Our commitment to sustainable property investment and management

Carbon emissions targets and environmental considerations are leading priorities for us as investors and real estate managers. Environmental, social and governance (ESG) considerations play a significant part in the fundamental analysis process we use to create risk-adjusted returns for our investors.

Our immediate and longer-term ESG goals are to ensure all of the buildings in our portfolio are carbon emission-free. This includes making improvements to our existing stock of buildings to bring these into line with net-zero carbon emissions targets by 2050. We expect accelerating technological developments will change the ways existing properties need to be redeveloped in terms of climate change risk and are proactively developing methodologies to implement these speedily.

Our careful attention to health, environmental and energy-efficiency considerations ensures all of our properties are inherently more attractive and beneficial to the tenants. This approach also adds value by reducing operational running costs, which in turn results in higher returns for our investors.

Our promise is to make every property we own as environmentally efficient and economically viable as possible in order to add value, both for our tenants and our investors.

As part of the East Capital Group, East Capital Real Estate's ambition is to realise the group's investment philosophy by embedding sound ESG principles and processes across all of our investment strategies.

Since inception, we have set out be a long-term, active and responsible investor. We have consistently developed our internal ESG framework to evaluate ESG-related risks and opportunities, making these integral to the investment process.

We strive to be a leader in our markets through demonstrating transparency in all our efforts and initiatives. 

 

We prefer properties with strong environmental qualities, including those that:

  • are in strategically well-positioned locations, with easy access to public transport

  • display attractive, high-quality interior and exterior design 

  • utilise renewable energy (solar, wind, hydro) and smart construction solutions that require less energy and water use, less waste management and less maintenance.

 

 

The wide diversity in types and ages of buildings in our portfolio demands different approaches for measuring, managing and optimising energy use and reducing carbon emissions.

We seek to source renewable energy solutions for water and energy use wherever possible - for example, by adding solar panels (especially for the logistics parks) or by  implementing heating, ventilation and air conditioning (HVAC) and other automation systems that can help reduce energy use while improving the environment for the tenants.

We ensure our properties' social characteristics take tenants' health, safety and well-being into consideration by assessing all our buildings for air quality, light and sound pollution. We also strive for and value access to sporting and recreational facilities. 

The reduction in operational and maintenance costs not only makes the properties more attractive to tenants, thus reducing turnover, but also translates into higher returns for our investors.



 

A proprietary analysis framework

Our ESG scorecard is applicable to all existing investments, serving as a benchmark against peers or market average and review of required improvements on an ongoing basis. It is also crucial when assessing any new buildings or property acquisitions in terms of understanding material risks and opportunities. 

The properties are assessed in various aspects of the sustainability issues, closely aligned with the UN Sustainable Development Goals. For example, the properties are assessed with regards to energy efficiency, water consumption, waste management, accessibility, ecology and green areas, indoor climate and air quality, noise or light pollution, governance issues etc. The scorecard also includes a Red Flag section, highlighting material ESG topics and any aspects not in line with sustainability goals and best practices. Internal thresholds have been set for the scores and improvement areas are mapped accordingly.

 

 

 





BREEAM (Building Research Establishment Environmental Assessment Method) is the world’s leading sustainability assessment method for masterplanning projects, infrastructure and buildings. It recognises and reflects the value in higher performing assets across the built environment lifecycle, from new construction to in-use and refurbishment. BREEAM does this through third party certification of the assessment of an asset’s environmental, social and economic sustainability performance. This means BREEAM rated developments are more sustainable environments that enhance the well-being of the people who live and work in them, help protect natural resources and make for more attractive property investments.

 

Our BREEAM certified buildings

 

Nehatu Logistics

Niidu road 1 and 3 industrial buildings - the first industrial property certified by BREEAM in Estonia. The main advantages enjoyed by the complex are land use, large proportion of green areas and accessibility both by public transportation as well as bicycle. In addition, the buildings provide a good indoor climate for the workers.

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Bauhof

Bauhof sales centre building received high evaluations across all nine BREEAM categories, with outstanding results achieved in the well-being of users, waste management, accessibility, and energy use.

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Hilton Tallinn Park Hotel

We obtained a BREEAM “In-Use Very Good” sustainability certificate for the Hilton Tallinn Park Hotel in 2020. This is the first time that a hotel in Estonia has received such a rating under the world's leading Building Research Establishment’s Environmental Assessment Method BREEAM.

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Metro Plaza Office Building

The Metro Plaza office building received the BREEAM certificate in 2020, corresponding to the very good assessment rating. The assessment was conducted based on factors as health and wellbeing, as well as energy-, transportation-, water efficiency, building materials, waste management, use of land and pollution. Factors that had a positive impact on the assessment were a glass facade ensuring a bright work environment, a green area that was added on the terrace, as well as additional parking places installed for bicycles.

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A13 Office Building

Our A13 Office Complex was the first of our properties which qualified as “Very Good” according to BREEAM In-Use assessment. The building is the first known office building in Tallinn to have been awarded the international standard BREEAM in-use certificate.




Jankiskiu 52 Center

A “last mile” modern logistics, distribution, and light industry center located in a suburb of Vilnius, 15 minutes away from Vilnius city center and with excellent access to Vilnius Western bypass and Vilnius-Klaipeda A1 highway. The property was built in 2016 and 2018, has a total leasable area of approximately 13,000 sqm and is fully leased.




Environmental, Social and Governance (“ESG”) and Sustainability Related Disclosure

Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector, as amended (SFDR) governs the transparency requirements regarding the integration of sustainability risks into investment decisions, the consideration of adverse sustainability impacts and the disclosure of Environment, Social, and Governance (ESG) and sustainability-related information.

East Capital Real Estate integrates, among others, environmental, social and/or governance characteristics as part of the due diligence process when selecting investment opportunities.

East Capital Real Estate identifies, analyses and integrates sustainability risks in our investment decision-making process as we consider that this integration could help enhance long-term risk adjusted returns for investors. East Capital Real Estate is of the opinion that unmanaged material sustainability risks and opportunities may influence the current and future position of a company. East Capital Real Estate considers principal adverse impacts derived from sustainability factors throughout the investment process. The identification of principal adverse impacts is a part of the investment universe screening and taken into account when deciding on an investment proposal.


Our Active Ownership Policy specifies how we shall act when exercising the ownership rights in the companies held by these strategies on behalf of our clients, the investors. Additionally, the policy describes how we integrate shareholder engagement in our investment processes, as well as how we exercise voting rights. For more information, please refer to the Active Ownership Policy.

As part of our sustainability work, East Capital Real Estate shall also ensure that the remuneration is consistent with the sustainability work undertaken by East Capital Real Estate and that sustainability aspects shall form part of the evaluation of the employees that serves as a basis for determining remuneration.