Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Corporate Governance
• Labour Standards
• Environmental Standards
• Business Conduct
• Human Rights

Environmental Achievements

• Managing agents joined the Better Buildings Partnership to establish a pathway to achieving carbon neutrality by 2050.
• Implementing software-enabled data management to improve visibility of utility consumption.
• Targeting a minimum EPC rating of D for all planned refurbishments and upgrade works.

Social Achievements

• Pro-actively engaging with occupiers to support their ESG-related objectives.
• Developing a Green Lease toolkit for all new leases to reduce energy and water consumption and waste generation.

Governance Achievements

• Establishing an ESG-focused refurbishment checklist to ensure projects meet environmental, social, and governance standards.
• Developing a net zero carbon pathway and targets in line with the Better Buildings Partnership framework.

Climate Goals & Targets

Environmental Challenges

• Share price underperformance relative to NAV.
• Market risk impacting portfolio value.
• Inability to maintain dividend growth due to various factors (lower earnings in investee companies, vacancies in direct property portfolio, currency fluctuations, tax changes, interest rate increases).
• Accounting and operational risks from third-party service providers.
• Risk of losing Investment Trust status.
• Legal, regulatory, and reporting risks.
• Inappropriate use of gearing.
• Personnel changes at Investment Manager.

Mitigation Strategies

• Monitoring discount/premium, engaging with shareholders, using share buy-back/issuance powers.
• Regularly reviewing long-term strategy, investment guidelines, and Manager's performance; power to change Manager.
• Regular reports from Manager on asset allocation, investment decisions, currency exposures, and gearing levels; using revenue reserves to supplement distributions.
• Periodic reports from third-party service providers on control environments and business continuation provisions; monitoring service quality.
• Monitoring investment portfolio, income, and proposed dividend levels to ensure compliance with CTA 2010.
• Regular regulatory updates from Manager, Company Secretary, legal advisors, and Auditor.
• Regular reports from Manager on gearing levels; balancing pricing and flexibility in debt sourcing.
• Regular meetings with Fund Management team; fee structure incentivizes outperformance and retains key staff.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• ESG strategy to minimize negative impact on people and the environment, promote safe and fair working conditions, and manage social, ethical, and environmental issues.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Increase in climate-related compliance expenditure

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Article 6 Fund under EU’s Sustainable Finance Disclosure Regulations

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Winner of Citywire Investment Trust Awards in the Specialist Equities category (two years running).

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• 100% of landlord electricity and gas supplies are now contracted on certified green tariffs, backed by the Ofgem regulated Renewable Energy Guarantees of Origin (REGO) scheme.
• Improved the two EPC G ratings within the portfolio to B and C ratings and increasing the percentage of assets now qualifying for EPC ratings by over 20%.
• Successful transition of all energy across landlord areas for the whole portfolio to renewable sources.
• Installation of PV cells on the roof of a building in Gloucester, generating 80% of onsite electricity consumption and reducing CO2 emissions by 49 tonnes per annum.

Social Achievements

• Letting of Unit 16 at Ferrier Street to the Wandsworth Foodbank at nil rent, enabling them to increase emergency food provision by 71%.

Governance Achievements

• Compliance with the AIC Code of Corporate Governance.
• Board comprises three male Directors and three female Directors, meeting the FCA's rules for diversity and inclusion.

Climate Goals & Targets

Environmental Challenges

• Market volatility and multiple directional shifts in the property sector due to interest rate expectations.
• Rising interest rates impacting capital values and distributions of property companies.
• Dividend cuts or suspensions by several companies due to rising debt costs.
• Weaker investor sentiment towards the property sector.

Mitigation Strategies

• Active portfolio management, focusing on companies with resilient earnings and market fundamentals.
• Careful analysis of companies' balance sheet capacity and leverage.
• Maintaining a long-standing discipline of buying companies with resilient earnings.
• Using revenue reserves to maintain dividend levels during short-term income falls.

Supply Chain Management

Responsible Procurement

• Working with local supply chain partners to deliver best-in-class service and support local economies.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: AIC Code of Corporate Governance