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2019

Fund

Assessment

Contents

Disclaimer: 2019 GRESB Infrastructure Assessments

The information in this document has been provided in good faith and is provided on an “as is” basis. While we do not anticipate major changes, we reserve the right to make modifications prior to the official 2019 results launch on September 4. We will publicly announce any such modifications.

Introduction

About GRESB

GRESB is the environmental, social and governance (ESG) benchmark for real assets. Working in collaboration with the industry, GRESB defines the global standard for sustainability performance in real assets providing standardized and validated ESG data to more than 75 institutional investors, representing over USD 18 trillion in institutional capital.

For more information, visit gresb.com. Follow @GRESB on Twitter.

Overview of GRESB Infrastructure Assessments

GRESB Infrastructure Asset Assessment

The GRESB Infrastructure Asset Assessment (Asset Assessment) provides the basis for systematic reporting, validation, objective scoring and peer benchmarking of ESG management and performance of infrastructure assets around the world. Both single and multi-facility assets can participate and the process leads to deep data insights for investors, fund managers and asset operators.

The Asset Assessment is organized around seven Sustainability Aspects. These aspects are broken down into indicators addressing asset-level plans and policies, implementation actions and operational performance.

GRESB Infrastructure Fund Assessment

The GRESB Infrastructure Fund Assessment (Fund Assessment) provides the basis for systematic reporting, validation, objective scoring and peer benchmarking of ESG management and performance of infrastructure funds around the world.

The Fund Assessment contains 13 indicators focused on management and investment processes. These indicators address foundational ESG plans and policies, leadership and accountability, engagement strategies, communications processes and other factors.

Supplement: Resilience

The GRESB Resilience Module is an optional supplement to the GRESB Real Estate and Infrastructure Assessments. It evaluates how real estate and infrastructure companies and funds are preparing for potentially disruptive events and changing conditions, assessing long-term trends, and becoming more resilient over time. The Module is motivated by two key factors:

The Resilience Module can optionally be completed along with the Asset Assessment.

The role of the GRESB benchmark

GRESB’s global benchmark uses a consistent methodology to compare performance across different regions, investment vehicles and infrastructure sectors. This consistency, combined with our broad market coverage, means our members and participants can apply a single, globally recognized ESG framework to all their infrastructure investments.

GRESB results provide a practical way to understand ESG performance and communicate that performance to investors and other stakeholders. GRESB provides overall scores of ESG performance - such as the GRESB Score and GRESB Ratings - as well as detailed aspect-level and individual indicator-level scores. The key to analyzing GRESB data is in peer group comparisons that take into account country, regional, sectoral and investment type variations. This richer analysis enables fund managers, companies and asset operators to understand their results in the context of their investment strategies and communicate this to their investors.

GRESB is committed to facilitating the use of its ESG metrics in investment decision-making processes and encouraging an active dialogue between investors, fund managers, companies and asset operators on ESG issues. GRESB updates its Investor Member Guidance on an annual basis to assist GRESB Investor Members in their engagement with managers.

2019 Participation Fee

Participation in the GRESB Fund Assessment is free of charge for first-time participants and for companies and funds headquartered in non-OECD countries. Participation for GRESB Members is covered by the membership fee. GRESB Members, in addition to the benefits received by participants, have access to more advanced analytical tools and services as well as preferential marketing, industry recognition, and networking opportunities. Non-member participants must pay a nominal participation fee at the time of submission.

Additional information about the 2019 participation fee is available here.

Timeline and Process

The Assessment Portal opens on April 1, 2019. The submission deadline is July 1, 2019, providing participants with a three-month window to complete the Assessment. This is a fixed deadline, and GRESB will not accept submissions received after this date.

The GRESB validation process starts on June 15, 2019 and continues until July 31, 2019. We may need to contact you during this time to clarify any issues with your response.

Results are published in September. For an overview of key dates and activities for the 2019 Assessment cycle, please see the Assessment timeline.

GRESB Assessment Training Program

GRESB Infrastructure Assessment Training is designed to help participants, potential participants and other GRESB stakeholders (managers, consultants, data partners) improve their ESG reporting through the GRESB Infrastructure Assessments.

Training is delivered via face-to-face group sessions, in select locations across all regions with GRESB participation, including Europe, North America and Asia Pacific. See dates and locations for 2019 GRESB Assessment Training.

2019 GRESB Fund Assessment Changes

GRESB works closely with its members and broader industry stakeholders to update our Assessments annually to improve reporting and data accuracy, minimize reporting burden and stay up to date with contemporary ESG developments.

The main areas of development for the 2019 Fund Assessment include improvements to the Fund-Asset linking functionality and refinements to specific indicators to provide better benchmarking. These updates align with the longer term development of the Assessment, support our efforts to improve data quality and reflect the evolution of the infrastructure industry as measured by the benchmark over the last three years.

The table below lists the key changes, as well as their implications for your reporting process.

High-level comments

1

New Indicators

New Indicators on Personnel KPIs and ‘Gender & Diversity’ have been introduced. Both indicators were identified as material based on feedback and provide further alignment with the Real Estate and Asset Assessments. The former has become standard practice to report on and will be scored. ‘Gender & Diversity’ will not be scored in 2019.

2

The access to the Template Tool is no longer restricted to members

The template tool enables participants to copy information across multiple assessments, reducing the amount of time spent replicating information for entities held by the same manager.

3

Fund-Asset Linking

Significant improvements have been made to the Fund-Asset linking process. Funds will be able to add non-participating assets to their Fund-Asset table without creating a new asset assessment. Asset participants will be able to see what funds are linked to their asset from their assessment portal.

4

Good Practice Links

Both the asset and fund assessment indicator guidance will now include good practice examples drawn from publicly available evidence provided for indicators.

5

The Validation Interview process changes structure and will be mainly based on a desktop review

While the scope of the Validation Interview will remain the same (the validators will do an in-depth analysis of all supporting evidences, mandatory and non-mandatory, performance indicators and outliers), the Validation Interview report, the call with the participant, and the participant’s ability to change their responses following the call will be removed from the process. Participants will continue to be automatically notified if they are selected for a Validation Interview and there may still be instances where we need to contact the participant for missing supporting evidence, additional information, clarifications or corrections to the data submitted.

Indicator changes

RC3

Description: Sector focus names updated to align with the adopted EDHECInfra TICCS classification scheme.

Rationale for change: To simplify sector classification and align with a standardized classification system.

Impact of change: More standardized classification.

RC4

Description: Geographic focus updated to align with the United Nations Standard Country or Area Codes for Statistical Use classification.

Rationale for change: To simplify geographic classification and align with a standardized classification system.

Impact of change: More standardized classification.

FUND1

Description: Focus on ‘Sustainable investment objectives’ has been broadened to ‘Sustainable investment strategies’ in alignment with Global Sustainable Investment Sustainability Alliance (GSIA) responsible investment strategies.

Rationale for change: Previously there were difficulties in measuring, validating and benchmarking the objectives. Some of the objective topics were covered elsewhere in the assessment.

Impact of change: Alignment with standardized responsible investment strategies and more useful information for investors.

FUND3

Description: Structure has been changed to two sub-sections in the portal. Removed separate evidence when validating selection of PRI checkbox. Added new commitment options - ‘Climate Action 100+’, ‘Montreal Pledge’ and ‘Science Based Targets Initiative’. Updated naming for commitment options - 'Climate Action in Financial Instituitions Initiative' and 'Global Investor Coalition'.

Rationale for change: Review of evidence requirements and 2018 response data showed that there is no longer a need to require evidence for PRI signatories. Review of current industry commitments identified relevant new ones.

Impact of change: Greater coverage of relevant commitments.

FUND5

Description: Added senior decision maker options for ‘Fund/portfolio managers’ and ‘ESG specialist team’.

Rationale for change: Review of 2018 ‘Other’ responses highlighted that these were commonly selected.

Impact of change: Greater clarity and reduced reporting burden.

FUND6 (NEW)

Description: New indicator on inclusion of ESG factors in annual performance targets of personnel.

Rationale for change: This has been valuable in the Asset Assessment including being shown to correlate with improved ESG scores.

Impact of change: Increase in reporting burden in exchange for adding a driver of improved ESG performance and greater alignment across GRESB assessments.

FUND7 (NEW)

Description: New Indicator on ‘Gender & Diversity’ focusing on transparency of reporting.

Rationale for change: This was identified as a material issue by the IBC and IAB and aligns with the Real Estate Assessment.

Impact of change: Increased reporting burden although it is not scored in 2019.

FUND8 (Former FUND6)

Description: The indicator has been restructured to focus on the overall pre-investment phase. Open text boxes have been removed. New checkboxes reflect specific elements of the assessment process.

Rationale for change: Review of 2018 responses showed participants did not greatly differentiate their approach to ESG across the different phases of screening, due-diligence and investment decision making. Previously there were difficulties in benchmarking and differentiating the open text box responses.

Impact of change: Reduced reporting burden and greater benchmarking.

FUND9 (Former FUND7)

Description: Added new option ‘Community/Public’ for ‘Who are the risks and/or opportunities communicated to:’ and ‘Other’ option removed.

Rationale for change: More standardization of responses. Review of 2018 ‘Other’ answers showed that this was the only valid other option. Adding this option means the list of core stakeholders is consistent throughout the fund assessment.

Impact of change: Greater clarity.

FUND11 (Former FUND9)

Description: ‘Frequency of reporting’ removed for all options except ‘Entity reporting to investors’.

Rationale for change: Review of 2018 answers highlighted that most reports are not undertaken more frequently than annually.

Impact of change: Reduced reporting burden.

Fund-Asset Table

Description: A range of improvements have been made to the Fund-Asset table which links assets to a fund and also lists the assets not participating in GRESB. These improvements include:

  • Participants are no longer required to create and connect to a reporting entity. Funds will therefore be able to list assets in their Fund-Asset table that are not participating, without needing to create new assessments in the portal.
  • Dropdown lists of all available assets for linking will be embedded into the table.
  • New columns will display connection status and assessment status (i.e % completed).
  • Approvals of Fund-Asset links will be are now visible within the portal for asset linked users. Pre-fill of Fund-Asset table continues.

Rationale for change: Existing structure was prone to errors and confusion by participants, with significant assistance required from GRESB. Both Funds and Asset participants wanted more clarity on whether the correct link had been made.

Impact of change: More flexibility for funds who want to add assets that do not participate. Reduced mistakes and potential number of errors. Reduced reporting burden. More streamlined process for linking assets to funds.

Entity & Reporting Characteristics

Entity Characteristics

2018 Indicator

Reporting Characteristics

2018 Indicator

Fund Management & Investment Process

Policies & Objectives

2018 Indicator

8 points

8 points

8 points

Leadership & Accountability

2018 Indicator

5 points

5 points

5 points

Not scored

Risks & Opportunities

2018 Indicator

13.333 points

13.333 points

13.333 points

ESG Disclosure

2018 Indicator

8 points

5 points

8 points

Summary of Entity Assets

233 points