Highlights performance on sustainability 2021
Retained GRESB score of 95 points and retained GRESB 5-star rating;
100% of assets are BREEAM-NL certified; 98.3% have a minimum of Very Good rating and 67.7% of invested capital have a BREEAM-NL Excellent rating;
99.7% of portfolio has a green label (98.3% A label), with an average EP2 of 136;
Total of approx. 968 kWp solar power installed by year-end 2021;
1.8% like-for-like reduction in energy consumption; 10.5% increase in GHG emissions;
73 rental contracts with a sustainability clause (green lease);
100% of construction sites registered under the Dutch Considerate Constructors (Bewuste Bouwer) scheme;
Coverage of 100% AEDs within six minutes walking distance;
Integrated the Paris Proof roadmaps into multi-year maintanance budgets.
Focus on sustainability
The Fund supports the United Nations Sustainable Development Goals (SDGs) and actively support three SDGs, as presented below.
Highly sustainable Fund
The built environment consumes around 40% of the world’s energy and accounts for up to 30% of the world’s annual GHG emissions. Additionally, the building industry is a large user of raw materials. As a global real estate investor, Bouwinvest feels it is part of its responsibility to help find solutions. To contribute to a CO2-neutral, sustainable, circular, resilient and healthy living and working environment, and to enhance stakeholder value by investing in sustainable real estate. Bouwinvest is convinced that its approach reduces risk, ensures stable client returns in the long term and keeps its real estate assets and portfolios attractive.
Environmental, social and governance (ESG) factors will continue to play a major role in the Fund's investment strategy. The Fund is targeting a net-zero carbon, nearly energy-neutral and resilient portfolio before 2045 (approx. 70 kWh/m2 per year). This will include an analysis of asset-level climate risks, including a plan of how to mitigate these risks. The Fund has set out clear targets for the reduction of its environmental footprint and improving its positive social impact.
2021-2030: A year-on-year 5% reduction in GHG emissions for the total portfolio (general and tenant consumption);
2030: The portfolio has an average energy label A (energy index <1.0);
Furthermore, the Fund devotes attention to the Dutch policy position on transitioning towards a circular economy in 2050, with the focus on the use (and reuse) of resources. The real estate industry needs to be transformed into a circular ecosystem. The Fund is committed to circular building projects.
The Fund also performed data-driven analysis related to physical climate risks, such as heat stress, flooding, heavy rainfall and drought. For the total portfolio, the Fund analysed what the impact of those risks is on its assets based on location. In 2022, the Fund will continue to analyse these risks based on asset characteristics and focus on how these risks can be mitigated.
GRESB scores 2021
In 2021, the Fund retained its GRESB 5-star rating and also retained its overall score of 95 points. The Fund continued to focus on performance to retain its points. The Fund will continue to focus on both coverage of data and on reductions to improve its score next year. Other opportunities for future improvements are related the reuse of water.
Investing in sustainable real estate
The Fund uses BREEAM to measure and assess the overall sustainability of its buildings. The BREEAM methodology covers a wide range of subjects; from energy to transport, from vegetation and materials to indoor climate quality. This makes it a very useful tool for the implementation of sustainability measures at different levels within the Fund. The target for 2021 was to achieve a minimum of a BREEAM-NL Very Good rating for every asset in the portfolio. The Fund almost met its target last year, as 98.3% of the portfolio assets have at least a BREEAM-NL Very Good rating; 67.7% have a BREEAM-NL Excellent rating. The Fund retains its target for 2022.
The figure below shows all the certificates obtained per asset.
BREEAM scores (% of lettable floor space)
The Fund retained its targets in the 2022-2024 Fund Plan and is aiming to have and hold 100% certified assets with BREEAM-NL Very Good or better labels at both asset and management level by the end of 2022, while it has so far focused on certification at asset level.
Given the current performance, ESG targets will increasingly focus on making the portfolio more Paris Proof, increasing user health and well-being and managing physical climate risks.
Another target related to the Fund's sustainability at asset level was to achieve a 100% green portfolio (EPC label A, B or C) in 2021 and a minimum of 80% label A or better. The distribution of energy labels in the portfolio is shown below. Central Park in Utrecht was awarded an A-label upon completion in 2021, while WTC Rotterdam was also awarded an A-label last year. The prior label of WTC Rotterdam was an E-label. As a result, 98.3% of the Fund's assets now have an A-label.
Distribution of energy label by floor space (m²) in %
Bouwinvest committed itself to the Paris Proof commitment of the Dutch Green Building Council (DGBC). To become net-zero
carbon (Paris Proof) before 2045, the Fund has drawn up a roadmap to realise this ambition. In 2021, the Fund implemented the technologies, measures and costs related to the implementation in the Fund's strategic maintenance plan for the coming years.
Energy consumption and GHG emissions
In 2021, the Fund's energy consumption declined by 1.8% (2020: -13.6%) on a like-for-like basis. The GHG emissions
increased by 10.5%. This decline in like-for-like energy consumption was largely due to Covid-19, as a large majority of people
worked from home last year. The target for energy reduction is now set at 4% per year on average to bring this target in line with (international) climate goals (reduction of 95% of CO in 2050 compared with 1990).
On-site solar panels (kWp)
Renewable energy production
The Fund continued working on renewable energy production last year. The target was to install at least 1,000 kWp of solar panels by the end of 2021. At the end of 2021, the Fund had installed 968 kWp of on-site solar panels. Due to the installation of new solar panels on Central Park the total kWp increased by 82 kWp.
In 2021, the Fund recalculated its targets for the reduction of its environmental impact in the period 2022-2024:
Renewable energy: increase percentage of renewable energy to more than 1,000 kWp;
Energy consumption: average annual reduction of 4% as from 2022;
GHG emissions: average annual reduction of 4% as from 2022;
Water use: average annual reduction;
Waste: increase recycling percentage.
Enhancing stakeholder value
Bouwinvest does its utmost to optimise long-term alliances with all of its stakeholders. It has methods and means in place to understand, meet and respond to its stakeholders' needs and to engage with the issues that its stakeholders find important. In addition to this, Bouwinvest takes an active approach to raising environmental, social and governance awareness throughout the real estate industry, partly through membership of various real estate sector organisations, such as the Association of Institutional Property Investors in the Netherlands (IVBN) and the Dutch Green Building Council.
Improving client services and communications
Bouwinvest keeps its clients up to date on the Fund's activities and performance, as well as on the Dutch real estate market and important topics such as ESG-related developments (e.g. climate risk). In 2021, in addition to formal meetings such as the Annual Meetings of Shareholders, Shareholders' Committee meetings and quarterly conference calls to discuss the quarterly reports, Bouwinvest organised a separate client meeting on the topic of 'climate risk'. Moreover, Bouwinvest kept its clients updated via press releases and the 'Real Value for Life' newsletter.
In early 2021, Bouwinvest conducted a client survey among its investors resulting in a score of 7.1 (out of 10) for client satisfaction. This survey provided the organisation with a lot of valuable feedback. One of the outcomes was that the Fund documentation needed to be updated. In a constructive dialogue with all shareholders, Bouwinvest modernised all its fund documentation in 2021. Having made improvements in - among other things - liquidity, more say for the Advisory Committee and modern liability clauses, the Fund’s terms and conditions are now completely up to date. The new terms and conditions were adopted at the General Meeting of Shareholders on 14 September 2021. The new Fund documentation came into effect on 1 January 2022.
These and other actions will help Bouwinvest improve its client services and communications. Bouwinvest's ultimate aim is to achieve a steady long-term client satisfaction score of 7.5 (out of 10). In the second half of 2022, the organisation will conduct another client satisfaction survey to check if the various improvement initiatives have indeed improved client satisfaction.
In the fourth quarter of 2021, the Fund received the results of its annual tenant satisfaction survey. The average satisfaction score for the quality of the Fund’s assets remained 7.3 (7.3 in 2020) and the appreciation of its property management scored 6.9 (6.8 in 2020). Both the score for the quality of the assets and the overall average are now in line with the Fund’s target of >7.0. Together with the external property managers the Fund will draw up a plan to achieve a score of >7.0 for the services in this area.
The Fund constantly initiates new efforts and projects to maintain and improve satisfaction. Many of these projects are related to health and well-being, engagement and response time to tenants' requests.
The Fund encourages its tenants to be more sustainable by including standard green lease clauses in its lease contracts. These embed the intended cooperation between the Fund and tenants to improve the sustainability of the Fund's office assets. The Fund prefers to supplement these clauses with concrete agreements, such as access to data on energy use and parameters on joint investments in energy-saving measures. Despite a certain level of reluctance on the part of tenants, in 2021 the Fund managed to increase the number of green leases it closed. The Fund is currently working on increasing the number of green leases even further by formulating the agreements more concisely and by offering tenants concrete tools to help them reduce their energy consumption and costs.
The Fund has so far signed 73 green lease agreements with tenants that include clauses related to cooperation on improving sustainability (total number of leases is 219). Together with the Fund’s external property manager, the Fund has drawn up a new standard for green lease agreements, which is now a standard appendix to every new lease. This includes clauses related to collective sustainability and efficiency goals for both landlord and tenants, making any improvement of sustainability a joint effort. Last year, the Fund analysed what the objections of tenants are related to the green leases to improve the content and structure. The Fund has also actively engaged with tenants to convert current agreements into green leases.
The target for 2021 was to have a sustainability clause included in 20% of all rental contracts. The Fund had surpassed this target at the end of 2021, as 33.3% of all rental contracts now includes a sustainability clause. The aim is to achieve that 50% of all rental contracts are green leases by the end of 2022.
Bouwinvest takes an active approach to raising environmental, social and governance awareness throughout the real estate industry. Bouwinvest encourages its partners to enhance their sustainability performance. Bouwinvest's focus is on health and safety at construction sites, active participation (memberships) in industry associations and community programmes. To further improve the climate for real estate investments, Bouwinvest is an active member of boards and committees of sector, industry and cross-disciplinary networks such as NEPROM, IVBN, Holland Metropole, DGBC, INREV and ULI.
All the construction sites related to assets in the Office Fund are registered under the Dutch Considerate Constructors Scheme (Bewuste Bouwer). This ensures that the contractor deals with the concerns of local residents and addresses safety and environmental issues during the construction phase.
The target was to have more than 75% of its construction sites registered under the Considerate Constructors Scheme by the end of 2021. At the end of 2021, the Fund was more than on track, as 100% of its construction sites were registered under the Considerate Constructors scheme.
Bouwinvest was the first company in the Dutch real estate investment sector to contribute to the establishment of a national AED (automatic external defibrillator) network, which it is estimated could save up to 2,500 lives every year in the Netherlands. The use of an AED offers the highest probability of survival within the first six minutes after a heart attack. In 2021, the Fund continued focusing on the installation of AEDs. The Fund's target for the end of 2021 was to give all tenants and communities access to an AED within six minutes walking distance. At the end of 2021, 100% of the Fund's tenants and communities had an AED available within six minutes walking distance.