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 to drive long-term value to our clients. In its role as an investment advisor, AEW acts as a fiduciary to its clients and we believe this includes the consideration of ESG risks and opportunities and the potential 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 relevant ESG conversations is part of these discussions and we also may have dedicated sessions with the respective company’s sustainability teams to cover specific ESG questions, as they arise. We believe we can encourage industry-based 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. AEW prioritizes driving returns for our clients and AEW believes that the integration of applicable responsible investment practices into all aspects of real estate investment management supports this priority.
While AEW follows its own active engagement process, our approach is framed by the following:
Prominent, relevant 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 believe that embedding ESG into engagement can improve financial performance and reduce reputational risk, thereby protecting shareholder returns at the company.