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2020 GRESB Real Estate & Infrastructure Results - Nordics

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2020 GRESB Real Estate & Infrastructure Results - Nordics

  1. 1. 2 PROGRAM • Welcome & Introduction| Josien Piek, Head of EMEA, GRESB & Bengt Enge, Partner, Klinkby Enge • GRESB Real Estate Results & developments in the Nordic region | Roxana Isaiu, Director Real Estate, GRESB • GRESB Infrastructure Results & developments in the Nordic region | Rick Walters, Director Infrastructure, GRESB • Panel Discussion: EU Taxonomy analysis of infrastructure and real estate assets • Moderator: Rick Walters, Director Infrastructure, GRESB • Anders Klinkby, Managing Partner, Klinkby Enge • Closing remarks
  2. 2. 3 Investor-Led Growth
  3. 3. 4 Regional Participation +22%
  4. 4. 5 50 participants from the Nordics
  5. 5. 6 Participation 1,229 +96 k USD 4.8 tn Breakdown by region
  6. 6. 7 2020 RESULTS
  7. 7. 8 GRESB Model Regional scores comparison Asia Oceania MANAGEMENT PERFORMANCE Nordics
  8. 8. 9 GRESB Model Country Scores Comparison
  9. 9. 10 Impact of Change Contribution analysis
  10. 10. 11 Energy intensities 0 50 100 150 200 250 300 Retail Office Hotel Industrial Denmark Finland Norway Sweden Europe KWh/m2 31 124 44 149 1938 49 140 91 600 3043 5 17 16 42 633 16 84 12 303 2488
  11. 11. 12 LFL reductions -3,6 -4,6 -2,6 -6,6 -3,3 -7,3 -4,9 -3,9 -3,2 -4,4 Denmark Finland Norway Sweden Europe
  12. 12. 13 KEY ESG TRENDS
  13. 13. 14 Resilience & Regulation 121 238 412 Americas Europe Asia Oceania % participants 13% 24% 34% 2018 2019 2020
  14. 14. 15 WHAT’S NEXT?
  15. 15. 16 Granularity Reliability Quality control Error detection Normalisation Asset-level benchmarking Scoring of true performance Local and global targets Data Availability Performance Insights Benchmarking 2.0 Data Quality From data availability to scoring performance outcomes Transitioning to Performance • Granularity • Reliability • Quality control • Error detection • Normalisation • Asset-level benchmarking • Scoring performance outcomes • Local, regional and global targets
  16. 16. 17 Stronger governance Rooted into deeper industry involvement and collective effort for transparency Independent standard setter Mission driven Investor led By industry, for industry Formalised by year-end Independent benchmarking organisation Future B-Corp Mission driven ….. GRESB Foundation GRESB BV
  17. 17. 18 Industry collaboration Collective problems require collective action December 2020 • Kick off discussions on impact of COVID on building performance • Industry working group Data Providers • Industry working group Institutional Investors Q1, 2021 • Draft roadmap for defining, measuring and benchmarking performance • Industry working group for feedback and discussion of Assessment and benchmarking methodology for Residential portfolios • Engagement on integration of Climate Risk and Resilience into the GRESB Assessments
  18. 18. 19 SECTOR LEADERS
  19. 19. 3 Sector Leaders – Europe
  20. 20. 1 INFRASTRUCTURE
  21. 21. 2 Assessment Structure
  22. 22. 3 PARTICIPATION 5 Years of GRESB Infra
  23. 23. 4 Fund – Region Participation
  24. 24. 5 Asset – Sector Participation
  25. 25. 6 SCORES
  26. 26. 7 Regional Scores and GAV
  27. 27. 8 Fund Model (Component Scores)
  28. 28. 9 Fund Model - Europe
  29. 29. 10 Asset Model (Component Scores)
  30. 30. 11 Asset Model - Nordics
  31. 31. 12 Asset Model - Regional
  32. 32. 13 Asset Sectors
  33. 33. 14 PERFORMANCE
  34. 34. 15 Performance: Reporting & Targets
  35. 35. 16 PUBLIC DISCLOSURE
  36. 36. 17 Regional Participation and Scores
  37. 37. 18 LOOKING AHEAD
  38. 38. 19 Proposed Changes for 2021 Fund • No major changes Asset –Management Component • No major changes • External ESG controversy data for scoring of ESG incident occurrences Asset –Performance Component • Improvements to the Performance Component indicator tables to further simplify and clarify reporting requirements • Take steps towards Performance scoring Asset –Development Component • New Component to more specifically address assets (projects) in development Data Quality • Automatic real-time outlier checks in the portal to reduce the potential for errors and enhance data quality Live scoring • Draft scoring live in the portal to increase transparency, reduce potential for errors and provide immediate feedback to participants.
  39. 39. 20 SECTOR LEADERS
  40. 40. 21 Sector Leaders - Funds Most Improved - Funds • Sectorally diversified • Sector specific excluding Renewables; • Europe • Renewable Power Generation; • Americas Asia and Oceania Globally diversified • Sectorally diversified; • Europe; • Other region (Americas, Asia or Oceania) Globally diversified Sector specific
  41. 41. 22 Sector Leaders - Assets MHL Supply Networks (Asia) Limited Crook Hill & Reaps Moss Amey Belfast School Partnership PFI Co Limited UDICITE Data Infrastructure Diversified Energy and Water Resources Environmental Services Network Utilities Other Power Generation x-Renewables Renewable Power Renewable Power Social Infrastructure Transport Solar Power Generation Water and Sewerage Companies Education Services Education Services Health and Social Care Services Airport Companies Port Companies Road Companies
  42. 42. 23 Most Improved - Assets Urbs ludex et Causidicus S.A. Desert Sunlight Projco (St. Andrews Hospital) Limited Network Utilities Diversified and Other (including Environmental Services) Data Infrastructure Power Generation x- Renewables Renewable Power Social Infrastructure Transport Wind Power Generation Health and Social Care Services Road Companies
  43. 43. 24 EU TAXONOMY
  44. 44. 25 Reg’s and Standards Converging?
  45. 45. 26 EU Taxonomy • Aims to encourage investment flows to companies engaged in or transitioning to more sustainable activities • Supports the EU to become carbon neutral by 2050 • Climate (mitigation and adaptation) covered initially but includes DNSH • Applies to financial market participants from 1/1/2022
  46. 46. 27 38 6 - - - 11 3 - - - 48 23 8 5 4 28 16 16 16 1 81 75 75 61 59 103 10 9 1 1 24 - - - - 77 - - - - 8 - - - - 8 - - - - 426 133 108 83 65 - 50 100 150 200 250 300 350 400 450 Total Taxonomy aligned Metric assessed Data reported Taxonomy compliant Data Infrastructure Environmental Services Network Utilities (Distribution) Power Generation x-Renewables Renewable Power Transport Energy and Water Resources Social Infrastructure Diversified Other GRESB Assets - EU-T Assessment
  47. 47. 28 38 6 - - - 11 3 - - - 48 23 8 5 4 28 16 16 16 1 81 75 75 61 59 103 10 9 1 1 24 - - - - 77 - - - - 8 - - - - 8 - - - - 426 133 108 83 65 - 50 100 150 200 250 300 350 400 450 Total Taxonomy aligned Metric assessed Data reported Taxonomy compliant Data Infrastructure Environmental Services Network Utilities (Distribution) Power Generation x-Renewables Renewable Power Transport Energy and Water Resources Social Infrastructure Diversified Other GRESB Assets - EU-T Assessment Not aligned 293 Metric not assess ed 25 Data not reported 25 Threshold not met 18 Taxonomy compliant 65
  48. 48. Practical experiences with EU Taxonomy assessments 26 November 2020 29
  49. 49. Basic process for applying the Taxonomy 30 1. Classify activities across the asset and align with taxonomy 2. Do they meet the substantial contribution criteria? 3. Are the Do No Significant Harm criteria met? 4. Are the Minimum Social Safeguards met? 5. How much of the asset/fund is aligned? 6. Prepare Disclosures Phase 1 Phase 2 Phase 3 EU Taxonomy for private assets
  50. 50. Basic process for applying the Taxonomy – phase 1 1. Classify activities across the asset and align with taxonomy Phase 1 1. Create a “taxonomy activity overview” for the asset • For activities/assets that are not covered by the taxonomy, consider developing a “non-taxonomy green/sustainable” framework Analysis framework for the asset is created 2. Create taxonomy assessment sheet for each activity for each site • Which environmental objective(s) should the “substantial contribution” assessment be made against? (1-6) • If there are multiple instances of the same activity at different sites, each should be assessed separately if possible (e.g. each building, or each datacenter) EU Taxonomy for private assets
  51. 51. Basic process for applying the Taxonomy – phase 2 2. – 4. Determine if the criteria for eligibility is met 2. – 4. Determine if the criteria for eligibility is met 1. Adapt the technical screening criteria to fit specific asset and determine relevant thresholds/benchmarks 2. Gather the data required according to specifications determined in previous step 3. Determine for each activity/site whether the activity is a) Taxonomy aligned (all criteria are deemed eligible for the activity/site) b) Potentially taxonomy aligned (Alignment is expected – but can not be documented in full) c) Not taxonomy aligned 4. For b and c, assess what is needed to achieve alignment, and whether it can be achieved within e.g. 5 years. 5. For c, consider if the activity/asset complies with your own “non-taxonomy sustainable” criteria. 6. Determine if the activity is “low carbon”, “transitional” or “enabling” (needed for fund disclosure) 7. If more than one activity/site is assessed, use revenue/turnover and capex to determine the percentage of alignment for the asset. Phase 2 The asset assessment is conducted for each asset EU Taxonomy for private assets
  52. 52. Basic process for applying the Taxonomy – phase 3 Phase 3 The fund/portfolio assessment is conducted and disclosed 1. Multiply Gross Asset Value per asset with the percent alignment calculated in the previous step • Taxonomy aligned revenue/capex • Potentially taxonomy aligned revenue/capex • Not taxonomy aligned revenue/capex 2. If relevant, split above into “low carbon”, “transitional” and “enabling” 5. – 6. Calculate portfolio alignment and prepare disclosure EU Taxonomy for private assets
  53. 53. 34 Main conclusions from work on EU Taxonomy assessments Based on the screening criteria it is possible to conduct a meaningful assessment in most cases Criteria are mostly clear What is needed for evidence is not well defined Draft Delegated Acts seem to improve general structure and clarity Data is not readily available Initially the problem sits with the investor The task of producing quality data will move to the asset level – over time Assets will typically be able to produce the data needed – if prioritized The assets need detailed guidance on what (and why) to deliver. This is new to them We expect alignment degrees to be low across most portfolios The EU Taxonomy sets the bar high for a reason – creating a net zero carbon economy in 2050 Strong focus on best-in-class energy efficiency Do No Significant Harm and Minimum Social Safeguard require structured documentation Process of trial and error and gradual learning. Benefit to get started early EU Taxonomy for private assets

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