ESG

As the voice of sustainable investing in the Asia Pacific, APREA has developed the ESG Guidebook for Real Assets in Asia Pacific to raise awareness about ESG and guide our stakeholders in their journey to sustainability. We believe that capital allocated to real assets can play a meaningful role in the achievement of the sustainable development goals (SDGs), while leveraging growth opportunities in a manner that benefits all stakeholders.

We recognise that the ESG landscape continues to evolve, and this Guidebook lays out the basic foundation to integrate ESG and sustainability factors in how each of us conduct our businesses. Aside from providing a framework that can be used as a basis in establishing a systematic ESG approach, we have included practical ways to build and operationalise an ESG program with effective governance, as well as clear steps to engage and communicate with key stakeholders.

The Guidebook also features case studies among APREA members that illustrate various innovative approaches, that reflect their philosophy and investment styles, and thus, facilitating the exchange of best practices.

The Covid-19 pandemic has accelerated the urgency for hotels and hospitality companies worldwide to act to protect the well-being of the planet, communities, employees and guests, leading to a sharper focus on environmental, social and governance (ESG) initiatives.

While still nascent, the Asia Pacific hotel industry’s commitment to ESG and sustainability initiatives is steadily increasing – a welcome development as the region has the highest concentration of hotel carbon emissions. Rising energy costs – which have increased significantly since the onset of the pandemic – as well as other factors such as the shift in guests’ preferences toward more sustainable tourism and green accommodation, and growing demand for disclosure around climate risk, are accelerating the industry’s focus on sustainability.

These developments are feeding into a trend that CBRE is observing in the hotels sector: green travellers want to stay in green hotels. With environmental consciousness coming to the fore, sustainable design will increasingly come into play, enhanced ESG practices will offer travellers places where they feel comfortable spending their time, and new investment opportunities will be created.

This report examines the key ESG trends shaping the Asia Pacific hotels sector, and explores the key actions that hotel companies, developers and investors can take to effectively integrate ESG initiatives into their business, operations and investment strategies.

This report was originally published in https://www.cbre.com/insights/reports/asia-pacific-report-eyes-on-esg-why-the-asia-pacific-hotels-sector-needs-to-pay-attention

With ESG taking on increased importance globally, the S (social) dimension of ESG has received considerable attention recently. This reflects the need to prioritise the health and well-being of staff and customers, as well as supply chain issues, and equity and diversity issues in the workplace. This article highlights these issues and the major initiatives in the S space now being actively implemented by the real estate industry in Australia and Asia.

Doing ESG Well

Importantly, the real estate industry has clearly recognised the importance of ESG in their activities. This mandate has moved on from “doing ESG” to “doing ESG well”. This sees the ESG agenda actively promoted by the professional organisations in the real estate industry in our area; this includes APREA, ANREV and the Property Council of Australia; check their websites for fuller details.

Specifically concerning the S dimension of ESG, this covers a range of social aspects needed for effective businesses today. This includes staffing aspects, concerning equity, diversity and inclusion issues such as gender equality and cultural diversity to address under-represented groups at all levels in the organisation (ie: staff, senior management, board), as well as staff turnover, retention and pay. Wellness and well-being have also been a focus, around issues such as safe workplaces and staff mental health (particularly during COVID). Many organisations have also developed supply chain codes of conduct, with aspects such as modern slavery issues and fair pay being critically important. This sees many real estate companies giving their historic performance metrics to show they are moving forward in the delivery of these S issues.

All of these S activities are important, as they now play a key role in real estate funds’ decisions on whether to invest in these real estate companies, as well as the real estate companies showing a strong commitment to ESG. This is essential for investors today as ESG takes on increased importance at all levels in our communities. Companies clearly face the risk of being excluded from these investment mandates if they do not actively address these ESG issues.

This guide addresses how the developing issue of Business and Human Rights (BHR) affects property ownership and management industries. Addressing BHR is a way to strengthen cultures of respect, dignity and ethics within our member organizations and mitigate risk.

This Guide provides an overview of the key BHR concepts drawn from the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises (OECD Guidelines). It then applies these concepts to property ownership and management before setting out how to incorporate BHR concerns into your operations. Finally, the appendices provide examples for due diligence and contractual provisions.