Our approach to sustainable investing
The real estate sector faces significant transition risks as economies decarbonise. Real estate owners and operators carry the responsibility to urgently identify, understand, manage and mitigate environmental, social and economic impacts, and to act proactively.
Investing in sustainability accelerates and drives long-term value creation, mitigates risk, enhances returns to our investors and makes our real estate more attractive. Taking into consideration ESG factors lead to stronger long-term economic performance for all our stakeholders and generate broader environmental and social benefits. We believe that strong sustainability management is directly linked to the long-term success of our business and the investments we make.
Sustainability criteria and relevant environmental, social and governance factors are deeply rooted in Grace’s business strategy, core values and culture. ESG factors are integrated throughout the investment life cycle and in our daily work to drive performance and sustainable innovation, and to reduce long-term costs.
Grace applies international sustainability frameworks and standards.
Grace is committed to:
Our sustainability work and strategy are focused on the areas where we can make the biggest impact as an investment manager specialised in enhancing and transforming underutilised assets into institutional-grade products. Our focus areas are set out below.
Green transition
Grace implements a comprehensive, ESG-led value-add asset management program to realise the assets available potential. The program concentrates on repositioning, targeted modernisation/refurbishment, energy transition and proptech lettings and property management solutions. The program comprises the building, the apartments and the outdoor environment. Each property and apartment has its own individual business plan formulated with value enhancements, optimisation measures and sustainability targets. The program is crafted to enhance each building’s and apartment’s energy-efficiency and reduce its carbon footprint over its full life cycle. The program reduces utility costs, lowers maintenance costs and improves operational efficiency, contributing to stronger financial performance and improved property value.
Example of focus areas in the program are energy and water conservation, heating controls, waste management, renewable energy, circular models and sustainable material and innovation.
The energy transition strategy is broken down in pre-study and risk assessments, energy efficiency targets, implementation of transition and improvements, performance benchmarking and achieved quantifiable performance improvements.
Every apartment is assessed and modelled to identify opportunities for reducing energy consumption, enhancing energy management and achieving optimal operational efficiency. The apartment’s energy consumption, sources, systems and equipment are examined in detail. The program displays detailed impact and alternative options that making each improvement would have on the overall energy performance. Return on investment potential is assessed for every apartment.
Grace has set ambitious 2030 targets for reduction of Scope 1, 2 and 3 emissions.
Human capital development and engagement with employees, tenants, supply chain and community
We focus on the defensive and affordable mid-market rental segments where the demand-supply imbalance is most acute and where there is a chronic shortage of affordable homes. We provide increased access to better quality, energy-performing and sustainable homes for a wide range of people, levels of affordability and life-stages. We support a diverse demographic profile and the creation of sustainable neighborhoods.
Everyone has a role to play in social value creation. We are committed to working with stakeholders and residents to improve our homes and communities and generate value to society. We are committed to support local employment, local suppliers and pursuing a green and sustainable agenda.
Key focus areas of our work include:
Upholding robust standards of governance
We are committed to the highest standard of corporate governance. Our governance practices serve as the foundation for our business operations. Effective governance is essential to ensuring sustainable business operations, maintaining investor confidence and ultimately achieving long-term profitability and value creation.
ESG factors are systematically incorporated into our management structures and when we evaluate risks and value creation opportunities throughout the investment process.
Grace’s due diligence sustainability protocol includes detailed assessments of sustainability criteria to ensure the investment aligns with the group’s sustainability criteria, including decarbonisation and transition risks and value creation opportunities. A comprehensive post-acquisition transition/sustainability and value creation plan is developed based on analysis of the asset’s current performance, planned measures and investments, and anticipated future performance. We make high demands for good ethics and business integrity from our suppliers, service providers and contractors.
Grace operates as an owner with a long-term perspective considering ESG responsibilities when making business decisions and when managing the company’s resources. Grace’s Board of Directors is responsible for defining, supervising and implementing the group’s Sustainability Strategy. Grace’s Sustainability Committee has delegated authority to integrate ESG into operations.
Key focus areas of our policies are to provide transparency to investors and other key stakeholders, comply with laws and maintain a high standard of operating integrity and ethics in business practices. Our policies also include human rights, anti-corruption and bribery, data privacy, cybersecurity and AML.