO2e

ENV17²

Estimated emissions, by scope 1, 2, 3

tonne CO2e

ENV18

Total operational carbon (ENV14 + ENV15 + ENV16 + ENV17) (SFDR Annex 1 Table 2 Additional Real Estate PAI - 18)

tonne CO2e

ENV19³

Total operational carbon data coverage, by area⁴

% of m2

ENV20³

Operational carbon intensity (based on ENV18) (SFDR Annex 1 Table 1 Universal PAI - 3) ⁴

tonne CO2e / m2

ENV21³

Operational carbon intensity (based on ENV18), by property type⁴

tonne CO2e / m2

Climate Change – Transition     Risks and Opportunities

ENV22

Exposure to fossil fuels through real estate assets (SFDR Annex 1 Table 1 Real Estate  PAI – 17)

% of AUM

Climate Change – Physical Risks and Opportunities

ENV23²

Proportion of assets that fall into low / medium / high physical risk categories

% of AUM

Water Consumption

ENV24

Water consumption, for the proportion of portfolio that is in landlord’s control

m3

Waste Management

ENV25

Waste generated, for the proportion of portfolio that is in landlord’s control

tonne

Building Certificates

ENV26³

Percentage of assets with a certificate⁶, by area⁴

% of m2

Energy Ratings

ENV27³

Percentage of assets with an energy rating⁶, by area⁴

% of m2

ENV28

Exposure to energy-inefficient real estate assets (SFDR Annex 1 Table 1 Real Estate  PAI 18)

% of AUM

The investment manager should report to investors any material information related to specific events or initiatives linked to the vehicle’s ESG strategy or status.

During the lifecycle of a vehicle, there may be situations or unforeseen events, including ESG-related issues, that the investment manager understands to be material to the outcomes of investors, which warrant timely and clear communication to investors outside regular reporting obligations. The investment manager, together with the governing body of the vehicle, should enable such communications to take place through appropriate channels such as written reports and/or convening meetings. The information communicated should be relevant and reliable – see ESG11 and ESG16 of the inrev-guidelines">Sustainability module for details on reporting framework.

Annual

The investment manager should provide a statement of the current level of compliance with applicable ESG legislation and its exposure to possible future regulatory developments.

ESG reporting should detail the vehicle’s approach for ensuring compliance with current legislation relating to ESG issues and preparations for any future legislation that may be undertaken over its life cycle (see ESG01 of the inrev-guidelines">Sustainability module). It should detail objectives and specific actions for ensuring compliance with current ESG regulations and describe the steps to prepare for any upcoming legislation.

The investment manager should report against compliance with current legislation requirements and objectives and associated targets for preparations for upcoming legislation.

The investment manager should determine and disclose the level of disclosure for the vehicle with respect to the regulatory requirements that it is subject to (considering the regulatory requirements, such as, SFDR Article 6, 7, 8, 9, 11 and EU Taxonomy regulation).

The investment manager should describe and explain whether the vehicle is obligated to report under SFDR and if so whether its investment strategy meets the requirements.

Annual

The investment manager should provide an adequate summary and current status of the principal ESG risks faced by the vehicle as part of their overall risk- related disclosures.

Principal risks may cover, among others, areas specified in ESG15 of the inrev-guidelines">Sustainability module.

Annual

The investment manager should disclose whether any ESG information reported has been verified or assured by a third-party.

If certain ESG data included in periodic reports have been externally verified or assured this should be disclosed and a link or reference to the external assurance report(s) or assurance statement(s) should be provided.

Annual

In addition to its overall obligations to report to investors a set of essential key performance indicators (RG73), the investment manager may consider and report a recommended set of performance measures relevant to the ESG objectives and associated targets set for the vehicle.

As well as complying with RG73, the investment manager may consider and report additional key performance indicators in accordance with the ESG objectives of the vehicle – see list of recommended KPIs for real estate investments in Appendix 1. Reference may be made to ESG factors covered in Table 1 of ESG02.

If the investment manager chooses to adopt the recommended disclosures, either at vehicle or asset level, data coverage, disclosures and explanations should follow the general and specific calculation requirements described under RG73.

Annual