Picton Property Income Limited Sustainability Report 2022
Introduction
09
Environmental Focus
Stakeholder Engagement
Governance
Appendix
Global trends driving sustainability continued
Social value There is growing significance being placed on the ‘S’ in ESG. Public expectations have increased when it comes to the level of transparency required into a company’s wider impacts on society and its surroundings. Social value as an umbrella term can encompass a wide variety of topics and the relevance and meaning of social value differs from industry to industry. At a basic level one might expect to find company policies covering modern slavery, equal pay and Health & Safety.
Financial impact of sustainability Environmental, Social and Governance factors are becoming intrinsically entwined in property values. Particularly during property acquisition due diligence, considerations like EPC ratings, TCFD risk analysis and building accreditations are evaluated and can result in a ‘green premium’ or ‘brown discount’ and potentially even stranded assets. At a company level, corporate ESG ratings are produced largely based on ESG public disclosures. It is therefore vital to be fully transparent and maintain and publish comprehensive and up-to-date corporate policies covering all areas of ESG. Failure to do so can result in poor corporate ESG ratings and impact investor sentiment. Reporting must go beyond climate change and emissions to cover areas such as social value, biodiversity and equality diversity and inclusion. There is clearly a cost of implementing ESG initiatives but there is also an opportunity to add value. This can be to properties through increased rents and capital values and lower operating expenses, and at company level, through improved brand perception.
A further developed and more sophisticated understanding of current issues is a key differentiator. For example, equality diversity and inclusion policies which reach beyond the gender pay gap to cover gender identity, race, disability and neurodiversity. Companies must demonstrate action beyond policies and statements of intention; how they invest in people and communities, share resources, support vulnerable groups, and promote equality and inclusion.
Read more on our response on pages 25–33
Powered by FlippingBook