03.05.2022

Sustainability strategy of KanAm Grund Group progresses

  • Retail real estate fund LEADING CITIES INVEST aligned with Article 8 SFDR
  • Focus on ESG characteristics ‘Environmental’ and ‘Governance’

In order to comply with the European Union's regulation on sustainability‚Äźrelated disclosures in the financial services sector (Sustainable Finance Disclosure Regulation – SFDR), KanAm Grund Group has adapted the retail real estate fund LEADING CITIES INVEST (ISIN DE0006791825) so that it is aligned with Article 8 of the SFDR. This was preceded by the ‘LEADING CITIES INVEST goes green initiative’, which was launched in 2018 and has created the organizational conditions required for this purpose at both KanAm Grund Group and investment fund level in recent years. 


Hans-Joachim Kleinert, Founding Partner of KanAm Grund Group says: ‘From the very beginning, we have been observing the various efforts of the financial industry to meet the EU's new sustainability standards. After intensive consideration of what this means in detail at the company and investment fund level, we decided to convert the LEADING CITIES INVEST to Article 8 of the SFDR. Our main focus is to support the Paris Climate Agreement targets and to provide our investors and distribution partners with transparent and comprehensible information on the ESG criteria of the LEADING CITIES INVEST fund.‘ 

The focus of the LEADING CITIES INVEST is on the ESG characteristics ‘Environmental’ and ‘Governance’
As part of the environmental characteristic, climate protection in particular will be promoted in the LEADING CITIES INVEST by driving forward a reduction in the real estate portfolio's CO2 emissions as a key criterion when acquiring and operating buildings. This will be based on consistent measurement, analysis and derivation of measures for defined key figures to ensure compliance with the CRREM 2-degree decarbonization pathway.* Decarbonization pathways indicate the extent to which energy efficiency and CO2 neutral energy sourcing for buildings must be boosted in order to reach climate protection targets. The climate target of the CRREM method is to limit global warming to two degrees Celsius. In future, the CO2 emissions data calculated for the property portfolio will be regularly compared with the target figures indicated in the portfolio decarbonization pathway, not only during acquisition but also for existing properties.

In addition, an in-house ESG scoring model was developed to provide a quantitative assessment of the properties from a sustainability viewpoint. This can be used to compare existing and purchased properties, and to plan their environmental development. The KanAm Grund Group ESG score is calculated on the basis of eight parameters and various associated sub-parameters (CO2 emissions and decarbonization pathway, availability of energy data, energy certificate, energy audit, smart metering systems, environmental risks, site assessment and building certification).

The ESG characteristic ‘governance’ is taken into account by investing exclusively in financial products whose issuers accept the principles of the United Nations Global Compact. The companies participating in the United Nation’s most important global initiative for sustainable corporate governance commit to upholding various principles of responsible corporate governance relating to human rights, labor standards, the environment and climate, and preventing corruption. 

KanAm Grund Group has been active in sustainability for years 
The ‘KanAm Grund Group goes green strategy’ aims to achieve sustainability at company and investment fund level. The properties belonging to the fund portfolios have also been externally assessed for years, with the aim of obtaining certification based on the latest sustainability standards. In the LEADING CITIES INVEST fund, 19 properties worth around EUR 785 million are currently certified or in the process of being certified. This corresponds to a certification rate of over 66.3 percent of the investment fund's total real estate assets. As part of the ‘LEADING CITIES INVEST goes green initiative’, the energy supply for the buildings held in the portfolio was also re-arranged in order to cover their general power and natural gas requirements by means of CO2 neutral methods. The LEADING CITIES INVEST also participated again in the Global Real Estate Sustainability Benchmark (GRESB) benchmarking in 2021, achieving Green Star status with three stars. 

 

*The method developed in the research project Carbon Risk Real Estate Monitor (CRREM), an EU-funded research project, is used as the scientific basis for determining the decarbonization pathways for the LEADING CITIES INVEST. There are different CRREM decarbonization pathways in the timeframe up to 2050, depending on the climate target, type of use and location of the property. The method makes it possible to use neutral scientific findings when assessing whether a property will satisfy the defined requirements for a falling CO2 emissions profile in the future. The basis for this measure is the Paris Climate Agreement of 2016. This requires that the increase in average global temperature is to be limited to well below 2°C compared to pre-industrial levels, and efforts are to be made to limit this temperature increase to 1.5°C.
 


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