UK Commercial Property REIT: Kepler research note
The note provides an update on the Trust’s portfolio, gearing, performance, dividend, charges and environmental, social and governance (ESG) considerations.
The Company adopts the Investment Manager’s policy and approach to integrating ESG and this has been used as the basis for establishing the Company’s ESG objectives. The Investment Manager and Board view ESG as a fundamental part of their business.
Whilst real estate investment provides valuable economic benefits and returns for investors it has – by its nature – the potential to affect environmental and social outcomes, both positively and negatively.
The Investment Manager’s approach is underpinned by the following three over-arching principles:
A key element of the Investment Manager’s approach is the employment of its ESG Impact Dial which is a proprietary research framework supporting investment strategies and asset management.
Four major themes have been identified and provide the basis of the Dial – Environment & Climate, Governance & Engagement, Demographics and Technology & Infrastructure. Together with the Dial’s scoring system, assessing each asset based on its ESG characteristics across 21 indicators, these provide a framework against which the Company can set its ESG objectives and monitor progress over time, as well as guiding the assessment of materiality.
Of particular focus is responding to climate change, both in terms of resilience to climate impacts and in reducing emissions from the Company’s activities. The Company has recently announced its pathway to achieving Net Zero Carbon following work completed in 2021:
Scopes 1 and 2 cover emissions that directly result from the landlord’s activities where there is operational control, either through the purchase and consumption of energy or refrigerant losses.
Scope 3 emissions are those that occur in our supply chains and downstream leased assets (tenant spaces) over which we have a degree of influence but limited control.
Please see pages 22 to 27 of the annual report for more information.