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GRESB Results | Copenhagen

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September 30, 2019

Hosted by Klinkby Enge

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GRESB Results | Copenhagen

  1. 1. Agenda ⟩ 09:00: Welcome & introduction | Anders Klinkby, Managing Partner, Klinkby Enge ⟩ 09:05: Introduction to GRESB & Real Estate Results | Josien Piek, GRESB ⟩ 09:20: PFA case study | Andreas Stang, Senior Portfolio Manager and Head of ESG, PFA ⟩ 09:35: CIP case study | Carlisle White, ESG and Compliance Officer, CIP ⟩ 09:50: 2019 GRESB Infrastructure Results | Rick Walters, Head of Infrastructure, GRESB ⟩ 10:10: Automating ESG data reporting for real estate | Sara Anzinger, SVP, Measurabl ⟩ 10:25: Closing remarks | Anders Klinkby, Managing Partner, Klinkby Enge ⟩ 10:30: Networking & coffee
  2. 2. Investors GRESB Managers I N VESTOR P E RSPE CTI VE E S G A N AL YTIC S E S G A N AL YTIC S E S G P E RFO RMANC E D A T A GRESB – Real Asset Sustainability Data and Benchmarking Investor-led, mission-driven, global by-the-industry-for-the-industry initiative
  3. 3. Institutional Investor Members Over 100 institutional investor members 5
  4. 4. GRESB Competencies Validation Objective Scoring Peer Benchmarking
  5. 5. Real Estate 2019 Coverage USD 4.1 trillion RE Assets Reported 38,274 53,015 8,703 1,089 2,107 # assets AMERICAS EUROPE ASIA OCEANIA AFRICA OTHER
  6. 6. Real Estate Annual score improvement
  7. 7. Peer-benchmarking: Regional Scores 2019
  8. 8. Peer-benchmarking: Country scores – Europe 2019
  9. 9. Next steps: Asset level disclosure and full data coverage +100,000 +66,000 +25,000 2019 # assets All assets Assets • Reported at asset-level Assets • Reported at asset-level • With full data coverage • Excluding outliers
  10. 10. EUROPE GLOBAL Calculating Energy Intensities & Environmental Impact
  11. 11. Decarbonization pathways (1.5°C)
  12. 12. DK – Decarbonization pathways (1.5°C)
  13. 13. 16 - Institutional investors - Asset managers - Industry associations - Asset managers - REITs - Service providers - Data providers Reporting framework Benchmarking tool ESG performance Assessment Engagement tool Governance Structure: Stakeholder feedback loop REAL ESTATE Benchmark Committee INFRASTRUCTURE Benchmark Committee
  14. 14. - Strategy & Leadership - Policies - Reporting - Risk Management - Stakeholder Engagement - Risks & Opportunities - Monitoring - Performance Indicators - Energy - GHG emissions - Water - Waste Alignment of ESG Standards: limiting the reporting burden - Targets - Building Certifications - Tenants - Community Engagement
  15. 15. Assessments: Modular Structure
  16. 16. Sustainable Real Assets
  17. 17. 30-Sep-2019 ESG in Infrastructure Andreas Stang – Head of ESG
  18. 18. PFA is the largest commercial pension fund in Denmark and 7th largest in the EU (IPE 2018) 1917 PFA established 80 bn EUR Assets under Management 2019 1.300 FTEs 1,3 m BtC customers 6 k BtB customers 21
  19. 19. 22 Danish Pension Funds commitment of $50bn in new green investments by 2030 Source: Forsikring og Pension, Fact sheet on green investments TODAY $19BN In green investment, and further 5$bn in reserved funds for green projects IN 2030 +$50BN In new green investments
  20. 20. No Lack of Data • Sustainability reports Lack of Raw ESG data • Quality • Consistency Avoid Green Washing • How to capture the negative side Communication • How do we get the message to our end beneficiary 23 Our Approach & Ambition
  21. 21. 24 ESG Data DATA REMOVED DATA REMOVED
  22. 22. Investor led initiative Access to existing infrastructure funds Already established data structure 25 Why GRESB
  23. 23. 26 Perspectives and The Future Usecase GRESB data downloader ESG performance metrics Benchmark comparison of ESG risks and performance Source: GRESB database DATA REMOVED
  24. 24. 27 Perspectives and The Future Usecase
  25. 25. Only the right/intended addressees are allowed to access and read this document. This document may contain confidential information and shall not be disclosed to any third party, referred to or published without CIP’s prior written approval. Introduction to ESG within Copenhagen Infrastructure Partners Perspectives on ESG data September 2019 GRESB Results Event Copenhagen
  26. 26. ▪ Fundraising ongoing following First Close in Q2 2019 ▪ Focus on renewable energy investments primarily in Asia and Latin America ▪ Investor base now comprising group of prominent Nordic institutional investors ▪ Strong position established in the US solar and onshore wind market ▪ EUR 1.4bn1 committed in less than two years ▪ Offshore Wind, Onshore wind, Biomass and Transmission investments in Northwestern Europe The history of CIP - Significant growth in a short period of time ▪ Invention of new investment product making utility scale energy projects accessible to financial investors 1 Including CI Artemis (appendix fund to CI I) 2 Source: Infrastructure Investor, PEI Media 29 2012: Establishment of CIP 2012-2014: CI I (first fund) 2019: CI New Markets Fund (fourth fund) ▪ Pioneering offshore wind, responsible for delivering some of the largest projects in the world 2012: DONG Energy (now Ørsted) 2014-2016: CI II (second fund) ▪ Largest renewable energy fund ever raised2 ▪ Presence in four continents (Europe, North America, Asia, Australia) 2017-2018: CI III (third fund) Team of 4 Team of 15 Team of 30 Team of 80 Team of 90
  27. 27. 30 CIP: Investments and development projects - Geographical location of CI I, CI Artemis, CI II and CIII projects ~1.7 GW Onshore wind~9 GW Offshore wind ~28 MW Geothermal~600 MW Solar ~300 MW Biomass and waste-to-energy Transmission 30
  28. 28. Veja Mate Offshore Wind Farm - First turbine installed and first power generated in January 2017 (2 months ahead of schedule) 31
  29. 29. Brigg Renewable Energy Plant - Commercial operation since January 2016 Boiler building Straw moisture testBottom ash disposal Brigg Renewable Energy Plant 32
  30. 30. Fluvanna I Onshore Wind Farm - Construction and commissioning Nacelle offloading, May 2017 Picking a Blade for Rotor Assembly, July 2017 Setting a base at 72 meters, July 2017 Rotor installation, July 2017 Commissioning, September 2017 33
  31. 31. Types of ESG data that CIP works with 34 ▪ Environmental permits: - Which permits - Conditions - Breaches ▪ Environmental incidents e.g. oil spills ▪ Involvement of environmental authorities ▪ Emissions to air, soil, water e.g. NOx, Sox for biomass ▪ Property damage e.g. damage to vehicles, fencing ▪ Renewable energy generated and CO2 emissions avoided ▪ Track record of joint venture partners ▪ Any litigation, arbitration or legal disputes affecting the an investee company ▪ Any regulatory involvement by authorities ▪ Health and safety data e.g lost time injuries ▪ Number of employees and manhours worked ▪ Involvement of occupational H&S authorities ▪ Material interactions with local communities ▪ Households powered with renewable energy Social data (selected examples) Governance data (selected examples)Environmental data (selected examples)
  32. 32. CIP needs ESG data throughout the investment process - ESG data can help CIP to achieve its objective of creating long-term, sustainable value for investors 35 Notes: 1) Each project will vary significantly and certain pieces of ESG data may or may not be relevant for particular projects . Key ESG data1 CIP’s primary role Investment opportunity screening / selection Project development and due diligence Asset management during construction Asset management during operations InvestmentCommittee‘go/nogo’ InvestmentCommitteeapproval INVESTMENT DIVESTMENT Monitoring and enforcing ESG standards ▪ Integrity track-record of potential investee company (G) ▪ Presence and conditions of environmental permits (E) ▪ Scope of obligations on suppliers to manage and report on HSE issues (both E and S) ▪ Findings of environmental and other studies (E) ▪ Relationship between community and project (S) ▪ Health and safety data (S) ▪ Environmental monitoring and incidents (E) ▪ Involvement of authorities (can be E, S or G) ▪ Material interactions with local communities (S) ▪ Ad hoc incidents regarding actions of suppliers (e.g. a breach of permit, an allegation of illegal activity) (can be E, S or G) CIP’s investment process Actively driving the ESG agenda
  33. 33. Case example: Veja Mate Offshore Wind Farm - Using ESG data to improve performance and create sustainable value 36 Source: CIP analysis Installation of ‘double bubble curtains’ to mitigate noise during construction ▪ Operational 402MW offshore wind farm located in the German North Sea ▪ Very large monopile foundations were used during construction → potential noise issues ▪ Advanced noise monitoring measures revealed a need to lower noise emissions to comply with regulatory caps ▪ A key supplier was engaged to install “double bubble curtains” on top of other mitigation measures ▪ CIP closely involved through Asset Management contact with the project company and representation on project Steering Committee and Board ▪ German maritime agencies were informed on a daily basis about noise reduction efforts → foundations ultimately installed within regulatory limits Turbine foundation 20 permanent jobs Reductions of ~800,000t p.a. Green power for eq. ~500,000 homes CO2
  34. 34. CIP also chooses to report ESG data its investors - In 2018, CIP produced its first annual ESG Report for investors 37
  35. 35. ESG Initiatives at CIP - CIP is developing ESG dashboards, which can easily provide fund, asset, geographical and other overviews 38 ILLUSTRATIVE
  36. 36. Becoming a member of GRESB - CIP became a member of GRESB in mid-2019, primarily to learn and connect with industry 39 ▪ Understand areas presenting portfolio ESG risk ▪ Detect opportunities for ESG improvement ▪ Not focused on a particular score – more on themes that emerge Understand risks and opportunities Driver for joining Comment ▪ Improve investor engagement and discussion about ESG topics ▪ Relationship building with project parties, as it can share knowledge from other projects Assist engagement with investors and projects ▪ Understand what other infra fund managers are doing ▪ See trends in other respondents’ answers Identify industry best practices 4 51 2 ▪ CIP reports as a non-member 2018 ▪ CIP becomes a member and reports for funds and 3 assets 2019 ▪ CIP increases the number of assets and the quality of reporting 2020 ▪ CIP continues to increase reporting volume and quality 2021+
  37. 37. Reporting to GRESB – CIP experiences and perspectives 40 ▪ The themes that sit below the score are what helps build a more mature ESG framework It is not just about the ‘score’ Theme Comment ▪ Not easy to compare infrastructure assets across countries, technologies and asset classes – ok if a particular data point might not ‘fit’ a particular asset – ‘Private companies’ disclosures on sustainability-related data are rarely standardized…[a]s a result, data on sustainability in private equity investments remains scattered’ – EU Technical Expert Group on Sustainable Finance, ‘Technical Report on EU taxonomy’, June 2019 One size ESG reporting might not ‘fit all’ ▪ CIP will primarily use GRESB as an internal tool to measure ‘itself against itself’ Focus on trying to improve year-on- year ▪ Different companies have different resources and different abilities to report on ESG ▪ All of us want to see ESG reporting grow so it is far better to be inclusive, collaborative and to promote disclosure – no matter how much of a ‘beginner’ or ‘expert’ your company is Reporting is step in the right direction
  38. 38. Copenhagen Infrastructure Partners Langelinie Allé 43 DK-2100 Copenhagen Ø Denmark +45 7070 5151 www.cip.dk 41
  39. 39. FUND ASSESSMENT ASSET ASSESSMENT WEIGHTED ASSET SCORE FUND ASSESSMENT SCORE GRESB FUND SCORE Funds with ≥25% asset participation 30% 70% Two Complimentary Assessments
  40. 40. 10 Years of GRESB
  41. 41. 2009 Assesses the ESG performance of property companies, fund managers and developers Combined, GRESB represents over US$4 trillion in real asset value GRESB Reporting Framework Annual ESG Disclosure for Real Asset Portfolios 2016 Assesses the ESG performance of infrastructure assets and portfolios 2019
  42. 42. 10 years of impact # PARTICIPANTS 107 FUNDS 393 ASSETS
  43. 43. GRESB Infrastructure Membership Investor Members >100 Institutional Investor Members, representing >$22 trillion Pension funds, insurance companies, sovereign wealth funds
  44. 44. 2019 Results
  45. 45. Total 2019 GAV $471bn
  46. 46. Sustainable Investment Strategies From Negative Screening to Positive Selection
  47. 47. Assets
  48. 48. Performance Indicators
  49. 49. Intensity Reporting (per Output)
  50. 50. Short-Term Targets
  51. 51. Carbon Intensity by Sector
  52. 52. Carbon Intensity by Asset 0,00 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 Carbonintensity/output (tCO2e/MWh) Coal and diesel Open cycle gas turbine Closed cycle gas turbine Draft EU Taxonomy Threshold
  53. 53. Resilience
  54. 54. Public Disclosure
  55. 55. Looking Towards 2020
  56. 56. Assessment Structure MANAGEMENT COMPONENT Asset Level PERFORMANCE COMPONENT Asset Level ASSET ASSESSMENT MANAGEMENT COMPONENT Asset Level PERFORMANCE COMPONENT Asset Level ASSET ASSESSMENT ASSET ASSESSMENT MANAGEMENT COMPONENT Asset Level PERFORMANCE COMPONENT Asset Level FUND MANAGEMENT 30% Organizational Level FUND ASSESSMENT PERFORMANCE 70% Aggregated Asset Assessments
  57. 57. SECTOR LEADERS - FUNDS Oceania Focused Sector Diversified Europe Focused Renewable Power America Focused Globally Diversified Asia Focused
  58. 58. SECTOR LEADERS - ASSETS UDICITE Gestión Integral de Hospitales de Zumpango, S.A.P.I. de C.V. Operadora de Infraestructura Especializada de Guanajuato, S.A.P.I. de C.V. Associated British Airports Port Companies Airport Companies Data Infrastructure Health & Social Care Transport Other Social Infrastructure Network Utilities Energy and Water Resources Diversified and Other Environmental Services Solar Power Education Services Renewable Power Power Generation
  59. 59. Automating ESG Data for Real Estate
  60. 60. Katherine Sherwin Director, Health Research BlackRock Kelia Cowan Marketing Program Manager Measurabl Speakers
  61. 61. ESG Reporting ● No universal, mandatory reporting standard, but gradual convergence is occurring
  62. 62. Capital Markets Transactions Recent real estate sector transactions Sustainability- Linked Loans Green Bonds Green Loans
  63. 63. Reporting Financial Service Providers Real Estate Owner Utilities Projects Business Systems Travel Regulation Social Goal Tracking Beginning of ESG Journey
  64. 64. Reporting Financial Service Providers Real Estate Owner Utilities Projects Business Systems Travel Regulation Social Goal Tracking Best Practice Data Management System
  65. 65. Data Quality Spectrum ● Best Practice ○ ds to GRESB Accuracy Completeness Timeliness Lineage Good Practice Better
  66. 66. Case Study 2018 ● > 1400 sites ● 191M sq. ft. ● Measurabl is ESG platform for their global teams ● +400new sites ● Global engagement ○ Property Managers leveraging Measurabl exports for their quarterly ○ Investment-grade ESG data stored in Measurabl ○ 16 funds to GRESB ● Launched Measurabl Engagement: ○ Data management ○ 3 funds to GRESB 2017 2019 ● Expanded relationship across business. ● Introduced utility automation ● Global engagement ○ Deeper use of Measurabl platform ○ Rollout to broader audience for portfolio management (projects, ratings, benchmarking, reporting) ○ 10 funds to GRESB *One of the world's leading real asset investment managers experience with Measurabl
  67. 67. ©2018 Measurabl, Inc. measurabl.com 01 Contact Marc Rehberger Senior Vice President, Sales Measurabl San Diego, CA +1 (714) 401-9455 marc@measurabl.com 7 8 Sara Anzinger Senior Vice President, Capital Markets Measurabl New York, NY +1 (619) 732-0828 sara.anzinger@measurabl.com

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