The Fund provides investors with access to investment in listed real estate, primarily Real Estate Investment Trusts (REITs), listed on share markets around the world. Securities in which the Fund invests are diversified across a range of asset classes, property sectors and geographic regions, focusing on investments in Europe,the Americas and Asia Pacific.
We are of the belief that real estate securities supported by a sustainable, well governed, business model and high-quality assets will outperform over the long-term. Environmental, social and governance (ESG) considerations are a central component to our portfolio construction and quality driven investment process. ESG considerations are directly addressed as part of the first stage (quality) of our three stage bottom-up process and will ultimately determine the size or how investible any position is.
Within listed equities, AMP Capital uses a number of approaches to incorporate ESG considerations into the investment process. ESG integration is facilitated through a dedicated in-house ESG research team which undertakes analysis of ESG issues for the benefit of the various investment teams and styles. For Quant based funds, ESG information (research) is integrated via numerical ESG scores which are used to monitor ESG risk of the portfolios relative to the appropriate index. For the Australian Fundamental Equities portfolios, ESG is integrated into the stock selection process again through numerical ESG scores, providing a positive ESG bias relative to the relevant index. Qualitative ESG information is also considered by company analysts in developing company value (or Target Price) and call conviction. For AMP Capital’s both Global Listed Real Estate strategy and Global Listed Infrastructure strategy, the stock ranking system incorporates specific ESG performance criteria.
The ESG company analysis which translates to an ESG score involves researching the following intangible drivers:
> Employee Rights
> Health & Safety
> Employee Conditions
> Employee Development
> Shareholders/Value Chain
> Corporate Governance
> Codes of Conduct and Policies
> Commitment to Sustainability
> Value Chain Management
> Human Rights
> Product Life Cycle and Design
> Resource Use
> Community Involvement
> Community Investment
> Cultural Considerations
> Public reporting
The following sustainability drivers are also factored into the analysis and include competitive environment, externalities, industry growth and risk factors e.g. technology, regulatory, consumer and demographic changes, resource constraints, climate change.
RIAA has received written undertaking from product issuer to update ESG-crtieria, assessed as part of certification, either at:
- Next roll of product collateral, Internal policy update and/or
- Next reporting/disclosure cycle