Our overriding aim is to integrate ESG into our decision making at all times

Please tell us about Aberdeen Standard and your role there

Aberdeen Standard is one of the largest active managers in the UK and Europe as a whole, and I head the ESG Real Estate team which leverages a dedicated 20-strong team across the group, with a further 30+ ESG specialists on the investment desks.

Each fund has an annual business plan that assesses ESG risks and opportunities, and I personally have the opportunity to check and challenge what our real estate funds are doing as part of the Investment Strategy Committee.

I also sit on the global management team for Aberdeen Standard Investments real estate division, ensuring that ESG is considered as part of our business management as well as investments.

My approach has been to ensure that ESG is truly ingrained in the thinking of our investment team. Both within Aberdeen Standard and among our clients, there has been a huge behavioural shift over the last 18 months or so.

There has been a large increase in the hours spent every week talking to clients, and my team are integral to all our new product launches. Aberdeen Standard Investments has to embrace ESG as a good corporate citizen, but our clients also want us to embrace it and their policy holders certainly do as well.

What is Aberdeen Standard’s overall approach to ESG?

Our overriding aim is to integrate ESG into our decision making at all times.
If an acquisition doesn’t fit our criteria, I can vote against that on the Real Estate Investment Committee, but if my team doesn’t support that acquisition it’s unlikely it would have made it to the committee anyway. We are an important part of the appraisal and the underwriting process.

One of our key innovation ideas is our unique ESG Impact Dial, a bespoke solution for investors that enables us to dial our ESG aspirations up or down based on our investors’ desired outcomes.

The dial allows us to measure every asset against 21 material factors, from environment and climate to demographics, technology and infrastructure, to governance and engagement and beyond.

Our house standard is the absolute minimum hurdle we seek to achieve, and influences the assets we buy, how they are managed and future plans for the asset.

But our funds also go much further, on a sliding scale on the dial from avoiding risk or harm to benefitting stakeholders right up to advancing innovative solutions.

Some investors want to be innovators in environmental solutions and others prefer to focus on social value and demographics – the ESG Impact Dial can measure against all those aspects.

What are Aberdeen Standard’s longer-term responsibilities?

The ESG agenda will only become bigger and more important. For example, how much do we need to spend today to hit new goals in five, 10 or 15 years?

It’s important to remember that hitting short-term financial goals as an approach is unlikely to align with hitting longer-term ESG goals.

Because of this, we see ourselves as curators or stewards of buildings, meaning that we are always managing with the long term in mind.

What is the best example of your ESG strategy in action?

Our AIPUT fund is making great strides and has established a strategic target of achieving carbon neutrality by 2025. It has taken the important step of helping to make the airports, which are key to its warehouse portfolio, cleaner, safer and more vibrant for local communities.

Every year, AIPUT will review its carbon emissions and apply a carbon price to ring-fence a sum of money to support abatement projects. In 2025, AIPUT will offset any residual emissions using ‘Gold Standard’ credits, minimising the need to offset as much as possible.

The team are achieving this through enhanced warehouse design, solar photovoltaics installation, building future transport and logistics technology into site masterplans, and aggregating small initiatives to improve operational energy efficiency on a big scale.