An SRI label for real estate funds
Expected for several years by real estate fund management companies, an SRI (Socially Responsible Investment) label specific to the sector was created in October 2020.
In concrete terms, it allows investors to better identify real estate funds such as SCPIs (Sociétés Civiles de Placement Immobilier) that implement an SRI approach.
SRI label: an identification tool
Launched at the end of 2015 by the public authorities, the SRI label is a state label enabling investors to identify savings and investment products that seek to reconcile financial and extra-financial performance, by integrating the consideration of environmental, social and good governance criteria (ESG criteria) in their investment and management processes. Until now, it has only been available for movable assets (shares, bonds, etc.).
Its extension to the universe of real estate funds will make it easier for SCPI unit subscribers to choose their investments based on non-financial criteria. It will give them the means to actively participate in the transformation of the real estate sector, which is necessary to achieve the climate and ecological objectives set by public authorities (real estate is one of the sectors that produces the most greenhouse gas emissions).
SRI label: a guarantee of quality
The adaptation of the SRI label to real estate clarifies the contours of sustainable and responsible real estate management and defines common criteria to guide practices. As such, it is a guarantee of quality, reliability and transparency for investors wishing to invest responsibly.
To qualify, an SCPI must prove that it is committed to a policy of improving its investments in terms of ESG criteria. The label thus makes it possible to identify funds that invest in the best performing assets in terms of environmental, social and good governance issues and those that implement virtuous management practices to improve the ESG performance of their assets over time.
Good to know
The real estate SRI label is not only available to SCPIs investing in the newest and best performing buildings. SCPIs investing in improving the ESG performance of their portfolio buildings can also obtain it.
SRI Label: A demanding set of specifications
The introduction of an SRI label adapted to real estate responds to the increasingly strong expectations of investors and public authorities in favor of sustainable investments. This label is awarded to funds that have a committed ESG policy. It identifies the key ESG themes for the sector and requires SCPIs to cover the three pillars E, S and G in a balanced manner, based on a set of precise and objective performance indicators.
As part of the management of their label SCPIs, management companies are subject to standardized methods of analysis and transparency in their communication. They must set ESG objectives and implement a precise methodology for the construction and management of their assets. They must also be transparent by reporting to investors on the achievement of their objectives. To this end, they are required to publish periodic reports on their ESG policies and practices, and on the social and environmental impacts of their activities.
Primonial REIM's SCPI Primopierre awarded the SRI Real Estate label
For all of these real estate acquisitions, Primonial REIM has developed a unique methodology based on a grid of 90 ESG criteria used to evaluate assets. This tool is used for the entire portfolio of the SCPI Primopierre, which has just been awarded the Real Estate SRI label. Created in 2008, the SCPI Primopierre is the benchmark SCPI in its market for commercial real estate. It is aimed at all investors wishing to invest mainly in the office market in the Paris region, with a long-term perspective. Primopierre's SRI strategy aims to continuously improve the portfolio's extra-financial performance (environmental and social).
As with any real estate investment, there is a risk of capital loss due to changes in the real estate market and currency exchange rates. Income is not guaranteed and may vary up or down depending on the performance of the fund. The SCPI is a long-term investment with a recommended investment horizon of 10 years. Liquidity is limited, the management company does not guarantee the resale of units. And as with any investment, past performance is no guarantee of future performance.