STAKEHOLDER ENGAGEMENT AND MATERIALITY
Getting our priorities right
We are part of a six-generation family enterprise that cares deeply about the people and communities it serves. For this reason, we strive to have a lasting positive impact on society and the environment and strive to engage with a wide range of stakeholders, including shareholders, investor clients, occupiers, suppliers and employees. Stakeholder outreach is also seen as a vital part of conducting effective materiality assessments.
Consistent with the Global Reporting Initiative (GRI) Standards, we conduct a materiality assessment every two years. Our latest materiality assessment took place between December 2021 and February 2022. The assessment was executed by an external consultant. During this assessment we collected quantitative and qualitative input from key stakeholder groups: shareholders, investor clients, occupiers and employees. This materiality assessment identified nine high material topics and these were discussed and confirmed with our Management Team: Greenhouse gas (GHG) emissions, Renewable energy, Climate resilience, Responsible rent and lease management, Inclusion, diversity and equality, Employer of choice, Responsible governance, Responsible Resource use and Innovation.
“At Redevco, we have developed and now actively use a Climate Risk tool to evaluate individual asset locations on climate risks.”
Although these high material topics were defined and confirmed in early 2022, the GRI standards have also been updated with a newer version made available during 2022. To ensure that this RI Report satisfies the ‘with reference to’ standards of the GRI, the Sustainability team at Redevco performed an internal assessment on the aforementioned material topics. Given that these were determined in early 2022 and more work needs to be done to demonstrate progress on these topics, we believe these are still relevant and conform to the definition of materiality in line with the upgraded standards. In our management approach to all material topics on the coming pages, we reflect on how these topics represent the organization’s most significant impacts on the economy, environment, and people, including impacts on their human rights. We will also be performing a new materiality assessment later in 2023.
Based on the shortlist of nine high material topics, our Management Team subsequently ran a maturity assessment to gauge the extent to which these topics were sufficiently embedded in or covered by how we operate. This exercise resulted in the top four most urgent topics: Climate resilience, GHG emissions, Innovation and Responsible rent and lease management. These are material topics that are not as mature as one might expect in our organisation. In order to track progress on these four most urgent topics, targets and KPIs have been formulated. In addition we set targets for four additional material topics: Renewable energy, Responsible governance, Employer of Choice and Inclusion, Diversity & Equality. The only high material topic that does not get specific attention in the targets and KPIs is Responsible resource use. This is because it is also covered under the actions and KPIs that we formulate pertaining to GHG emissions and Climate resilience. For example, by using our Sustainable Design Guide for our (re)development projects, we are stimulating deliberate thought and decision-making on materials use and resource use in general. In 2022 a number of improvements have been implemented, an overview of these including the progress can be found in our Targets & Results 2022 here.
Management approach to all material topics
The GRI Standards require that we report on how our organisation gives management attention to all high material topics. In the context of the new GRI Standards, we will also express how these material topics have an impact on the economy, environment and society in general, including on people’s human rights. Hereunder we explain how and where these topics receive attention, with reference to other sections of this report for more details.
The real estate sector as a whole is one of the largest contributors to global warming through the materials and energy use related to the construction and operation of buildings, and their corresponding GHG emissions. Redevco believes we have a responsibility to reduce our emissions as much as possible, thereby reducing as much as possible any negative impact on the environment or the people occupying our assets. In the context of our Mission 2040, which relates to both how we operate as an asset manager as well as to our assets under management, GHG emissions reporting has become the most material topic. We are taking action to measure these emissions as robustly, completely and accurately as possible through our smart metering program, we have started to report on our portfolio emissions for the first time (in addition to our corporate emissions) and we have set ourselves clear reduction targets for the medium and longer term. This is a journey whereby the scope and the data collection can still be increased and improved, but we take this topic very seriously as described throughout this report. We have also formulated explicit KPIs relating to this topic.
This is an important lever in our journey towards emissions reduction in our AuM. We have embarked on a long-term project to install on-site renewable energy on or around our assets wherever there is sufficient space and it is financially responsible to do so. We believe that by deliberately investing in renewable energy generation for use by our buildings’ occupants, we are contributing to the clean energy transition whereby less fossil fuels are needed to generate and satisfy electricity demand. Whilst our contribution remains very small in absolute terms, it symbolizes a positive impact for the environment and ultimately for all of society. We report proactively on progress with this initiative elsewhere in this report and have set explicit KPIs for this topic.
Arguably, a large portion of the real estate sector is still learning how to integrate a proper view of the physical and transition risks of climate change on real estate into their management plans. At Redevco, we have developed and now actively use a Climate Risk tool to evaluate individual asset locations for these risks – albeit our tool looks at city-level risks using EEA (European Environmental Agency) data – in order to identify mitigating actions that we incorporate into asset business plans, acquisition due diligence underwriting and redevelopment proposals. Whilst far from perfect, this topic is also about mindset change within our own organisation and a recognition that we must deliberately include this lens into our actions in order to ensure that tenants will still want to occupy our assets in the future, let alone maintain liquidity in the investment market. We recognise there is more work to be done on this topic and hence we have formulated a clear KPI to ensure this gets embedded structurally in the way we approach our work. If we don’t include this lens, and therefore don’t take deliberate mitigation or adaptation measures, it seems clear to us that we would be risking significant negative impact on the assets themselves, the environment as well as the people that would be impacted by assets that aren’t resilient. See Climate change risk for more detail on why we believe thinking deliberately about flood risk or heat stress is integral to our mission to ensure cities are sustainable and liveable.
Responsible Rent and Lease Management
This topic is at the heart of Redevco’s progress to have positive impact through our real estate asset management activities. It starts with the recognition that we must collaborate very deliberately with our tenants to raise awareness of the importance of sustainability topics – environmental as well as social – and there must be a willingness from both sides to take conscious decisions that will drive towards better impact performance. We have formulated a number of KPIs to make this topic a more deliberate part of our conversations with tenants, however we acknowledge that this also remains a journey and different parties are at different stages of their own acceptance of the role they can play to drive positive collaboration on this front.
Inclusion, Diversity & Equality
Redevco cares about this topic and has formulated a I, D & E policy to give weight to how it approaches this topic in practice. Whilst the focus of this material topic might be directed more at our own organisation, it remains relevant for our interaction and collaboration with tenants as well as supply chain partners. This is a core topic for Redevco’s approach to the ‘S’ of ESG and we seek to be consistent in our approach.
Employer of Choice
This particular topic from the materiality assessment is linked closely to the topic above on I, D & E. Redevco seeks regular feedback from its employees via a biannual Pulse Survey to check engagement and enablement scores and we discuss anecdotal feedback from colleagues at regular moments throughout the year. Engaging deliberately in dialogue with our employees is also about their right to express their opinion on how we operate and to feel valued and included in pursuit of our collective mission.
As a core principle for how Redevco wants to operate, we provide a clear description of how Responsible Governance is set up within our organisation and the attention it receives. By ensuring responsible governance and decision-making, we believe we are better equipped to ensure our activities have positive impact on people, the economy and the environment. Please see Chapter ‘Responsible governance‘ for more details.
Responsible Resource Use
This material topic is perhaps a bit more abstract in terms of how we report on it for the time being. With the implementation of our Sustainable Design Guide for our (re)developments, where deliberate choices around materials use, recyclability and generally overall reduction in resource use are brought to the fore, we strive over time to drive positive impact on this topic. We have not (yet) formulated specific KPIs to be able to track progress on this topic, but it also requires further training and building of expertise amongst our colleagues to drive this topic intentionally in collaboration with our design team partners.
This topic ended up high on our list of material topics in last year’s stakeholder interviews. With real estate arguably being considered a rather conservative industry, innovation is naturally a topic that should receive more attention and be more deliberately integrated in how we operate and evolve as an asset management business. Whilst we have formulated specific KPIs on this topic, we acknowledge that these
KPIs are difficult to measure and on which to demonstrate progress. Redevco hired a Head of Innovation in early 2022 (reported in last year’s RI Report) and our organisation is clearly aware that our Board and
Management Team is deliberately initiating a change in behaviour and attitude towards innovation and operating ‘outside our comfort zone’. However this takes time and will not necessarily be obviously visible
to our external stakeholders in the short term. We are resolute, however, in our conviction that adopting an innovative mindset will be key to keeping Redevco at the forefront of progress within our industry to make a difference and have a positive impact on E, S and G topics.
“We must collaborate very deliberately with our tenants to raise awareness of the importance of sustainability topics – environmental as well as social.”