Shaping the future means taking action

Environmental, social and governance (ESG) has become an integral aspect of the real estate sector. Alongside location and the return/risk profile, ESG is now the third key factor in making an investment decision. Thus, balancing these three factors in products in order to cater to an investor’s specific preferences is a pivotal task that asset managers face today. INDUSTRIA took an early, proactive approach in addressing and considering ESG standards and strategies, making their implementation a key organisational priority.

ESG criteria at INDUSTRIA

For all three dimensions of sustainability, INDUSTRIA has defined criteria that apply not only to the real estate funds it manages but also to the company itself. In essence, these criteria serve to ensure compliance with the goals set by the German federal government for 2030 – namely, to lower CO2 emissions by 65 percent compared to 1990. In the residential property segment, the S (social) criteria primarily focus on the affordability of housing. INDUSTRIA was an early forerunner in the subsidised housing segment and, through diverse fund structures, has emerged as one of the largest buyer groups in this area in recent years. G (governance) criteria – that is, the basic principles of good corporate governance – have always been an integral part INDUSTRIA’s ethos.

The sustainability of our fund products

All of our fund products which can currently be invested in comply with the ESG requirements laid down in Article 8 of the EU’s Sustainable Finance Disclosure Regulation. In addition, INDUSTRIA has successfully reclassified the majority of its existing funds originally issued as Article 6 funds as per the Sustainable Finance Disclosure Regulation to Article 8 funds, in large part thanks to their strong energy efficiency profiles. As such, around 80 percent of the assets under management now meet the requirements of an Article 8 fund.

E – The ecological sustainability of our funds

The E (environmental) criteria play a pivotal role in our strategy. A look at the overall portfolio reveals that 60 percent of the assets that we manage correspond to an EPC rating of B or higher. The vast majority of newly acquired properties meet the KfW Efficiency House 55 or 40 Plus standards for new builds.

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INDUSTRIA also prioritizes the use of renewable energy sources and innovative technologies when it comes to energy supply. For example, the fund property “The Plus” currently under development in Wolfsburg, Germany, is just one of many being fitted with a state-of-the-art rooftop photovoltaic system and a battery storage system for self-sufficient power generation. For existing assets, energy efficient refurbishments are undertaken where economically viable, and the feasibility of installing rooftop photovoltaic systems is explored.

S – The social sustainability of our funds

As a fund and asset manager, INDUSTRIA is committed to fulfilling its social responsibility. To this end, the company’s funds invest a portion of their capital towards subsidised housing projects. The shortage of affordable housing is one of the most pressing socio-political challenges facing Germany today, especially in metropolitan areas where part of the population struggles to find and secure reasonably priced living accommodations. INDUSTRIA is determined to play a role in alleviating this issue.

G – Governance in our funds

Corporate governance, encapsulating the G criteria in ESG, has always been an integral part of INDUSTRIA’s ethos. Fairness, trust, integrity and equality across all levels and domains form the basis for our collective and business actions.

ESG at corporate level

Our dedication to implementing ESG principles extends beyond the property funds we manage to also making it a key priority at a corporate level. As such, INDUSTRIA has also defined its own internal ESG requirements. In the “E” domain, this means the efficient use of natural resources, e.g. through saving paper, preferring rail travel over flying and carpooling wherever possible. We also encourage our employees to use public transportation by subsidising JobTickets. Moreover, INDUSTRIA had pro-actively enabled its employees to work from home in justified cases even before the COVID-19 pandemic.

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In the “S” domain, INDUSTRIA attaches great importance to work-life balance and the health and well-being of its employees. We also support charitable projects such as the “Business meets Charity” series of events, through which we have been collaborating with our employees, customers and business partners to annually promote one project or association committed to a social cause for over ten years now. In addition to this, we provide financial backing for our employees’ voluntary work in various associations through our “INDUSTRIA hilft!” initiative.

Hot topic: examining the requirements for CSRD-compliant sustainability reporting

INDUSTRIA, too, is already actively examining the requirements for potential sustainability reporting and reviewing how they can be implemented in line with the provisions of the Corporate Sustainability Reporting Directive (CSRD). Akin to financial reporting, sustainability reporting should concentrate on providing meaningful, relevant and assessable information for its stakeholders. INDUSTRIA has already taken the first step in this regard by conducting a double materiality analysis last year.