Our investment style and philosophy
“Responsible investment requires a leap of faith on the part of institutional investors. They need to anticipate change. A big hurdle here lies in the fact that the conventional fund manager’s approach to investment involves looking back on past performance. But if we are to think about the future, rather than benchmark against the past, then as an industry we need to change our approach to investment. The demand from clients is there: as an industry we need to meet this.”
“Responsible Capitalism”, Hermes Oct 2015.
In Hermes Real Estate we are committed to act consistently and clearly as stewards of the assets in which we invest, with the aim to deliver investment excellence. With a strong focus on the income component of total returns and a disciplined approach to risk, we seek to consistently out-perform on a risk adjusted basis to deliver robust and repeatable performance in line with our fiduciary responsibility to our clients. We see environmental, social and governance (ESG) risks as business critical to our funds and are committed to embedding responsible investment principles across our investment practices.
'Responsible Property Investment has been a long-term priority for Hermes Investment Management, including mitigating the risks of carbon over the next 20 to 30 years. We have explored and developed a range of decarbonisation activities across the asset classes we invest in, which would be applicable for the wider investment community.
Beyond the medium to long term impacts of climate risks and opportunities, we work to deliver continuous performance today. At Hermes we believe that in addition to delivering excellent performance returns to our clients and beneficiaries, we must equally aim to invest for the benefit of the broader society in which we operate. We have these additional responsibilities because our activities will have impacts on the world in which our beneficiaries live and work today as well as the one in which they will retire into tomorrow. A principle which guides our actions is therefore the aim to deliver holistic returns.
For real estate this means that as well as achieving a nominal financial return we also seek to deliver and manage sustainable cities, communities and buildings, communities which have positive social impact through education and job opportunities and energy efficiency and low carbon buildings.
Responsible Property Investment in Practice
We have achieved Responsible Property Investment (RPI) integration across our processes by developing dedicated tools and linking our corporate strategy and strategic investment targets with our portfolio strategies and the management of our buildings.
We have developed our "Responsible Property Development and Refurbishment Guide" to promote the implementation of our RPD programme and achieve our target BREEAM and EPC ratings, for all our new build and refurbishment projects.
We also have an active programme of internal and sector wide initiatives to develop the tools, benchmarks and knowledge required for an effective integration and comparison of performance at fund and market level.
- Better Building Partnership
- Building Performance Institute Europe
- British Property Federation
- Institutional Investors Group on Climate Change
- Global Real Estate Sustainability Benchmark
- Portfolio Decarbonisation Coalition
- Principles for Responsible Investment
- Royal Institution of Chartered Surveyors
- UNEP Finance Initiative
In the last few years we have contributed to the following sector publications:
Institutional Investors Group on Climate Change (IIGCC)
UN Environnent Programme Finance Initiative (UNEP FI)
Energy Efficiency Finance Institutions Group (EEFIG)
In the interests of good practice sharing, we are very much engaged and co-operate with the property companies in the BTPS family, Argent and MEPC with regards to RPI.