Stewardship of our clients’ capital is fundamental to how AEW Capital Management operates. AEW is committed to a vision of property stewardship that includes identification and implementation or enhancement of sustainability measures. In its role as an investment advisor, AEW acts as a fiduciary to its clients and we believe this includes the consideration of Environmental, Social and Governance (ESG) risks and opportunities and the impact of ESG matters on returns.
Engagement by AEW’s public equity real estate securities investment professionals (“we”) takes the form of meetings or discussions with management teams and boards of public real estate companies, as well as evaluation of the assets and business operations of the companies. Engaging in ESG is an important part of these discussions and we also have dedicated sessions with the respective company’s sustainability teams to cover specific ESG questions, as they arise. We believe we can encourage ESG best practices and see this as critical in being a responsible steward of capital, fostering sustainable growth. Through active engagement, we believe we are acting as a responsible member of the investment community that positively influences decisions that will benefit the company’s bottom line, as well as the community. Our efforts to actively engage with companies on matters relating to ESG, including achievements and goals, are reported to the AEW Capital Management ESG Steering Committee. While AEW supports the integration of responsible investment practices into all aspects of real estate investment management, our priority remains on driving returns for our clients.
While AEW follows its own active engagement process, our approach is framed by the following:
Prominent topics during engagement on ESG generally include:
We measure and monitor progress at the company and integrate the results of engagement into a proprietary ESG risk score which ultimately impacts how we value a stock. We hope to have a positive impact on the companies in which we invest and believe that embedding ESG into engagement can improve financial performance at the company and be positive for all stakeholders by protecting and enhancing long-term shareholder value.