Green Street renumeration considerations are subject to compliance with all Green Street policies including its ESG Policy.
Green Street considers sustainability factors in its research recommendations. Green Street has built a way to assess the “E” of ESG by rating with an “E” REIT Score. A variety of metrics, “E” metrics, have been created to assist investors in discerning differences across companies. These measures are not intended to find the most sustainable or “greenest” investment, but rather where the potential risks/opportunities may be and not factored into pricing. These “E” metrics, while important, appear to have little impact on overall intrasector REIT valuation differences. REITs tend to look very similar, which limits the ability to pick stocks based on “E”. The “E” issue matters far more between property sectors and between Class A and Class B properties. Thus, it’s not currently a big driver of Green Street stock picks, but will likely influence our thoughts between high vs low quality buildings more dramatically in the future. Green Street also examines corporate governance factors in its research recommendations. A corporate governance score has been utilized for U.S. REITs that helps inform the alignment between management, the board, and shareholders on a variety of metrics. This corporate governance score and other aspects of governance are not formal components of Green Street’s REIT valuation model, but it provides another factor with which to differentiate between REITs.
Green Street does not take into account Principle Adverse Impacts (PAIs) in its investment advice on REITs. However, there are two areas in which limited considerations involving climate events are factored into our process: market‐level long‐term growth rates account for climate events while sector allocation results are impacted either by an adjustment to risks factors or to capitalized expenditures to quantify the cost of a possible transition to net zero emission. Overall this is a very small part of our research process. In addition, since we cover public companies that operate under their own level of regulation, were an issue at a covered company made public, this would be considered and opined upon as appropriate.
Environmental, Social, and Governance Policy(ESG)
Introduction and Scope
Below is a set of principles and practices that guide Green Street’s operations to align actions with ESG goals. This policy applies to all business activities conducted by or on behalf of the Green Street global organization.
Overall, we consider social, ethical, and environmental issues in a manner consistent with our duties to our employees, clients, and owners and to be accessible to, and engage with, a range of stakeholders on key ESG issues and challenges.
Thought Leadership on this topic ensures we take the analytical lead as innovators in Commercial Real Estate on topics related to ESG that impact the industry and the environment.
Employee Engagement is important as we implement relevant and appropriate ESG training,
awareness for employees to better enable our team to make a difference through changes in behavior, and changes to company practices and policies.
Diversity and Inclusion is paramount to our organization as we identify, recruit, and develop the best talent in the market regardless of gender, race, ethnicity, nationality, religion, orientation, or other background. We celebrate the diversity of our employees, and we work continuously to create an environment where the best talent can contribute, learn, grow, and succeed regardless of differences.
Suppliers are expected to adhere to the same principles and ethical standards set by Green Street throughout the course of our business relationships. Where relevant and appropriate, we will seek partnerships with suppliers that are owned, operated, or managed by traditionally underrepresented groups.
Environmental Sustainability
We are committed to driving down our energy and carbon impacts. Our program is committed to environmentally sustainable initiatives that deliver near-term efficiency, value and health for our business, our people, and the wider community.
Social
Green Street understands the importance of meeting its social obligations both at the company level and in the communities where we do business. Green Street is committed to engage with our employees to provide a challenging, dynamic, and inclusive work environment that supports their professional development, and promotes a work-life balance that prioritizes overall health and wellness. We will support initiatives that benefit the local and macro environment, human welfare, and education. We will preserve and promote the protection of human rights and welfare within our own business activities, as well as those of our supply chain.
Governance
Our focus is to promote strong oversight, transparency, and risk management at all levels of our organization, ensuring the resilience and long-term preservation of value for our business.
