AEW Capital Management believes that certain ESG considerations are an important component in creating long-term value for our clients. AEW is committed to a vision of prudent property stewardship with the goal to develop or enhance the environmental, social, governance and resiliency measures of its property investments to create and maintain the value of such investments over time. AEW prioritizes driving returns for our clients and believes that the integration of appropriate responsible investment practices into all aspects of real estate investment management supports this priority.
As an active owner of listed real estate securities and fiduciary on behalf of our clients, AEW’s public real estate securities professionals seek to engage with public real estate companies in our investable universe on the inclusion of best practices toward ESG issues. Incorporating our insights alongside third-party data, we seek to form an opinion regarding each company’s ESG initiatives as one factor of the group of factors taken into account when we value a stock. We form a proprietary ESG risk score, which is an input into our larger securities valuation analysis. This approach is generally applied across AEW’s global securities platform, but may not be applied to certain client separate accounts in whole or in part, in accordance with client guidelines.
As part of our practices, we engage with portfolio companies to gauge their support of a transition to a lower carbon economy, as well as their willingness to embrace social responsibility and promote sound governance to drive the long-term value of the portfolio companies. To reduce risk and support returns over time, AEW encourages companies to target reductions in energy use, greenhouse gas emissions, water consumption and waste. When investing in a security, we take into consideration the company’s policies regarding applicable environmental, social and governance issues.
Dialogue between AEW and portfolio companies gives us the opportunity to exchange views with company boards, management teams and dedicated sustainability teams. A full description of our Engagement approach can be found below.
We expect companies to be transparent in providing information regarding their financials, real estate holdings, practices toward environmental, governance and social issues, especially when required by local market regulation. We believe that companies should report policies related to these issues on a regular basis alongside financial performance indicators.
Proxy voting is part of AEW’s responsibility to its clients. Our Proxy Voting protocol considers the assessment of Environmental, Social and Governance (ESG) factors along with a group of other factors. Our Proxy Voting Guidelines can be found below.