In de pensioensector wordt steeds meer aandacht gegeven aan het thema verantwoord beleggen en is zelfs onderdeel van de eigen Code Pensioenfondsen. Het aantal pensioenfondsen dat zich sterk maakt voor verantwoord beleggen, vanuit zowel een financieel als maatschappelijk oogpunt, neemt toe. Naast financiële kengetallen wordt gestuurd op zogenaamde ESG-indicatoren (Environmental, Social en Governance). Universiteit Maastricht, GRESB en Finance Ideas hebben de handen ineengeslagen om de integratie van ESG in het beleggingsproces van pensioenfondsen te onderzoeken. De resultaten van het onderzoek worden tijdens het seminar kort uiteengezet en vormen de aftrap voor een actieve dialoog hoe ver integratie van ESG in vastgoedportefeuilles kan gaan. Uit academisch onderzoek blijkt dat duurzaam vastgoed meer waard is in vergelijking met niet duurzaam vastgoed. Toch is het integreren van ESG-indicatoren in het vastgoed beleggingsproces nog geen gemeengoed binnen de Nederlandse pensioensector. Het doel van de paneldiscussie is om te laten zien hoe actieve samenwerking en kennisdeling kan leiden tot meer duurzame vastgoedbeleggingen. Programma 14:30 - Registratie 15:00 - Opening en welkom door Dick Gort, CEO, a.s.r. vastgoed vermogensbeheer 15:10 - Onderzoekresultaten Verantwoord Beleggen Nederlandse Pensioenfondsen door Piet Eichholtz, Professor of Finance and Real Estate, Maastricht University 15:30 - GRESB update door Sander Paul van Tongeren, Managing Director, GRESB Moderator: Piet Eichholtz Panelleden: André Snellen, Chairman, Pensioenfonds Detailhandel Patrick Kanters, Managing Director Global Real Estate & Infrastructure, APG Asset Management Roger Otten, Investment Manager, Philips Pensioenfonds 16:55 - Afsluiting door Dick Gort

1. 1

2. Sustainable Investment
Lessons from the Field
Piet Eichholtz
Maastricht University

3. Investors in real estate can make a difference
The economics of sustainable buildings
3
Learning
ProductivityProperty industry consumes resources and pollutes
• 40% of global consumption raw materials (even 55% of wood)
• 80% of electricity consumption
• At least 30% of global CO2 emissions
Energy represents 7–9% of occupancy cost in commercial real estate
Many energy-efficiency investments in property have positive net present value
• Better insulation, technology, and building management all create
shareholder value at current energy prices (McKinsey, 2009, 2013)
Solid academic research shows that green property investments create financial
value, especially in office and residential
• Higher rents, higher values, less risk

4. 4
ESG instruments used by Dutch pension funds
Exclusion, reporting, engagement and voting are most common
Percentage of 171 funds reporting responsible investment instruments

5. 5
Size matters in ESG
Dutch pension fund size and ESG instrument use

6. Let’s put this into perspective
Why is this happening and is it a problem?
6
Learning
Productivity
Do the large funds do the right thing?
Small funds face less public and media pressure
Small funds don’t have the resources
Small funds are more likely to opt for passive investments
Small funds make less of a difference, so why bother?
What to do about it?

7. 7
(International) examples and solutions
1. Exclusion’s unintended consequences: Bpf Landbouw (and many others)
• Bpf Landbouw excludes arms
producers from its investment universe
• This excludes direct arms producers
but also related “platform” firms
• Rolls Royce maintains UK nuclear
weapons facilities
• Airbus produces / maintains French navy
nuclear weapon
• Bombardier
• Result is 90% reduction in exposure to
aircraft/space industry
• Reduces portfolio diversification
US$ 555 bn US$ 57 bn
Boeing Airbus United Technology
Lockheed Martin Honeywell General Dynamics
BAE systems Nothrup Grumman Raytheon
Safran Rolls Royce Bombardier
Thales Finmeccanica Textron
Spirit AerpSystems Rheinmetall Zodiac
MTU Dassault Smiths
Gamesa Triumph Orbital

8. 8
International examples and solutions
2. Combining passive investment and ESG: Fjärde AP Fonden
• Fjärde AP Fonden has created a tailor-
made low CO2 index-tracking portfolio
• Goal is to minimize tracking error with
MSCI Europe, and to reduce carbon
footprint by 50%
• Exclusion approach
• Top CO2 producers per sector
• Retain sector weights of MSCI Europe
index as much as possible
• Result is passive portfolio with
performance comparable to MSCI Europe
• AP expects superior future performance
MSCI Europe
Index
MSCI
Europe Low
Carbon
Leaders
index
Annual return since 2012 7.8% 8.7%
Sharpe ratio 0.57 0.63
Tracking Error 0% 0.7%
Securities excluded 93
Market cap excluded 21.4%
Reduction in carbon
emissions intensity 52%

9. 9
International examples and solutions
3. Cooperation: The Nordic Engagement Cooperation
Corporation UN Global compact breach Period
AES corp. Local population chased /
dam
2009 -
Alstom Local population chased /
dam
2009 -
Barrick gold corp. Waste spills, human rights
violations
2009 -
BP plc Deepwater Horizon 2010 - 2015
Deutsche Post Forbid union membership 2015 -
Glencore Mining in Western Sahara - 2015
Nestlé Child labor cocoa plantation 2013 -
Royal Dutch Shell Oli spills Niger delta 2013 -
Total Oil drilling Western Sahara - 2015
Transocean Deepwater Horizon 2011 - 2015
Vinci Labor rights violations Qatar 2015 -
Volkswagen Emission fraude 2015 -
• Pension funds Ilmarinen (€36 bn),
Folksam (€35 bn) and Kommunal
Landspensjonskasse (€61 bn)
founded the Nordic Engagement
Cooperation (NEC) in 2009
• NEC is complementary to fund-level
engagement: only outside the Nordics
• Criteria for engagement
• Likelihood of real influence
• NEC’s potential to get deep
knowledge of subject
• Subject matter should be material
• All three participants hold stake in
target firm

10. 10
Translate this to real estate (and GRESB)
GRESB can provide instruments and/or platform for action
• Saving the planet through real estate
• Small pension funds should make choices, and GRESB data allows them to implement these
• Exclusion’s unintended consequences in real estate
• Exclusion policy on GRESB score would overweigh office and underweigh industrial, Asia
• It would likely exclude storage, healthcare, hotel real estate
• Passive investment and sustainability goals
• Northern Trust index fund uses GRESB universe and selects 80% best in class overall
• Use other GRESB performance data for more specific ESG-performance indices
• Cooperation
• GRESB is designed for engagement
• GRESB data can provide deeper understanding and criteria for success
• Members can join forces to do this effectively

11. People: next step in real estate ESG research
The economics of (un)healthy buildings
11
• Outdoor air pollution leads to premature deaths,
school absences, productivity loses…
• But …
• Average individual spends 90% time indoors
• Indoor concentrations up to five times higher than outdoors
• Not much known about health/productivity effects in “normal” buildings

12. 12
Individuals living in bad housing conditions report
3.6% more often bad or poor health status
4.6% worse score on mental health scale
12.5% higher number of doctor visits
comparable sick leave
Older respondents (above 64)
28% more doctor visits than average individual
Health in homes
Estimation results include individual fixed effects, socio economic controls and movers

13. 13
Summer 2016
Opening of new city office
70% of 1500 civil servants moved
We employ surveys and personnel data
Survey before (n=630)
and after (n=670) moving
Perception indoor climate
Job satisfaction
Health
Individual administrative data
Sick leave
Productivity measures
Moving to productivity
Quasi-natural experiment in Venlo

14. 14
Moving to productivity
Sick building syndrome
Percentage of individuals reporting symptoms related to sick building syndrome

15. About GRESB Real Estate

16. MISSION
Enhance and protect shareholder
value by assessing and
empowering sustainability practices
in the real asset sector

17. 2009
Assesses the ESG
performance of
property companies,
funds and developers
2015
Assesses ESG
performance of real
estate lenders
2016
Assesses the ESG
performance of
infrastructure assets
and portfolios

18. Institutional Investor Members
Integrate ESG data | utilize GRESB analytic tools

19. TRANSPARENCY RISKOPPORTUNITY
Institutional Investors
Assessing companies and private equity funds

20. Efficient
Capital
Markets

21. Sustainability Performance
LeadershipRegulation
Market Behavior
Distribution of activity | all economic sectors

22. Sustainability Performance
LeadershipRegulation
Real Estate Market
Economic signaling
Buildings

23. ESG Performance Leaders
Engagement
GRESB Real Estate Assessment
Private equity funds | separate accounts | private + public REITs | JVs & club deals
Portfolios

25. ESG Engagement Drivers
Top down, bottom up
Capital
Market
Company
Portfolio
Building
Institutional Investors
CAPITAL
REITs
Private Equity
Portfolio Manager/
Asset Manager
Property Manager/
Facility Manager
COMMITMENT

26. Strong Industry Support
All major industry associations globally

27. Competencies
Understanding and improving ESG performance
Systematic assessment
companies | funds | separate accounts | JVs
Objective scoring
ESG performance – environmental | social | governance
Peer benchmarking
differentiate market
participants
0 - 100

28. The Assessment

29. PORTFOLIO OWNERS
REAL ESTATE
DEVELOPERS
INSTITUTIONAL
INVESTORSSTRUCTURED
COMMUNICATION

30. PLAN
DO
CHECK
ACT INDICATOR
ISO-approach
Systematic

31. Policy & Disclosure
Building Certification
Monitoring & EMS
Management
Performance Indicators
Risks & Opportunities
Stakeholder
Engagement
Assessment Aspects
Number of indicators

32. 8.8%
9.5%
12.4%
8.8%
10.9%
25.2%
24.5%
Assessment Aspects
Number of indicators
Policy & Disclosure
Building Certification
Monitoring & EMS
Management
Performance Indicators
Risks & Opportunities
Stakeholder
Engagement
GRESB
SCORE

33. 8.8%
9.5%
12.4%
8.8%
10.9%
25.2%
24.5%
GRESB
SCORE
Policy & Disclosure
Building Certification
Monitoring & EMS
Management
Performance Indicators
Risks & Opportunities
Stakeholder
Engagement

34. Scoring of Performance
Two dimensions

35. The GRESB Scorecard
Aggregated business intelligence into market advances

36. Participant Information Tools
Aggregated business intelligence into market advances
Scorecard
Free to all participants
Comparative Intelligence
Benchmark Report
GRESB Member benefit [available ala carte]
Management Introspection
Portfolio Analysis
GRESB Members only
Advanced Analytics

37. 2016 Results

38. 2016 GRESB Participants
≈200 listed property companies | ≈ 560 private property companies

39. Participation Learning Curve
Leadership through consistency

40. Global Scope
2016 industry coverage
759 Entities | 63 Countries | 66,000 Assets

41. Geographic Distribution
2016 Global response rate

42. Investment Capital
Assets under management [$B]

43. 2016 Global Results
Scoring and benchmarking ESG performance

44. Performance Indicators
Like-for-like consumption 2014-2015
73,988 Homes
Energy
90,197
passenger cars
Carbon
1,200 Olympic pools
Water
14,963 truck loads
Waste

45. ESG Performance Leaders
ESG Engagement | Disclosure
Management quality / investment risk profile
Portfolios
3.9x
The difference in overall
GRESB score between
the Top 10% and
Bottom 10% entities in
2016

46. Questions?

47. © 2017 GRESB BV
Unless explicitly stated otherwise, all rights including those in copyright in publication are owned by or controlled for these purposes by
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written permission.
Sander Paul van Tongeren
Managing Director
sp.vantongeren@gresb.com
+31 62704 5730 – mobile
+31 20 774 0220 – office