ESG and Sustainability
Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the fund's assets as well as the AIFM's business. Sustainability risks can also impact all other known risk types and contribute as a factor to the materiality of these risk types.
In our risk management system, we consider sustainability risks as sub-factors or aspects of other risk types, particularly in the area of market and counterparty risk, as well as reputational and legal risks in the area of operational risk. These include, for example:
- Environmental risks that may have a negative and value-reducing impact on real estate held as an investment for a fund or serving as loan collateral (earthquake hazards, flooding, radiation risks, electromagnetic or radon concentrations, or other emission pollution, use of fossil fuels);
- Risks to the aforementioned properties on a social level in terms of ensuring basic services (schools, childcare, mobility);
- Ethical or other environmental aspects.
Whether and to what extent sustainability risks influence our investment decisions depends largely on the investment strategy of the individual (sub-) fund. As part of the investment process and depending on the product-specific investment objectives and restrictions, the following measures in particular can be applied to reduce or avoid sustainability risks:
- Careful use of resources at company and project level.
- Creation of energy-efficient and optimized buildings
- Compliance with climate targets and commitment to climate neutrality in real estate projects
- Integration of a holistic corporate governance approach by linking the existing quality, compliance and risk management systems.
In the course of this year RECan Group will also voluntarily commit to comply with and implement the Principles for Responsible Investment ("PRI") endorsed by the United Nations.
Information on whether and to what extent the investment funds we manage and the investments underlying them comply with binding environmental and/or social characteristics, pursue sustainable investments, and take into account the EU criteria for environmentally sustainable economic activities can be found in the respective currently valid issuance document.