We have made considerable progress in determining how best to embed Environmental, Social and Governance (ESG) factors within our strategy and management process.
The Sustainability and Ethics Committee has governance responsibility for identifying and mitigating climate risk, and for ESG overall. Through his role as Chairman of the Committee and CEO of Sirius Real Estate, Andrew Coombs reports and updates the Board. In her role as Chief Marketing and Impact Officer, Kremena Wissel, heads the area of ESG including chairing the ESG committee at the operating company building the link to the Sustainability and Ethics Committee of Sirius Real Estate.
Our ESG strategy & programme has been developed to help us better execute on our ESG priorities; to deliver measurable actions in a timely manner; and to focus resources in a way which is cost-effective and commercially practical.
ESG Materiality Assessment
While ESG has for a long time been part of our business approach, we recognise that, in certain areas, we needed to accelerate the rate at which we have reported performance.
As such, we recently undertook a formal review of our ESG activities conducted by a specialist consultancy, followed by an ESG materiality assessment. This process was designed to identify sustainability and environmental issues, risks and opportunities which have the potential to impact our business model and, ultimately, to inform the development of our ESG strategy.
As part of the process of conducting the materiality assessment, we consulted with a number of internal and external stakeholders, including shareholders, managers, employees, tenants and suppliers. Across these stakeholders the level of engagement was high, and the feedback was invaluable in helping to determine the importance of a range of ESG aspects and gauge the potential impact on our business. In line with best practice, the Sustainability Accounting Standards Board’s (SASB) materiality assessment map was used as a reference point.
The results of the materiality assessment were presented to the senior management team in February 2021. The next stage, in the new financial year, is for the identified materiality issues to be validated by the Sustainability and Ethics Committee and the Board. They will then be incorporated into our ongoing ESG strategy and management programme, together with identified actions and targets for each area of our ESG activity. We look forward to reporting on these developments in more detail in the future.
Following the materiality assessment, key elements of our 2021/2022 ESG strategy include, on an environmental, level the integration of environmental considerations into our portfolio acquisition process and the development of a carbon emission reductions and net zero strategy in tandem with the continuation of Scope 1, 2 & 3 emissions assessment and Taskforce for Climate-related Financial Disclosures (TCFD) methodology.
We’ll also be addressing the ways in which our purpose, values & behaviours support our sustainability initiatives, including corporate giving, relations with the communities in which we operate, and the ways in which we can integrate our tenant engagement programme into broader stakeholder engagement.
Finally, we will also be conducting a Governance and Risk Review covering critical areas such as wellbeing & diversity to ensure accountabilities, policies and strategic goals support the embedding of ESG within Sirius, as well as reviewing our non-financial KPIs and targets.
Ultimately, our ESG Strategy has been developed to help Sirius take control of its ESG agenda; to deliver measurable actions in a timely manner; and to focus resources in a way which is cost-effective and commercially practical.
We are now making good progress and as we build a comprehensive ESG strategy we were pleased that our efforts have been recognised by MSCI with an upgrade in our ESG rating from A to AA.
Sustainability Strategic Framework
Underpinning our commitment to a responsible and sustainable approach is our Sirius Sustainability Framework. First published in 2019, the framework provides the foundation for all our activity as a business.
Our strategy places economic sustainability at its core, emphasising our belief that only a financially sustainable business can provide a long-term positive contribution to the environment and our stakeholders. In turn, we understand that environmental sustainability, ethical practices, and happy, engaged people are essential for to Sirius to be both a force for good in society, and for our business to succeed in the long run.