SRI in real estate
Today, it is difficult to ignore the sustainability of real estate.
Thus, investing responsibly in paper-stone remains possible, thanks to the SRI label that takes into account environmental elements, but not only. Explanations.
Own your primary residence
Faced with the opacity and the number of criteria used by professionals, an investor wishing to determine whether a property pursues a sustainable objective can quickly find himself lost. To help investors in this sustainable investment process, the public authorities (the Ministry of the Economy, Finance and Recovery) launched on October 23, 2020, an SRI label dedicated to real estate funds. It allows investors to identify real estate investments that take into account ESG criteria (Environment, Social and Governance).
The SRI label is awarded for a period of 3 years. It is renewable after verification of compliance with the specifications required by the label, carried out by an accredited independent third-party organization. Labeled funds are audited every year and are likely to lose their label if repeated failures are identified
Thus, beyond financial profitability, more and more SCPIs (Société Civile de Placement Immobilier) are taking into account extra-financial criteria (environmental, social and/or governance criteria) in their real estate acquisition strategy. But SCPIs are not the only ones that can have the SRI label, since SCIs (in the form of Alternative Investment Funds) and OPCIs (Organismes de Placement Collectif en Immobilier) can also claim it.
Good to know : According to the labelisr.fr website, 49 real estate funds had the SRI label at the end of June 2022.
Real estate has a specific SRI label
ESG criteria in physical real estate are at the heart of the label's determination. And even if the real estate sector remains highly regulated in its environmental approach, this is less true for social and governance issues, which may vary according to the different types of real estate assets (office, retail, health, logistics, etc.).
To meet this requirement, the label requires funds to cover the 3 pillars E, S and G in a balanced way by applying eight reporting indicators. Greenaffair details that of these eight mandatory indicators, four of them are imposed as :
- Energy performance.
- Greenhouse gas emissions.
- Mobility or health and comfort of occupants.
- Supply chain management.
The other four criteria remain at the discretion of the management companies, with at least one per pillar E, S and G.
According to the 2021 Observatory of SRI labeling practices for real estate funds (published by ASPIM, OID and Novethic), management companies give priority above all to the fight against climate change (G, 58%). This is followed by services provided to occupants (S, 58%) and biodiversity (E, 50%). In addition, relations with tenants, users and residents (S, 42%) and water management (E, 24%) complete the list. Finally, the contribution to local development (S, 17%) and renewable energy (E, 8%) are the criteria least favored by companies.
Good to know : Primonial REIM France's SRI approach is based on an ESG rating grid specific to each type of asset: offices, healthcare, etc. It includes 90 criteria divided into 7 themes, such as environmental risks or services to occupants. Each theme is weighted to obtain an average score corresponding to the ESG rating of the asset. 100% of Primonial REIM France's acquisitions are therefore subject to an extra-financial rating. Primonial REIM France's label funds have a target rating. It sets the objective to be reached and guides the management of the ESG performance of assets. Assets with a higher rating must be maintained above this threshold. Conversely, those with an insufficient rating benefit from improvement plans including, for example, works, optimization of expenses or technological innovations.