Responsible Property Investment 2008 - Henderson Global Investors

2008 report Responsible Property Investment
4
Henderson’s Sustainability Portfolio Analysis
ASSESSING THE SUSTAINABILITY PERFORMANCE AND RISK EXPOSURE OF OUR PORTFOLIO
Our major endeavour in 2008 was to undertake a
detailed survey of all the environmental and socioeconomic
features of the properties in eight of our
funds and assess their exposure to sustainabilityrelated
risks.
We developed and carried out an extensive Sustainability
Portfolio Analysis (SPA), enabling us to identify areas of risk
and opportunity at both a property and fund level. We now
have risk profiles for each fund and detailed property
improvement plans, which will inform our fund strategies
for 2009.
• 161 properties took part, each answering 78
questions contained in the Henderson SPA audit
• 97% of the properties (156 sites) were visited
and assessed during the process
Risk Mapping and Benchmarking
Alongside the SPA process, Henderson took part in Upstream
Sustainability Services’ The Third Dimension for the third
consecutive year. As well as contributing to industry research
into the link between sustainability and investment
performance, this enabled us to compare the sustainability
risk exposure of our funds to that of the 2008 syndicate of
12 major property investors comprising 1500 properties. 45
funds took part in the benchmarking, whereby five out of
eight Henderson funds demonstrated above-average
sustainability performance:
Total Weighted Sustainability Score
80%
70%
60%
50%
40%
30%
20%
10%
0%
Henderson Funds
The Third Dimension Syndicate Funds
SPA - Environment
We believe that it is our responsibility to reduce our carbon
footprint and manage those impacts which contribute to
climate change, as well as ensuring that our property
portfolio is capable of adapting to predicted changes in
weather patterns such as heavier rain, increased flooding,
hotter summers and drought. Financial considerations such
as rising energy costs and landfill tax have also encouraged
us to address utilities consumption and waste management.
Other key climate change and environmental issues
examined through SPA included pollution, biodiversity,
weathering, transport, hazardous waste, passive design,
water use and renewables.
Environmental topics comprised a significant proportion of
our questionnaire and we now have a comprehensive
picture of the activities and features already in place across
our portfolio. SPA has also identified those properties at
highest risk and with greatest potential for improvement, so
we can work together with our property managers to
concentrate our efforts on those key areas.
• 21% of our multi-let properties provide recycling
facilities for the tenants
• 69% of our multi-let properties are undertaking
energy reduction measures
• 45% of the properties analysed encourage cycling
Risk can arise from three broad sources:
• Legislative – risks that arise from liabilities under
current and forthcoming legislation such as the
UK Climate Change Act, Carbon Reduction
Commitment and European Performance of
Buildings Directive, which could lead to increased
obsolescence and greater financial burden.
• Operational – risks that can potentially affect a
building’s ability to operate effectively in the
changing market and climate, using resources
efficiently whilst attracting, retaining and
providing comfort for occupiers.
• Reputational – risks encompassing the
reputational consequences for a landlord or
particular property of a well-publicised
environmental or social incident, which could
affect Henderson’s aim to be a landlord of choice
for occupiers and investors.
SPA has helped us to establish which of our assets need our special attention so that,
with the help of our property managers, our funds can work towards generating
optimal performance combined with a strong sustainability profile
Ainslie McLennan, Director of Property and Fund Manager