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Sustainability Statement

• Chief Executive Statement
• Introduction
• Our Principles for Sustainable Investment
• Our Sustainable Development Action Framework
• Governance and Accountability

Chief Executive Statement

There can be no doubt that the world around us is changing, and possibly more rapidly than at any time in our history.

It is proven that the balance of political and economic power shifts over periods of time and this has a material impact on the global economy through the distribution of wealth and the influence it affords. The supply of energy and natural resources which fuel our economy is becoming increasingly uncertain and volatile and the implications of this can’t be ignored. Perhaps above all, global climate change poses a fundamental threat to our way of life and is now progressively impacting on livelihoods and economies across the world.

Individually and together, these socio-political, economic and environmental changes have profound implications for all real estate assets. The recent and rapid emergence of the ‘sustainability’ agenda within the real estate industry reflects the magnitude of risk that is anticipated for all the asset classes.

However, these macro issues not only highlight the responsibility that generations have for those that follow, it also offers opportunity for businesses that embrace and respond positively to the challenge of sustainable investment and development.

At Moorfield Group, it is this sense of corporate responsibility and opportunity which motivates and characterises our commitment to sustainability. Our awareness of these key global pressures implies not only an understanding of the moral responsibility needed to safeguard the environment, but also the opportunity to continue to deliver outstanding returns to our investors through the rigorous assessment of emergent trends and their impact on the asset classes. We must be sufficiently educated in this area to secure early-mover advantage as the industry progresses towards a more sustainable future.

We are acutely aware of our fiduciary duties. Namely, our responsibility to deliver consistent and outperforming levels of investment returns for our investors. Hence, our commitment to sustainability is not a profit-less crusade. It is based on a diligent approach to managing risks to investment performance, such as the risks of accelerated depreciation and premature obsolescence of assets that will fail to meet occupier expectations and become non-compliant with emerging regulation and fiscal policy. There is nowhere to hide from these issues as they here with us today, and increasing exponentially.

This Statement sets out our corporate approach to sustainability.

Marc Gilbard, Chief Executive

August 2009

Introduction

Our corporate strategy is to acquire and create real estate, real estate related opportunities and asset rich companies in the UK where active corporate, asset and financial management is expected to enhance both income and capital returns.

To this end, our activities span most areas of investment and development of real estate and related opportunities, all of which are underpinned by a combination of analytical rigour and opportunistic endeavour.  Our investment approach is predicated on a thorough appreciation of long-term trends and the early identification of emergent markets and asset classes.

It is only natural, therefore, that Moorfield Group should position itself to respond proactively to the challenges and opportunities of the sustainability agenda.  

This Sustainability Statement formalises the principles which will underpin our approach to sustainable investment and development, through which we will seek to engage positively with our stakeholders (investors, occupiers, service providers etc) to address economic, social and environmental risks and opportunities across all aspects of our investment and development processes and corporate operations.

The business case for sustainable investment and development is compelling. Indeed, it is unavoidable for those who understand that financial performance is inextricably linked to the environmental and social capital on which all economic activity inherently relies.

Ultimately, we believe that the approach set out in this Sustainability Statement is the optimal approach to protect and enhance the value of our assets.

Our Principles for Sustainable Investment

The basis of our approach is to embed the principles of sustainability into each stage of our ‘Investment Process’ and across all of our corporate operations.  

We believe that the environmental and social impacts of our investment and development activities are inextricably linked to the economic performance of our assets. Furthermore, we believe that the strength of this symbiotic relationship will become greater over time as occupier demand for climate adapted real estate grows and as environmental regulation and related fiscal policy further targets real estate and the built environment. 

Influenced in particular by the Principles of Responsible Investment advocated by the UNEP Finance Initiative and The Global Compact[i], we have adopted the following core principles across our real estate and related activities:

• We will incorporate sustainability risk and opportunity into our investment analysis and decision-making processes.
• We will endeavour to incorporate the guiding principles of sustainability into development and refurbishment projects.
• We will be proactive owners and incorporate sustainability measures into our ownership policies and practices.
• We will engage with our employees, investors, tenants and other stakeholders on sustainability issues and their effects.
• We will use any procurement influence to improve the sustainability performance of our suppliers, and the products and services which we buy.
• We will avoid or minimise adverse impacts arising from our corporate operations and will seek to deliver positive benefits wherever appropriate.

To achieve adherence to these overarching principles, a number of specific measures will be integrated into the discreet stages of our Investment Process, as shown in the diagram below.

In addition to the implementation of these measures through our own investment and corporate activities, we hope that our adopted core principles will serve to encourage our stakeholders to improve the sustainability performance of their own operations. 

Our Sustainable Development Action Framework

The publication of this Sustainability Statement is the first key milestone in our corporate response to the sustainability agenda. We recognise that there are a number of specific actions required to put in place the systems and skills necessary for a sustainable investment and development practice to be integrated across our portfolio.

Accordingly, this Statement will be supported by our ‘Sustainable Development Action Framework’. The Framework will set out a range of generic and specific asset class actions.

Actions will be agreed and prioritised in response to intelligence gathered on the particular risks and opportunities facing the real estate sector generally and the specific asset classes in which we have, or may have, direct commercial interest. In particular, the actions will be prioritised to respond to:

• The extent to which individual asset classes are likely to be exposed to reputational, compliance, and value risk, together with the requisite ethical drivers for sustainable progression both now and into the future;
• The principal social, economic and environmental impacts arising from our investment, development and corporate activities, and in particular, the commercial implications of these on: asset values, income growth, development costs, and corporate reputation and competitiveness.

Our initial priorities are to engage with our stakeholders by informing them of our commitments and aspirations in relation to sustainability, and to analyse the extent to which individual assets within our portfolio are exposed to sustainability risks or positioned to take advantage of related opportunities. From this baseline position, we will then develop appropriate strategies, underpinned by measurable objectives and targets, to reduce risk exposure and optimise sustainability performance at the asset and portfolio level.

Governance and Accountability

In order that the principles established in this Sustainability Statement are honoured, and that the actions set out in the supporting Sustainable Development Action Framework are implemented accordingly, we have put in place the following governance arrangements and procedures:

• Marc Gilbard, Moorfield Group Chief Executive, has overall responsibility for ensuring that our sustainability principles are integrated across our investment, development and corporate practices.
• We will establish a series of management and performance targets, together with lead responsibilities, to ensure that we can measure our progress and drive continuous improvement.
• We will put in place an active stakeholder engagement programme to communicate this Sustainability Statement to all of our employees, our investors, our tenants, our banks, our advisors and our suppliers.
• The Sustainability Statement and the Sustainable Development Action Framework will be subject to comprehensive and independent review on an annual basis.

[1] United National Environment Programme (UNEP) Finance Initiative & The Global Compact (2008) “Principles for Responsible Investment” (http://www.unpri.org/files/pri.pdf)

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