Highlights performance on sustainability 2022
Green label (A/B/C)
97.2% (84.0% A-label)
98.6% (87.4% A-label)
Floor space BREEAM certified
BREEAM-NL In-Use Good or better score
Solar power installed
Decrease in GHG emissions
Rental contracts with sustainability clause
Construction sites registered under Considerate Constructors scheme
Coverage AEDs within six minutes walking distance
Promoted ecological and social characteristics
Last year, the Fund developed the ESG Framework, which explicitly defines all elements related to ESG for the Fund. The driver for the development of the ESG Framework was to improve the structure of the Fund’s ESG efforts, enabling the Fund to integrate ESG in decision making and to structurally manage and monitor all efforts, enabling the Fund to report in a transparent way. The framework also provides the basis for the disclosures required under the new Sustainable Finance Disclosure Regulation.
Part of the SFDR requirements is the periodic disclosure in which the Fund reports on its' promoted environmental and/or social characteristics. The periodic disclosure can be found in the enclosures.
Building a future-proof and sustainable portfolio;
Reducing environmental impact;
Liveable, affordable, attainable & inclusive places where people want to reside – now and in the future;
Contributing to healthy, safe and responsible operations.
In addition to the ESG objectives to which the fund wants to contribute, the ESG Framework takes into account ESG risks relevant to the Fund to minimise the negative impact the Fund's portfolio has on society and the environment.
1. Building a future-proof and sustainable portfolio
Above-average sustainable fund
In 2022, the Fund retained its GRESB 5-star rating. The Fund achieved a score of 88 points, two lower than last year. To retain a GRESB 5-star rating this year, the Fund will focus on improving the score on tenant data coverage of waste and water. On these performance indicators, the Fund scored less than its peer group. And of course the Fund will have to ensure that it continues to score highly on the other indicators.
GRESB score 2022
In the latest UN PRI benchmark of 2021, the Fund scored 95 points (5 stars) on Direct – Real estate. The results have been published during 2022.
Above-average sustainable buildings
Sustainable building certificates enable the Fund to show where it is in terms of sustainability at asset level and how far it still has to go. The Fund uses internationally accepted sustainability certificates such as BREEAM to measure and assess the overall sustainability of its assets. Certificates measure criteria that go beyond legislative requirements and provide the Fund with instruments to encourage more responsible tenant behaviour, such as cutting waste and reducing energy consumption.
The Fund's goal was to obtain 100% insight into its assets' sustainability performance, to have 100% BREEAM-NL In-Use certified shopping centres and to have 100% of its assets certified as BREEAM-NL In-Use Good or better at management level by the end of 2022. In addition, benchmarks help the Fund to make informed business decisions to mitigate environmental, social and governance risks and enhance its long-term returns.
By year-end 2022, the Fund had obtained BREEAM labels for 100% of its portfolio. The Fund saw a slight decline in the percentage of BREEAM-NL Good certificates to 79.1% (2021: 83.8%), against an increase in BREEAM-NL Very Good certificates to 12.1% (2021: 10.4%). This means that the improved coverage of BREEAM-NL In-Use certified shopping centres has led to a slight reduction in the percentage BREEAM Good or Very Good certificates to 91.2% (2021: 94.2%). This is mainly due to the disposal of three assets with a Good certificate. The Lijnbaan asset in Rotterdam and three assets in Eindhoven which the Fund acquired in 2022 obtained a Pass certificate. Armed with the BREEAM improvement plans, the Fund will now take action to improve these assets in the coming plan period.
In the coming year the Fund will take steps to achieve the target of 100% BREEAM-NL In-Use Good or better for all assets in the portfolio and maintain a coverage of 100%.
BREEAM scores shopping centres (% of standing lettable floor space)
2. Reducing environmental impact
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 2022, the Fund incorporated the technologies, measures and costs in the Fund's strategic maintenance plan for the coming years.
Combatting Climate Change: source of energy
In 2022, the Fund realised an increase in energy consumption of 3.6% (2021: -39.9%) on a like-for-like basis. The GHG
emissions decreased by 30.4% (2021: -77.4%). The increase in energy consumption is mainly related to the post pandemic year, while the decrease of GHG emissions is due to the focus of making assets more sustainable, which results in a lower gas consumption.
In 2022, The Fund reported 26.4% of its assets as free of natural gas (in m2). This was a reduction of 2.3% in comparison with 2021. The Fund expects a faster increase in assets free of natural gas in 2023, partly due to a growing number of tenants who are switching to 100% electric technical installations. The Fund closes green leases with all new tenants, which means that the rental space will be delivered without a gas connection.
In 2022, 100% of the electricity the Fund purchased was CO2 emissions free (scope 2), as it was in 2021. In 2023, the Fund will focus on reducing its electricity use and enlarge the share of renewable energy.
The Fund reduced the average energy intensity by 4.8% to 225.7 kWh/m2 (237.1 kWh/m2 in 2021). This is in line with the targeted reduction of an average of 3% per year. The results shown are based on the information from the energy labels of all the retail spaces. In the coming years, the Fund will make a major effort to report on the basis of actual energy consumption. To do this, the Fund needs to increase the data coverage of the energy use of its tenants (53% in 2022).
Renewable energy production
In 2022, the Fund realised the targeted capacity of 1,000 kWp on-site solar power. Due to the delivery of the installations on six supermarkets, the Fund added a capacity of 711 kWp, to achieve a total of 1,060 kWp (2021: 349 kWp).
In 2023, the Fund aims to continue to expand the number of solar panels by 500 kWp to a total of 1,500 kWp. This target is based on four feasibility studies with a positive outcome. The Fund will focus on the execution of these projects, located in Gouda, Ede, Best and Tilburg. Furthermore, the Fund will start seven new feasibility studies in 2023, to secure its progress on expanding the share of renewable energy within the Fund.
The number of assets that qualified for a green energy label declined slightly to 92.2% in 2022 (2021: 98.6%). At the end of 2022, 84.9% of the portfolio had an A label (2021: 87.5%). This development is due to disposal of assets with a relatively large number of green energy labels. The Fund's goal was to obtain A labels for 95% of the portfolio by the end of 2022. The Fund has not realised this target yet, despite the fact that improving the quality of the leased spaces has constant point of attention for the Fund. While energy labels will be updated in 10 years’ time, the Fund cannot provide any actual insight into the impact of these improvements. The Fund will therefore maintain the targets it has set, but will take longer to achieve these goals (2025).
Combatting Climate Change: Energy efficiency of buildings
The Fund retained a share of 42% of green leases in the portfolio, above the target of 30% for 2022. These lease agreements incorporate sustainability clauses, with the aim of increasing and enhancing the information exchange between the Fund and its tenants. This in turn creates opportunities for combined efforts to improve environmental performance. Combined with the installation of smart meters at tenant level, the Fund sees this as the first step towards more far-reaching green leases in the future. In 2023, the Fund will tighten these contracts further. The conclusion of a green lease is a hard condition for every new rental contract the Fund concludes.
Distribution of energy label by floor space (m²) in %
Free of natural gas (% m2): 100% by 2045
CO2 emissions in kg CO2 m2 of purchased energy (scope 2): Annually no scope 2 emissions (electricity)
Average energy intensity (kWh/m2/yr ): ≤93 kWh/m2/yr in 2045
3. Liveable, affordable, attainable & inclusive places where people want to reside - now and in the future
Bouwinvest does its utmost to optimise long-term alliances with all its stakeholders. The organisation 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.
Client services and communications
Real estate markets are remarkably dynamic, so Bouwinvest has to be responsive to internal and external news, as well as
trends, risks and developments that could influence investments in real estate. Bouwinvest is clear on its investment strategies
and is dedicated to demonstrating its ability to meet or exceed its clients’ expectations, by offering investment opportunities,
services and market data related to existing and potential new investments.
Bouwinvest actively invests in improving its reputation because this generates more trust and loyalty among clients, chain partners, tenants and employees. As a financial service provider, Bouwinvest benefits from a strong reputation because this has a positive impact in terms of attracting investors, making new real estate investments and the recruitment of new employees. Bouwinvest conducts a reputation survey every two years to determine how its various stakeholders perceive the company. This includes issues such as satisfaction with services and products, as well as leadership shown and performance measured in financial and social returns.
For its most recent survey, Bouwinvest consulted a number of stakeholder groups. The survey consisted of two parts, a quantitative survey among employees and tenants and a qualitative survey among stakeholders such as clients, prospective clients, commercial tenants, developers and property managers. The qualitative survey used interviews to retrieve steering information on things that Bouwinvest does well and where there is room for improvement. Stakeholders also give an overall reputation rating.
The survey was conducted in 2022, and the results were processed in the first quarter of 2023. The average figures from the qualitative and quantitative survey cannot be combined, as they use different survey methodologies. The average score in the qualitative survey was a 7.8.
Product accountability: Tenant satisfaction
In a dynamic retail environment, it is important to stay in touch with tenants. This contact gives the Fund insight into their daily business activities, and developments and trends in the retail industry, but also into the potential improvements in its assets. It provides relevant information that can be used in the management of the Fund.
The Retail Fund conducts a bi-annual tenant satisfaction survey, which provides insight into the satisfaction of tenants and highlights potential improvements. Despite the difficulties in the retail market, the Fund scored 6.5 for the quality of the assets and 6.3 including satisfaction with the Fund’s property management in the 2021 survey. These scores were largely the same as the outcome of the 2019 survey (6.4 and 6.3 respectively). The survey response was lower, with 180 participants in 2021 (38%) compared with 230 in 2019 (45%). In the circumstances, the Fund feels quite positive about the results. Of course the scores will be used to initiate improvements to the Fund's services and assets. Finally, the Fund’s target is to obtain an overall score of 7.0.
The Fund takes an active approach to raising environmental, social and governance awareness throughout the real estate industry. The Fund encourages its partners to enhance their sustainability performance. The Fund focuses on: health & safety at construction sites, active participation (memberships) in industry associations and community programmes. To further improve the climate for real estate investments, the Fund is an active member of boards and committees of sector, industry and cross-disciplinary networks, such as NEPROM, IVBN, Holland Metropole, the DGBC, INREV and ULI.
Healthy and safe areas: heartsafe
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. At the end of 2022, 100% of the Fund's tenants and communities had an AED available within six minutes walking distance.
24/7 AED coverage: 100% coverage
Percentage invested in ‘Convenience’ retail: 40-60%
Tenant satisfaction score: >7
Contributing to healthy, safe and good working conditions
Considerate constructors scheme (construction sites)
The Fund's target is to have more than 75% of its construction sites registered under the Considerate Constructors (Bewuste Bouwer) scheme by the end of 2022. The Fund achieved its target, as 82.1% of its construction sites were registered with the scheme. This ensures that contractors deal with the concerns of local residents and address safety and environmental issues during the construction phase.
Construction sites with considerate constructors scheme (based on purchase price): >75% of total construction sites.
The Fund’s underlying investments significantly contribute to these objectives in line with the qualifications laid out in articles 10 and 11 of the TR.
At the same time, the economic activities do not significantly harm any other environmental objectives.
Furthermore, the economic activities are carried out in compliance with the minimum safeguards laid down in Article 18 of the TR.
The economic activities have been assessed based on the technical screening criteria established by the European Commission. The calculation uses asset level data for the Green Asset Ratio (GAR). Turnover, OPEX and CAPEX are calculated on the basis on the corresponding (sustainable) assets. The reference date for the sustainability data is set at 1 January 2022 and financial data at year-end 2022. Assets sold in the course of the year are not taken into account. Buildings under construction with a building permit after 31 December 2020 and new acquisitions have not yet been assessed for Taxonomy alignment. Until net risk is available, the physical climate risk is based on gross risk (surrounding risk).
Taxonomy aligment of investments
29% of the Fund’s underlying investments are aligned with the technical screening criteria related to a substantial contribution to ‘climate change mitigation’ due to the number of A or better energy labels and the economic activities do not significantly harm any other environmental objectives due to the limited physical climate risks.
3% of the Fund’s underlying investments, which are not aligned with ‘climate change mitigation’, do contribute substantially to ‘climate change adaptation’ due to the limited physical climate risks and the economic activities do not significantly harm any other environmental objectives due to the number of B or C energy labels.
68% of the Fund’s underlying investments are not Taxonomy-aligned. A selection of the investments within this segment complies partially with the technical screening criteria and further assessment will be needed to determine Taxonomy alignment, as is the case for new buildings with a building permit later than 31 December 2020. On the basis of the new information, the Fund will establish whether part of these investments is in fact aligned with the EU Taxonomy.