Definition
Consulting for reporting to the PRI is a service that is offered by LOGAN which is based on the six principles for investment of PRI. The criteria for membership to the PRI is comprised of the measurement of six principles of environmental and social principles. The service is designed to help real estate fund managers, and developers satisfy the reporting needs to PRI through third party analysis which is submitted to PRI.
Use: to comply with the reporting requirements of the PRI organization
When to order: when there is a need for reporting – or if the task is better served being undertaken by a third party. Staff responsibilities may be focused on other activities – or the current staff may not have expertise in such reporting.
LOGAN offers ESG consulting in real estate which includes assistance in PRI reporting (Principles for Responsible Investing). This can be done on a portfolio or fund manager level – or based on a specific project. LOGAN has offices in Latin America (Colombia, Peru, Mexico, and Costa Rica) which can provide local assistance for this service. Generally, reports are ordered for the project level reporting, which is done for important or notable construction or development projects which may require study. Also, reporting is done on a periodic basis – for an entire real estate portfolio. LOGAN has a concise methodology and format which facilitates a smooth reporting process – with the knowledge and understanding of an experienced consultant.
Types
The types of investment – or financing which may require PRI reporting include:
– Responsible investment for fund managers or real estate funds
– Financing of development or construction projects
– Loans associated with new development or construction
– Refinancing of existing real estate projects
– Financing or investment in the acquisition of a new project or asset
– Creation of a new real estate vehicle or real estate fund (Fibra)
Process
Investigation of the sponsor: a thorough understanding and investigation of the company which is considered the sponsor of the project is undertaken. It is important to understand the mission of the respective company, its profile, and its history. Understanding the overall goal of the sponsor and any focus that has been made on sustainability, the environment, social responsibility, and corporate ethics.
Portfolio review: each project is reviewed based upon its risks, impact on the environment, human rights, and biodiversity. Visits to the projects and interviews with the relevant managers may be undertaken if necessary.
Report production and delivery: Reports are developed, which include a discussion of the goas and conclusion as related to the investments and projects and their ability to demonstrate adherence to the principles of the PRI. The report also identifies areas where the sponsor can improve the ESG rating of a particular area or asset -and a recommended action plan associated with it.
Commitment and compliance: The consultants will adhere to all applicable laws and regulations in an effort to conform with the PRI principles associated with environmental impact and social responsibility.
Impact Factors
Environmental impact: Less concentrations of CO2, and efficient operations which reduce contamination, which preserve and re-use natural resources, and reduce excess residuals and waste.
Social impact: Less impact on critical infrastructure, health impact, and positive social impact.
Organizational impact: increasing competitiveness, access to information, improved labor performance, and communication
Economic factors: reduction in the cost of operation, improvement of lifecycle of the asset, increasing the value and productivity.
Important Inputs
– History of the sponsor, and the investments that have been made
– Evaluation of the environmental impact, social governance (ESG)
– Evaluation of existing portfolio of assets (or asset)
– Plan for environmental management (PGAS)
– Stakeholder plan (SEP)
– Incorporation of socially responsible investment focus
Recent Trends
New laws focused on environmental responsibility and the impact that companies have on the environment.
Countries in Latin America have implemented national policies that prioritize investment in sustainable projects and investment and those that consider social impact and environmental impact.
The IFC, UN, IADB, are organizations that are integral in the development of Latin America and are dedicated to socially and environmentally responsible investment and lending in the private sector.
Development of international standards which help companies evaluate and follow ESG focused principles and goals (GRESB, Principios de Ecuador, PRI).
Deliverable
PRI reporting assessment consists of the following main sections:
Introduction: Objectives, scope, and focus of the report
Description of the Organization: general information and history, investments, investment performance, and timeline of organization.
Investment policies and administration
PRI principles and the strategies that have been undertaken by the sponsor or organization.
Sections which analyze specific assets (in this case real estate assets, or a portfolio of assets on an asset-by-asset basis)
Recommendations to improve on the areas for improvement and an action plan to improve them
Annexes or appendices: relevant information
