as at June 2021
Is sustainability part of your corporate strategy?
As one of Germany’s leading listed real estate companies, DIC Asset AG has committed to a sustainable development: To ensure its long-term financial success, the company’s senior management attaches great importance to ESG aspects (“economic, social, governance”) in addition to economic aspects.
The first time we presented a sustainability strategy was in our 2011 Sustainability Report, which defined the company’s principles for the economic, environmental and social dimensions.
In 2021, we rephrased our ESG strategy including guidelines and values, and reorganised the company to accommodate the ESG dimensions. The Sustainability Report 2020 details the company’s ESG strategy for the first time.
In what form does DIC Asset AG report on its sustainability activities?
Since March of 2011, DIC Asset AG has published its own annual sustainability report. As a publicly traded company, we orient ourselves to the internationally recognised reporting standards issued by the Global Reporting Initiative (GRI standards) and by the European Public Real Estate Association (EPRA sBPR). Our report is compiled in accordance with the “Core” option of the GRI standards.
As one of Germany’s leading listed property companies, DIC Asset AG participates in the established ESG ratings which measures performance
Is ESG clearly embedded in the organisation’s management processes and procedures?
The senior management (CEO/CFO) is responsible for the sustainability topic.
In early 2021, we filled the newly created position of Head of Sustainability for the purpose of intensifying the ESG activities and to implement a more thorough sustainability strategy for all group entities. The Head of Sustainability reports directly to the CEO.
The operational control, implementation and processing of ESG topics and projects takes place in the organisational entities identified by the organisational structure of DIC Asset AG.
Is sustainability a component in the company’s real estate product strategy?
DIC Asset AG has pooled its proprietary Commercial Portfolio (with currently EUR 2.0 billion in assets under management) as well as the managed real estate of the Institutional Business segment (with currently EUR 8.6 billion in assets under management) on its own property management platform.
On the basis of our 360-degree approach (MATCH – TRANSACT – OPERATE – DEVELOP), which applies throughout the company, we developed an ESG management approach for our properties and funds that covers everything from the first matching (MATCH) to the initiating and structuring of transactions (TRANSACT) all the way to the operation of the real estate (OPERATE) and to upgrades and refurbishments (DEVELOP).
For fund products, we disclose the ESG characteristics and targets as part of the pre-contractual information. The latest legislative developments (e. g. Sustainable Finance Disclosure Regulation, EU Taxonomy) and investor decisions on special ESG measures or ESG ratings (e. g. GRESB, ECORE) are taken into account by adapting the fund strategy accordingly.
The annual review on the levels of company and buildings, and the drafting of ESG action plans for the assets under our management serve as major steering instruments.
What sort of criteria / targets of ESG character do you use for the portfolio and within the framework of a given investment?
We orient ourselves to the existing laws and regulatory frameworks (e. g. on energy) to derive our criteria and targets. At present, we are closely analysing the requirements codified in the Sustainable Finance Disclosure Regulation (German “OffV”) and the EU Taxonomy.
One ESG criterion of DIC Asset AG is “green buildings” which was implemented in conjunction with the issuance of the company’s first ESG-linked promissory note in the amount of EUR 250 million.
Our current focus with respect to ESG criteria is on the testing of scoring models within the framework of pilots (ECORE pilot phase) or ratings in which we participated (GRESB rating for RLI Logistics Fund – Germany I”) and the associated exchange of information.
Do you use building certifications (DGNB, BREEAM, LEED, etc.) as external quality assurance?
Building certifications (according to DGNB, LEED and BREEAM) are one of several external quality assurance tools DIC Asset AG uses, but they are neither exclusive nor necessarily applicable. We are making pinpoint use of the building certification tool depending on asset class, year built, the question of new-build or standing property, and investment strategy and ESG strategy.
In addition to in-house quality assurance by our experience management, we are also relying on tools like due diligence (DD) examinations and the technical due diligence (TDD) and ESG due diligence components. This goes for acquisitions in particular.
Additional management approaches include ESG portfolio ratings like ECORE and, in future, the scoring models of our AIF management companies or else our own in-house scoring models, which integrate property-, portfolio- or fund-relevant requirements. In addition, regulative provisions play a role, e. g. those from the Sustainable Finance Disclosure Regulation and the Taxonomy Regulation.
Is the sustainability topic embedded in the investment process?
Conducting ESG due diligences is an integral component of our acquisition process, as is the drafting of ESG action plans for newly acquired properties. It is currently being expanded to include further requirements. The ESG due diligences are conducted by (independent) experts.
Does the company play an active part in ESG-relevant networks?
We are active members in various trade associations and industry organisations, our goal being to anchor sustainability-related topics such as transparency, reporting or investor communications more firmly in the German real estate sector, and to promote the exchange of experience and information within our industry.
Together with other industry players, we engage in efforts to boost awareness for real estate businesses and their concerns, especially in the trade associations German Property Federation (ZIA) and European Public Real Estate Association (EPRA). Our membership in the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) underlines the growing significance of the third-party business in our Institutional Business segment.
We are also a member of “ECORE – ESG Circle of Real Estate,” an industry initiative for ESG conformity in real estate portfolios. We use ECORE as dialogue and best practice platform for the open and trust-based exchange with major players in the industry and with the trade associations, BVI and ZIA. RLI Investors, now a subsidiary of DIC Asset AG (since January 2021), was actively involved in the development of a European standard for measuring the sustainability performance of properties and portfolios in 2020.
We are moreover in close dialogue with our AIF management companies (German “KVG”). Our ambition here is to play an active partner role in the structuring of a given fund product and to contribute experience from the active management of third-party real estate assets in our care and from the ESG management of our proprietary real assets.