AEW Capital Management believes that 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. While AEW supports the integration of responsible investment practices into all aspects of real estate investment management, the priority remains on driving returns for our clients.
As an active owner of listed real estate securities 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 a factor taken into account when we value a stock. We form a proprietary ESG risk score, which is an input into our securities valuation analysis. This approach is applied across AEW’s global securities platform.
We recognize that the real estate industry can play a significant role in tackling climate change. Building construction and operation of buildings account for a significant amount of carbon emissions. As part of our ESG 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. 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 conservation, as well as their practices relating to social and governance issues.
Through active engagement, we believe AEW can help influence positive change. 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 conservation and climate change, as well as governance and social issues. We believe that companies should report on corporate social responsibility (CSR) policies on a regular basis alongside financial performance indicators.
Proxy voting is part of AEW’s responsibility to its clients. Our Proxy Voting protocol takes into account the assessment of ESG factors. Our Proxy Voting Guidelines can be found below.