Our Property Income Trust for Charities (PITCH) recently celebrated the attainment of a “Green Star” rating in the annual GRESB (Global Real Estate Sustainability Benchmark) survey, ranking the Fund 21st within it’s peer group of 47 funds. This achievement represents considerable progress from our “Green Starter” status back in 2014 and reflects the work we been undertaking to ensure that environmental, social and governance (ESG) considerations are embedded into our investment process and philosophy.
While PITCH improved its score in all aspects, those areas that saw the greatest improvement included: management; risk and opportunities; and stakeholder engagement. The Fund’s lowest score was in performance measurement. This was expected as a large proportion of the PITCH portfolio (81%) is let on an FRI basis, where tenants manage their own utilities. This is a far higher proportion than our peer group (58%). The Fund has chosen to concentrate its efforts in data collection on those properties that are landlord managed, as we can then use this data to help us set targets and improve efficiencies. However, although we collect data for all our managed assets as these account for just 19% of the portfolio our overall coverage, and therefore our score in this area, is relatively modest.
Given this portfolio structure, our approach to ESG considerations has been to adopt a strategy that focuses on identifying those areas where we feel we can make the most difference for our investors, tenants and communities in which we invest. The GRESB aspects where we have performed most strongly are indicative of this approach.
At the heart of our strategy is our belief that we have a fiduciary duty to our clients to consider the impact that ESG will have on the investment performance of our assets and understand the resulting risks and opportunities. Consequently, we have placed a strong emphasis on compliance and the development of clear systems and procedures to implement our ESG policies. These include, but are not restricted to, entity-level risk assessments both at acquisition and at regular intervals throughout the hold period.
Our work in this area has not only been reflected in our above average score in the risk and opportunities aspect but has also placed PITCH ahead of its peer average in implementation and measurement indicating that the Fund is delivering on the intent of its ESG programme.
Alongside our work in this area we also place a strong emphasis on ethical investing and supporting charities, which drives our commitment to social responsibility and community. The PITCH charity award launched last year, where we support our tenants in the work they carry out with charities in their local communities, is one example of this. We are pleased that our endeavours in this area have been recognised in our stakeholder engagement score.
Of course there is still plenty of room for improvement. While this is a good indicator of the progress we have made, we continue to implement new initiatives and hope for an even better score next year!