Future proofing portfolios
Building climate resilience and developing a clear pathway to net zero carbon is a primary focus for our parent company, Swiss Life Asset Managers and for Mayfair Capital. Swiss Life Asset Managers is currently undertaking a project to define its pathway to net zero carbon, with Mayfair Capital and its portfolio a key part of this project.
Ultimately, successful implementation of a net zero carbon strategy requires comprehensive data and effective tools and processes for engaging, monitoring and addressing issues at the asset level. One of the most pressing industry-wide challenges is ESG data acquisition. Energy data, which is fundamentally important to understanding carbon performance, is often difficult to acquire due to the nature of the lease. This means that in portfolios with many FRI leases, there is no obligation on the tenant to share this data with their landlord. As a result, strong tenant and occupier engagement is vital, ensuring environmental and social issues can be managed effectively.
We have deliberately structured our Property Income Trust for Charities (PITCH) fund as a leaner portfolio, which allows for more intimate engagement with occupiers. As a result of our engagements, we have gained visibility into the carbon performance of buildings across 36% of the portfolio – well in excess of our contractual access to 12% of building data. We are continually working to improve tenant data coverage and exploring technology that will support further automation of this data, to the benefit of both parties.
At Mayfair Capital, ESG considerations are integrated throughout the investment process. Our acquisition process includes consideration of transition risks and net zero carbon requirements, and all refurbishment projects follow our Sustainable Development & Refurbishment Guide to enhance efficiency.
80% of properties in the UK that will exist in 2050 have already been built and as a result significant focus is required to decarbonise existing investment portfolios. We routinely conduct technical assessments on standing investments to identify practical carbon reduction strategies. We also employ specialist tools, such as the Carbon Risk Real Estate Monitor (CRREM) and engage with ESG software to leverage in-depth asset management and technical engineering expertise. This allows us to determine sustainability and carbon reduction initiatives that can be implemented for each asset, factoring measures into business plans and monitoring implementation through the use of our ESG asset logbooks.
The real estate sector has a significant environmental impact, but as a result can also play a pivotal role in mitigating climate change. As investors, we must make meaningful changes to the way we assess, acquire and manage real estate assets if we want to safeguard the sector and the future of the planet.
