ESG Investing: Operational Excellence in Real Assets - Part 1 Planning and Development

FIDA 202009 ESG Investing

ESG Investing: Operational Excellence in Real Assets - Part 1 Planning and Development

 

In this series we will focus on the environmental, social and governance challenges throughout the lifecycle of a real asset. We aim to enable investors and asset managers to achieve a higher level of operational excellence when assessing and managing real assets.

The series will track the typical lifecycle of a real asset investment over three parts:

Part One: Acquisition 
Part Two: Ownership 
Part Three: Divestment (Realisation) 

For each of these three stages, we will outline the most important challenges in the E, S and G dimensions and provide guidance on how best to address them. We will also sprinkle in a few case studies so that readers can gain a better understanding of how other investors have tackled some of these challenges.

Before we address these questions, it is important to emphasise that pension funds, insurance companies and other institutional investors who want to invest in real assets need to have the appropriate internal structures in place before engaging in these investments. A clear commitment from the entire organisation and senior management towards ESG-related policies needs to be in place. Written guidelines, such as investment policy statements or ESG strategy descriptions for the organisation, help to gain a common understanding of how to engage in ESG-related matters.

And of course, proper monitoring and controlling mechanisms must be in place to compare how each investment is tracking against the stated goals of the organisation. In the previous three reports in this series, we have provided guidance on how this can be achieved in each of the major real asset classes.

 

Read part one here.

 

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