Socially Responsible Investment Policy
AEW believes that socially responsible investment - an investment approach that takes into consideration environmental, social and governance ("ESG") issues - can positively impact long-term investment performance, well-being for occupiers of space and the community at large. While socially responsible investing is an investment concept that has been the subject of a global dialogue for some time, its application to the real estate investment management community is relatively new. Accordingly, AEW seeks to identify ESG factors that are most relevant to real estate and that can be appropriately incorporated into the real estate investment and asset management process.
We also recognize that many of our clients share with us an interest in exploring the implementation of practices and procedures that are both consistent with current ESG thinking and the ongoing satisfaction of our fiduciary duties to our clients. Notwithstanding any other considerations, investments must be made and managed in accordance with client guidelines and requirements, and AEW’s duty to its clients must take precedence over any other considerations.
AEW recognizes that commercial property has been widely identified as a significant source of green house gases as well as a major point of energy consumption of all types. AEW also recognizes the important role of commercial property in the daily lives of the individuals who live, work and conduct commerce in the properties that we occupy, own and manage on behalf of our clients.
AEW is committed to providing a positive and sustainable workplace for its employees and seeks to enhance the sustainability of the commercial property investments that it undertakes on behalf of its clients to the degree that is prudent within our broader mandate of acting as an investment fiduciary on behalf of our investors.
Mitigating actions may range from individual property-focused initiatives (such as identifying opportunities to reduce energy and water use, waste and carbon emissions) to the consideration of environmental "best practices" across all investments. In our development activities, we seek to identify transit oriented, mixed use and urban infill strategies, to the extent they are consistent with the investment strategies of our clients and funds.
Environmental sustainability initiatives implemented by AEW on behalf of its clients must be practical and costeffective. Clients should expect such initiatives to have the potential for adding value to real estate assets not only through reduced operating expenses, but also through distinguishing such assets within their respective markets and reducing the risk of functional obsolescence which could adversely impact disposition and value. We strive to engage with thought leaders in this area so that we can make our portfolios greener while acting responsibly for our investors. By applying responsible reduction strategies, we believe we enhance not only our environmental, but also our investment performance.
AEW believes that social responsibility comprises good corporate citizenship, as well as consideration of the impact of our operations on others. As such, we are committed to making business decisions based on what we believe is right, not simply what may be expedient.
AEW recognizes and seeks to take into account the interests of our stakeholders, whether they are clients, tenants, employees or other individuals with whom we interact. AEW also seeks to respect: human rights; diversity and equality; and the health, safety and well-being of its employees and space occupiers.
AEW is committed to supporting non-profit organizations through its charitable giving program, including supporting organizations in which its employees are involved.
AEW believes that companies should embrace corporate responsibility, accountability, fairness, and transparency not only in the way companies manage their own affairs, but also in how companies manage their relationships with clients and in regard to investments made on behalf of clients.
AEW believes that a sound internal control environment, coupled with awareness, professional competence and a formal review process, is critical to the success of its business. AEW strives to ensure that senior management and personnel are sufficiently aware of risks inherent in the investment management process and that control procedures exist to manage those risks adequately, including appropriate compliance policies and procedures.
AEW’s governance relies on a committee structure (for example, Management Committee, Investment Committee and Audit Committee) where responsibility for oversight of the firm’s operations has been delegated to senior management teams that meet on a regular basis. Matters reviewed by the various committees include, for example: proposed investments on behalf of clients; compliance with investment guidelines and restrictions in place for client accounts; investment performance relative to applicable benchmarks; risk/return chacteristics and valuation metrics; economic and capital markets conditions; and AEW’s general risk control environment, including legal and regulatory risk, compliance policies and procedures, and operational controls.
AEW also has a Code of Ethics that establishes guidelines for professional conduct, particularly with respect to limitations of potential conflicts of interest and personal trading procedures, including pre-clearance and reporting obligations. Additionally, AEW maintains an employee handbook which sets forth AEW’s professional expectations of its personnel, among other things. AEW also maintains comprehensive policies related to client intake, know your client and anti-money laundering.
With respect to commingled vehicles invested in direct real estate, we recognize the importance of governance and transparency in the relationship between investors (limited partners) and the sponsor (general partner). AEW’s co-mingled funds are generally structured and operated in a manner that is consistent with guidelines established by trade associations or non-governmental organizations focused on fund management, such as the ILPA (Independent Limited Partners Association), UNPRI (United Nations Principles for Responsible Investing) and INREV (European Association of Non-listed Real Estate Vehicles) . Particular attention is given to alignment of interest, governance and transparency.
With regard to publicly traded real estate securities investments, AEW typically owns (on behalf of its clients) a very small percentage of any class of issued and outstanding securities (generally under 3% in the aggregate) and has no control over the governance of such companies. Where AEW is responsible for voting proxies on behalf of its clients, AEW will generally assess the corporate governance of such companies through the services provided by third-party proxy research service providers (such as Glass, Lewis & Co. or Institutional Shareholder Services). AEW will generally vote affirmatively on proxy issues that reflect sound corporate governance practices and which AEW believes are in the best interests of its clients.
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