EU Sustainable Finance Disclosure Regulation

This page contains certain disclosures required to be made pursuant to Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (“SFDR“).

SFDR Entity-level Disclosures

Sustainability Risk Policies – Article 3 Disclosure

The following disclosure is being made in accordance with Articles 3(1) and (2) of the SFDR.

This disclosure applies to the following entities:

  • CBRE Investment Management EMEA AIFM B.V.
  • CBRE Investment Management Luxembourg AIFM S.à r.l.
  • CBRE Investment Management SGR p.A
  • CBRE Investment Management (UK Funds) Limited
  • CBRE Investment Management Indirect Limited

Together the “CBREIM Entities.“

The CBREIM Entities are "financial market participants" for the purposes of SFDR.

A sustainability risk is defined under SFDR as an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment. The CBREIM Entities consider that sustainability risks can have a material impact on investment performance and therefore consideration of sustainability risk is integral to the CBREIM Entities’ investment decision-making, investment management and investment advisory process.

The CBREIM Entities' policies on the integration of sustainability risks into their investment decision-making, investment management and investment advisory processes, as relevant, are incorporated into specific procedures across the business. Where a CBREIM Entity is providing portfolio management or investment advice, client sustainability preferences are determined in conjunction with suitability assessments.

The aforementioned considerations include the following key areas:

Strategic Risk Framework: the process through which risks surrounding an investment strategy can be assessed, monitored, reported and mitigated in a consistent manner;

House Views and Recommended Strategies: top-down house views and preferred strategies in light of current investment-cycle positioning;

Investment Plan: plans prepared, adopted and updated as applicable for each mandate which set out the key objectives for a portfolio based on the current portfolio composition and past performance taking into account market forecasts and in-house tactical recommendations;

Investment Evaluation: the CBREIM Entities seek to apply an asset-class-specific set of criteria when evaluating assets and key counterparties. During the investment selection process, the relevant investment committee will assess the investment proposal and consider the findings of the due diligence screening and analysis. The materiality and relevance of a sustainability risk will vary depending on the specific asset class in question. Where applicable, the membership of each investment committee may include a senior ESG Team representative to support the investment committee and provide insight and oversight as required;

Asset Management: while an asset is held, ESG data is collected, monitored and assessed, and ESG action plans are developed as necessary;

Reporting: as appropriate, ESG performance measurement and reporting is provided for each mandate and investment strategy.

Principal Adverse Impact Statements – Article 4 Disclosures in respect of:

2023 CBRE Investment Management EMEA AIFM B.V

2023 CBRE Investment Management Luxembourg AIFM S.à r.l.

2023 CBRE Investment Management SGR p.A

2023 CBRE Investment Management (UK Funds) Limited

(each a “Company” and collectively the “Companies”)

Archived Disclosures:

2022 CBRE Investment Management EMEA AIFM B.V

2022 CBRE Investment Management Luxembourg AIFM S.à r.l.

2022 CBRE Investment Management SGR p.A

2022 CBRE Investment Management (UK Funds) Limited

  1. Statement
    The Company intends to comply with Article 4 of the SFDR and considers the principal adverse impacts of its investment decisions on sustainability factors. This statement is the principal adverse sustainability impact statement of the Company.

  2. Definitions
    Sustainability factors: environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

    Principal adverse impacts: this is understood to refer to the negative impact an investment has on environmental and/or social factors (i.e., double materiality).

  3. Overview
    The CBRE Investment Management group (of which the Company is a part of) (the “Firm”) seeks to be a global leader in the real assets investment management industry by offering a broad and deep investment platform that consistently delivers world class investment results and exceptional client service. Leadership in, and implementation of, environmental, social and governance (“ESG”) practices is therefore a fundamental part of the Company’s global business strategy.

    The Firm believes that ESG factors are fundamental to its business and to driving long-term out-performance. The Firm’s “Sustainability Vision” has ambitious goals for the next two decades, including a corporate commitment to achieve many of its sustainability aspirations by 2040. Distilled from a materiality assessment, these commitments span across three distinct focus areas: climate, people and influence.

    Climate: address climate-related risks and opportunities by focusing on delivering net-zero carbon performance and physical resilience.

    People: champion diversity, equity, inclusion and the wellbeing of the Firm’s people and other stakeholders.

    Influence: engage and positively influence key stakeholders where the Firm does not have direct management control.

    Once an asset is purchased and transitioned into a portfolio managed by the Company for and on behalf of any of the funds it manages (a “Fund”), each relevant Fund’s investment team seeks to coordinate the implementation of the Firm’s internal data management system, which, in turn, allows the Company to measure, manage and improve energy and sustainability performance. This system facilitates the collection of energy, water, waste, audits, projects (including stakeholder engagement), certifications and ratings. Each relevant Fund’s investment team generally utilizes the collected data to analyse sustainability key performance indicators, file for certain ratings, assist with building certifications and determine other appropriate green building practices and initiatives. On an annual basis, each Fund contributes to GRESB, a global benchmark for real estate and infrastructure, reviews their benchmark score and sets ESG goals for the following year.

    Funds typically report on ESG issues in their periodic reports, at advisory board meetings and in ad hoc communications to their respective investors.

    The Company has a comprehensive list of ESG-related data that it seeks to collect during transaction due diligence that is uploaded into the Firm’s proprietary ESG “Acquisitions Tool”. The output produced by the “Acquisition Tool” assesses the potential exposure to ESG risks that allows each relevant investment committee to evaluate whether such risks have been adequately addressed and mitigated by the Company and ensures a consistent global approach.

    The Firms proprietary “ESG Asset Management Tool” (the “Toolkit”) provides tools and a process to analyse assets within a Fund’s portfolio to identify any assets that may need a more detailed site audit or net zero carbon audit.

  4. Description of the principal adverse impacts on sustainability factors

    The principal adverse impact indicators currently monitored and evaluated include:

    No.

    Indicator

    Summary / Metric

    Data source(s)

    1

    Fossil fuels

    (Mandatory)

    Exposure to fossil fuels through real estate assets

    Share of investments in real estate assets involved in the extraction, storage, transport or manufacture of fossil fuels

    1. Asset type list from internal database

    2. Tenant list for assets from internal database

    2

    Energy efficiency

    (Mandatory)

    Exposure to energy-inefficient real estate assets

    Share of investments in energy-inefficient real estate assets

    1. EPC ratings obtained by property managers and put into the Company’s internal data management system, which is used as part of the Company’s GRESB submission

    2. Energy intensities calculated via absolute energy use and floor area data via the Company’s internal data management system, which is used as part of the Company’s GRESB submission

    18

    Greenhouse gas emissions

    (Additional)

    Scope 1 GHG emissions generated by real estate assets

    Scope 2 GHG emissions generated by real estate assets

    Scope 3 GHG emissions generated by real estate assets

    Total GHG emissions generated by real estate assets

    1. GHG emission factors publicly available and purchased (e.g. IEA) to calculate emissions from energy use

    2. Renewable energy use via the Company’s internal data management system, and used for GRESB submission

    3. Fuel, district and electricity data for landlord and tenant-controlled areas via the Company’s internal data management system, and used as part of the Company’s GRESB submission

    19

    Energy Consumption

    (Additional)

    Energy consumption in GWh of owned real estate assets per square meter

    1. Energy intensities calculated via absolute energy use and floor area data from the Company’s internal data management system, and used as part of the Company’s GRESB submission


  5. Description of policies to identify and prioritise principal adverse impacts on sustainability factors

    During due diligence, the Company identifies the potential for improvements that would lessen a property’s environmental impact and promote wellbeing. The Company typically retains third-party specialist consultants to evaluate physical and locational characteristics of each investment. The relevant investment team then identifies risks and opportunities that can be addressed through physical upgrades and “green” initiatives for potential investments which the Company seeks to include in each asset’s investment strategy and capital expenditure program. This is done systematically by using the Firm’s Toolkit to ensure consistency across investments. The methodology may consider ESG factors such as:

    • location;
    • tenant and industry exposure;
    • energy efficiency;
    • energy labels;
    • the potential for green building certification;
    • the presence of harmful materials or contamination;
    • a building’s exterior environmental characteristics (orientation, facades, landscape, etc.);
    • a building’s interior environmental/wellbeing characteristics (lighting, air quality, tenant comfort, etc.);
    • climate change risks and opportunities; and/or
    • access to public transportation, employment and amenities

    The output of the ToolKit assesses the potential exposure to ESG risks. It is typically presented to each relevant Fund’s investment committee with the aim of helping them evaluate whether such risks have been adequately addressed and mitigated and ensures a consistent global approach.

    During the Company’s asset management process, for transition risks associated with climate change, the Company utilizes a third-party tool to identify any potential stranding risk. The Company seeks to integrate climate and other ESG risks into the financial modelling for any new acquisition as part of the calculation of a risk-adjusted return. For the assessment of physical risks (floods, sea-level rise, heat stress, water stress, hurricane/typhoons and wildfires) the Company typically utilizes another third-party tool which provides a high-level indication of the risk exposure for any location globally. Should a property be found to be at high or critical risk, the Company generally undertakes further investigations into the building and the location.

  6. Engagement
    The Company regularly engages with property managers, leasing teams and tenants to share best practices, conduct tenant engagement surveys and provide training and programming – including in respect to sustainability issues and expectations. Many of the property managers are trained on the use of the Company’s internal data management system and on the ESG data it is required to collect.

    Tenants have a key role to play as users of the properties that each Fund invests in. As such, the Company actively seeks to engage with tenants to help it achieve the Firm’s key stewardship themes. These include education on energy efficiency and the benefits of diversity in the workplace. Tenant engagement activity may include initiatives such as tenant and resident satisfaction surveys, tenant data collection and green leases. Although priorities may differ by geographical location, the Firm seeks to maintain a consistent engagement approach for direct real estate across its global platform.

  7. Reference to responsible codes and international standards
    The Firm has been a signatory to the Principles for Responsible Investment (“PRI”) since 2009, participated in the GRESB pilot in 2009 and has actively contributed to GRESB since. The Company developed its first Sustainability Policy in 2013 and supports the Global Compact Principles and United Nations Sustainable Development Goals. Of the 66 funds and accounts the Firm submitted to the GRESB Real Estate Assessment in 2022, 22 of the Firm’s funds/accounts achieved 4- or 5-star performance, being in the top two quintiles. The Firm had two regional sector leaders and two peer group leaders in their categories. The Firm seeks to continually evolve its ESG practices as new technologies are developed, and new processes established to improve efficiencies and effectiveness. On an annual basis or as needed, the Firm reviews and revises its ESG Policy. The Firm is a member and active participant in the work of the PRI’s real estate working group and the Institutional Investors Group on Climate Change (“IIGCC”) as well as a supporters of the Task Force on Climate-related Financial Disclosures.

    The Firm is also a signatory, member or participant in a number of other global and regional ESG-related networks and initiatives, including: Asian Association for Investors in Non-listed Real Estate Vehicles, Building Owners and Managers Association International, Better Buildings Partnership, Coalition for Climate Resilient Investment , Commercial Real Estate Finance Council Europe,  Green Lending Group, Global Impact Investment Framework , Global Investor Coalition on Climate Change (including AIGCC, Ceres, IGCC, IIGCC), Institute of Corporate Responsibility and Sustainability, Pensions For Purpose, Sustainability Accounting Standards Board, Sustainability Policy Advisory Committee  of the Real Estate Roundtable, The Aldersgate Group, The Association of Real Estate Funds  ESG and Impact Investing Committee, The European Association for Investors in Non-Listed Real Estate Vehicles, The Investor Agenda, UK All-Party Parliamentary Group on ESG, UK Green Building Council, The United Nations Environment Programme Financial Initiative and Urban Land Institute Sustainability Council Sustainability Council, West London Business. Involvement in these organisations reinforces the Firm’s commitment to ESG practices.

Principal Adverse Impact Statement – Article 4 Disclosure in respect of CBRE Investment Management Indirect Limited

CBRE Investment Management Indirect Limited (“CBREIM Indirect”) recognises the importance of the consideration of the principal adverse impacts of its investment decisions on sustainability factors.

However, CBREIM Indirect has elected that for purposes of (and in accordance with) SFDR, it will not seek to "consider principal adverse impacts of investment decisions on sustainability factors", as prescribed by SFDR, given that the applicability of companies-specific indicators to private indirect real-estate investments is unclear. For this reason, the scope of principal and additional adverse sustainability impacts to be considered for such investments is not fully understood, and compliance cannot be confirmed at this time.

CBREIM Indirect will reassess this decision once clarity on the applicability of companies-specific vs real estate-specific indicators to private real-estate investments is achieved.

Notwithstanding this decision, CBREIM Indirect confirms that as a more general matter ESG considerations remain of great importance, including in the context of its investment decisions.

Remuneration Statement – Article 5 Disclosure

Disclosure pursuant to Article 5 of SFDR.

CBRE Investment Management has established remuneration policies (collectively, the “Policy”) applicable to all group entities (together,  “CBRE Investment Management EMEA” or the “Company”) established in Europe, the Middle East and Africa (“EMEA”). The Policy is developed, approved, implemented and monitored by a series of bodies within the group structure, including in particular the boards of the entities in scope and relevant human resources and risk management departments. The Policy applies to all employees of CBRE Investment Management EMEA, save for limited exceptions.

The Policy has been developed with the aim of supporting the Company's business strategy, corporate values and long-term interests, including by facilitating the identification, assessment and management of sustainability risks when determining individual remuneration packages. The key principles of the Policy include fostering appropriate risk culture (including with respect to the management of actual and potential conflicts of interest) and compliance with applicable law and regulation.

The performance management and rewards framework envisioned by the Policy has been designed to promote effective risk management, including with regards to sustainability risk.

SFDR Product-level Disclosures

This disclosure applies to the following entities:

  • CBRE Investment Management EMEA AIFM B.V.
  • CBRE Investment Management Luxembourg AIFM S.à r.l.
  • CBRE Investment Management (UK Funds) Limited
    (each such entity being a “Manager”)

The Manager manages (i) certain products which promote environmental and/or social characteristics and fall under Article 8(1) of SFDR; and (ii) certain products which have sustainable investment as their objective and fall under Article 9(1) of SFDR.  The disclosures required under Article 10(1) of SFDR and other information on sustainability-related matters in respect of such products can be found at the link immediately below. The Manager has taken measures to protect the confidentiality of the information contained in such disclosures.

SFDR Article 10 Disclosures

CBRE Global Infrastructure Fund ("CGIF")