In January 2022, just 18 months after its launch, 54 French funds display the SRI (Socially Responsible Investment) real estate label.
In their report published last March, the OID, ASPIM and Novethic specify that in 2021:
Savers invested €3 billion in SRI real estate funds. This amount represents 28% of the overall collection of general public funds.
Their overall performance is comparable to that of non-labeled real estate funds: Identical performance for SRI general public OPCIs compared to the market average (4.4%) / Distribution rate of SRI SCPIs at 4.43% compared to 4.45% for the entire market.
There is therefore real enthusiasm for this label dedicated to funds that invest in the best-performing real estate assets and/or implement good environmental and social practices for the operation of their assets. A growing number of SRI fund managers are choosing iQspot to meet the requirements of this label.
Why? This is what we invite you to (re)discover in this article, by reviewing all of its conditions for awarding it and how iQspot actively contributes to meeting them.
In this article, we invite you to answer the following questions:
- What are the requirements of the SRI real estate label?
- Which indicators should you choose for your SRI real estate label?
- Who labels SRI real estate funds?
- For how long is the label issued?
What are the requirements of the SRI real estate label?
The ISR label, owned by the French State, is aimed at:
- Both funds investing in the most recent and most efficient buildings,
- And those investing in improving the ESG performance of the buildings in the portfolio.
The label places particular emphasis on the management process during the operating phase and on stakeholder engagement.
In concrete terms, to be eligible for the label, the fund management company must:
1 | 2 | 3 | 4 | 5 | 6 |
Define the objectives sought by the fund | Establish an analysis methodology | Indicate the ESG criteria for portfolio construction and management | Engage Stakeholders | Informing investors | Evaluate the positive impacts of the approach |
We propose to detail these different points below, specifying the contribution of iQspot in their implementation.
1. Definition of the objectives sought by the fund
The fund must communicate the objectives it seeks through the choice of its ESG criteria.
2. Implementation of an analysis methodology
The fund deploys the necessary means and tools to analyze the ESG performance of assets.
→ iQspot offers a unique system for collecting and reporting energy, water, waste consumption, as well as comfort parameters. With iQspot, your fund benefits from a reliable system for collecting, monitoring, processing and analyzing extra-financial data. You thus meet the label’s requirement on this point, namely:
- “Provide reliable internal or external means to conduct your analysis”
- And “demonstrate a real effort to analyze and understand the information you have”.
3. Establishment and review of ESG criteria for portfolio construction and management
The fund specifies how it takes into account the results of the ESG analysis in its investment decisions and management processes.
It must then report each year:
- An inventory of its buildings including their ESG assessment,
- The minimum ESG assessment retained in the asset acquisition strategy and objectives for buildings below this standard.
- And if the fund holds more than 80% of buildings above the standard, a demonstration of the consistency of the minimum ESG assessment.
The results of the ESG strategy must finally be measurable, using predefined objectives, and studied over 3 years.
→ iQspot provides a global view of the portfolio, annual reports for each building, and allows the configuration of objectives whose achievement is measured in real time.
4. Stakeholder engagement
The fund implements the necessary means and tools to engage tenants, building managers and construction service providers in its approach.
→ The data collected on the iQspot platform is accessible to all stakeholders defined in the application: from the owner to the tenant, including administrative and technical managers (Property, Facility Managers, Maintainers). A customizable alert system makes it possible to notify the right people in the event of a consumption drift or threshold exceedance. Our Energy Managers advise Asset and Property Managers on the actions to be taken to improve performance.
5. Investor information
The fund communicates its strategy and the results of its implementation to investors in a clear and transparent manner. It sets up a suitable system to monitor compliance with its commitments.
Thus, a report on ESG management must be communicated to investors on at least an annual basis. This report includes at least, in a contextualized manner, the ESG assessment of:
- The 5 best-performing assets,
- The 5 worst-performing assets
- And the 5 most important assets (in value).
The fund must also provide evidence of a risk management policy and a control organization relating to the ESG policy.
→ By providing the fund with reliable, comprehensive and consistent data, iQspot ensures the reliability of the information communicated to investors. The automation of data collection also ensures its quality and provides evidence of a control and risk management organization.
6. Evaluation of the positive impacts of the approach
The fund sets up a measurement and monitoring system to assess the positive impacts of the strategy implemented. It must provide evidence of monitoring and the results obtained in terms of performance on the Environment, Social and Governance (ESG).
The fund must monitor at least 8 performance indicators, including 4 mandatory and 4 optional (see details below).
→ Thanks to remote reading of energy consumption, automatic calculation of GHG emissions and monitoring of comfort indicators (hygrothermal, noise pollution, air quality), the iQspot solution allows you to monitor 3 of the 4 mandatory indicators in real time. It also allows you to monitor several optional indicators, within the 3 pillars E, S and G.
Which indicators should be chosen for SRI real estate labeling?
The 4 mandatory impact indicators
The SRI real estate label provides for 4 mandatory impact indicators:
- The “Energy Performance” indicator (Pillar E)
For example: Energy consumption in final energy (or primary energy) per m² and per year - The “Greenhouse Gas Emissions” indicator (Pillar E)
For example: GHG emissions in kgCO2eq per m² and per year, on scopes 1 and 2, of common and private areas. - The “Mobility” or “Health and comfort of occupants” indicator (Pillar S)
For example (mobility): Share of assets located less than 500m from public transport; Share of assets equipped with charging stations for electric vehicles or bicycle storage, etc.
For example (health and comfort of occupants): Air or water quality indicator; Share of assets accessible to people with reduced mobility… - The “Supply chain management” indicator (Pillar G)
For example: Share of service provider contracts with an ESG clause; Share of work covered by a responsible construction site charter…
→ iQspot provides evidence of the monitoring of indicators 1, 2 and 3 (occupant health/comfort section), enables them to be improved and maintained over time.
iQspot therefore covers 3 of the 4 mandatory impact indicators.
Optional impact indicators
In addition to the 4 mandatory indicators, the fund must propose at least 4 other impact indicators.
They are left to the fund’s free choice, with at least 1 indicator in each pillar E, S or G.
In addition, the label imposes a relative weighting of the pillars, the number of respective indicators of which must represent:
- Between 30% and 60% of the total indicators for the Environment pillar (average observed 43%);
- Between 20% and 50% for the Social pillar (average observed 33%);
- And between 20% and 30% for the Governance pillar (average observed 24%).
Below is a list of optional indicators often chosen by funds. And in bold, those monitored and improved by iQspot.
Environmental Indicators
Environmental certification indicators: Share of Breeam In-Use* / HQE Exploitation / etc. certified assets …
Water management indicator: Water consumption in liters per m² per year,
Waste management indicator: Monitoring of waste production,
Biodiversity indicators: Share of assets with a plot of land planted with more than 10%; Urban sprawl indicator …
EnR indicators: Share of renewable energy; Local production of EnR in final energy per sqm per year.
*To find out how iQspot allows you to obtain your Breeam in-Use certification, and in most cases to earn a star, click here.
Social Indicators
- Indicators of services provided to occupants: Share of assets offering services (to be defined) close to or within buildings; Share of assets connected to fiber or offering wifi access; Share of Well / WiredScore / etc. certified assets.
- Indicators of contribution to local development: Rent discount; Share of assets hosting a socially useful activity …
Governance Indicators
Climate change resilience indicators: Share of assets subject to resilience audit; Share of assets assessed with low and medium risks according to a platform…
Tenant relations indicators (/users, /residents): Share of tenants made aware of eco-friendly actions; Share of tenants who have signed an environmental annex…
→ iQspot allows you to propose and monitor at least 4 optional impact indicators.
Its deployment also actively promotes those focused on asset certification.
Who labels SRI real estate funds?
Currently, three certification bodies are accredited by COFRAC (French Accreditation Committee) to manage the audit process required to label an SRI fund: Afnor Certification, Deloitte and EY France.
The chosen body audits the candidate fund to determine whether it meets the labeling criteria.
To do this, it:
- Analyses the regulatory documents, the portfolio statement and the fund management report,
- Conducts interviews with the fund’s managers to explore certain issues in more depth.
At the end of this process, it draws up an audit report with its conclusions and comments on any shortcomings. It is the body that:
- Decides independently whether or not to grant the label,
- And informs the Ministry of Economy and Finance of the fund’s labeling, for its inclusion on the official list.
For how long is the SRI real estate label issued?
The Ministry of Economy and Finance grants the SRI real estate label for a period of 3 years, renewable.
During this period, and to ensure that the fund complies with the requirements of the label, intermediate controls are scheduled.
iQspot, your fund and asset labeling solution!
iQspot is a great tool for implementing and monitoring asset performance on major ESG themes: energy, water, waste, occupant comfort, sharing information between stakeholders.
The ideal solution to give substance to your fund labels (SRI real estate, GRESB, etc.), but also to all your asset certifications (Breeam in-Use, HQE Exploitation, etc.) and to produce all your regulatory reports (Tertiary Eco-Energy Device, DPEF, etc.).
Would you also like to benefit from it? Contact us!
