Responsible investing

Environmental, Social and Governance (“ESG”) Engagement

Subject to the exception below, the management of the Company’s investments is not undertaken with any specific instructions to exclude certain asset types or classes, the Investment Manager embeds ESG into the research of each asset class as part of the investment process. ESG investment is about active engagement, in the belief that the performance of assets held around the world can be improved over the longer term.

ESG and Asset Management

The Company believes that comprehensive assessment of ESG factors leads to better outcomes for shareholders and adopts the Investment Manager's policy and approach to integrating ESG.

The Investment Manager has identified a range of key forces for change comprising Environment & Climate, Governance & Engagement, Demographics and Technology & Infrastructure. These four forces naturally encompass a diverse range of topics and concerns and our Investment Manager has translated and codified these into its investment approach, while also aligning them to the UN Sustainable Development Goals. It believes that these forces will shape the future and, in turn, shape our long-term approach by guiding how ESG factors are prioritised at the Company and asset level.

The current portfolio has strong ESG credentials and more can be found below. Asset management is essential for preserving and adding value to the portfolio and ultimately for shareholders. Our Investment Manager has a team of people in Europe working with tenants and real estate experts as we see opportunities to not only improve buildings and add a better working environment but to also extend where the footprint allows. Meung sur Loire and Waddinxveen are two examples where there are opportunities to add value and where the team on the ground has been discussing options to seek to enhance size and potential value.

ESG and the Investment Manager's strategy to reach Zero Carbon emissions

Environmental, Social and Governance (ESG) is a key area of focus for the Investment Manager. Since the signing of the Paris Treaty on climate change in 2015, we have recognised an increased ESG awareness amongst governments, investors and also tenants in the logistics sector. Together with our dedicated ESG team we remain very proactive in driving our ESG agenda, in order to protect the property values of our buildings by ensuring their current and future appeal. Our current rating is strong and reflected in the four Green Stars awarded, out of a maximum of five, in the 2021 submission for the Global Real Estate Sustainability Benchmark assessment (GRESB). We were awarded Regional Sector Leader status and achieved a score of 84/100 representing an improvement on our 79/100 points for the portfolio last year. This also compares favourably versus the 64/100 average peer score and 73/100 overall average 2021 GRESB score.

We are also making good progress with our appointed adviser, Verco, helping to define a pathway to a Net Zero Carbon emissions target and which we hope to update investors on in the future. This will help to define asset-level strategies. Other ESG projects that we are concentrating on are BREEAM-in-use certification, a pilot for advanced smart metering and the installation of solar panels. In Q2 2021, the Company completed the signing of two roof leases for solar panel projects in the Netherlands, at Den Hoorn and Ede, both with a 20 year duration. These will generate a total income stream of c.€100,000 per year and a c.€1.0 million capital uplift. The reviews of options for assets that do not have such panels are ongoing. With our local teams we are building on our close relationships with our tenants and seeking to understand how we can service them best.

For more information on how ESG factors are embedded in investment decision-making across abrdn, please click here (this link will exit the current website).

Risk warning
Risk warning
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. Please refer to the relevant Key Information Document (KID) prior to making an investment decision. Please be aware of scams that can affect investors.