While it is widely acknowledged that routes to improving the ‘E’ , as in environment, in ESG has reasonably obvious paths, improving the ‘S’ – the social aspect – is not so easy.
However, Christina Ofschonka provided an insight into the way that AEW approaches the ‘S’.
She is a managing director and head of core funds at the investment manager and explains that when assessing assets from the social perspective AEW “focuses a lot on urban micro locations where you have a mix of population, where you have a mix of types of views, where you have very good accessibility, especially also with public transport to bring population groups together”. Residential should include an affordable housing component, she added.
Talking to Real Asset Insight’s Richard Betts she concurred that the environmental aspects are more readily identified. “You have certificates, you can even put action plans in place to reduce carbon emissions and to make the building more energy efficient. This goes for all sectors,” Ofschonka said.
But this process is an opportunity too. “We are a very active manager with the mentality to roll up our sleeves and work with the assets.” She said this is the right attitude when assets do not yet tick all the ESG boxes.
She added that acquisition opportunities must be closely examined to determine whether there is a business case for transforming an asset that does not tick all the boxes to one that does. However, she added: “There will certainly be transaction opportunities which we walk away from.”
And AEW is in the middle of looking at its existing portfolio to determine the path to greener and more efficient buildings. A number of portfolio projects already demonstrate what is possible, “and that’s quite a promising journey that we’re on,” Ofschonka added.