The European association for Investors in Non-Listed Real Estate Vehicles (INREV) is Europe’s leading platform for sharing knowledge on the unlisted real estate industry. Based in Amsterdam and launched in May 2003, its goal is to improve transparency, professionalism and best practice across the sector, making the asset class more accessible and attractive to investors. Their members include 75 of the largest institutional investors, as well as 40 of the 50 largest real estate fund managers. The association represents and reflects an industry with a total value of €2.7 trillion and INREV members deliver €300 billion of stimulus to the real economy of Europe.
In 2016 INREV published Sustainability Reporting Guidelines which consist of mandatory sustainability reporting requirements and best practice recommendations. These recommendations are designed to produce meaningful data that increase visibility and insight into a vehicle’s ESG efforts and also details their next course of action for improvements. They aim to provide a coherent framework for ESG reporting in line with annual financial reporting and present a clear picture from the strategy through to environmental key performance indicators.
Sustainability reporting ensures organisations consider their impacts on various ESG issues and enables them to be transparent about their sustainability strategies. This increased transparency leads to better decision making, which helps build and maintain a sustainable real estate sector. Decisions are made by investors and fund managers which have direct impacts on their stakeholders, the environment, civil society and citizens. Nowadays these decisions are rarely based on financial information alone. They are based on a wide variety of environmental, social and governance factors which are presented in the INREV Sustainability Reporting Guidelines.
In order to claim compliance with the INREV Guidelines there are certain requirements have to be reported on an annual basis:
- Mandatory requirements
- Describe the overall approach to setting a long term ESG strategy for the vehicle
- Detail the vehicle’s approach for ensuring compliance for current legislation relating to ESG issues is in place
- Set out the annual objectives and associated targets for the coming 12-month reporting period
- Detail objectives for the next 12-month reporting period for ensuring compliance with current legislation in relation to ESG and about preparations for any future legislation that may be undertaken in this period
- Report against annual objectives and associated targets set for the vehicle
- Report against compliance with current legislation requirements and objectives and associated targets for preparations for upcoming legislation
- Disclose absolute and like-for-like environmental data for the proportion of the vehicle’s portfolio that is in the fund manager’s operational control. This should cover:
- GHG Emissions
- Best practice requirements
- Detail any additional key material aspects for the ESG strategy for the vehicle
- Detail additional information on other annual objectives (related to key material aspects referenced above) and associated targets for the vehicle based
- Report against the annual objectives and associated targets as set out above
- Disclose absolute and like-for-like environmental data for the available tenant data for the vehicle’s portfolio