Site url: https://www.momentum.co.za/momentum/personal/investments/invest/offshore-investing/global-matters/weekly-digest/global-matters-weekly-blog-build-in-esg
Pagecontext: org.apache.jasper.runtime.PageContextImpl@c3b97737
NameValue
breadcrumb.start.level4
ibm.portal.instantiation.page.include.descendantsfalse
param.sharing.scope.{http://www.ibm.com/xmlns/prod/datatype/content}ibm.portal.sharing.scope.page
param.sharing.scope.{http://www.ibm.com/xmlns/prod/datatype/content/resource-collections}ibm.portal.sharing.scope.page
param.sharing.scope.{http://www.ibm.com/xmlns/prod/websphere/portal/v8.0/portal-contextual-portal}ibm.portal.sharing.scope.page
wcm.template.oidZ6_48GC1K80O0FH90QS83FHN530K6
flush.cache?01102021
param.sharing.scope.{http://www.ibm.com/xmlns/prod/websphere/portal/publicparams}path-infoibm.portal.sharing.scope.page
breadcrumb.enabledtrue
param.template.pageZ6_48GC1K80O0FH90QS83FHN530K6
page.keywordsOffshore investing
param.sharing.scope.{http://www.ibm.com/xmlns/prod/websphere/portal/v7.0/portal-contextual-portal}ibm.portal.sharing.scope.page
hide.from.menutrue
hide.childrentrue
breadcrumb.stop.level4
dynamic.sitemapfalse
param.sharing.scope.{http://ibm.connections.com/portlet}ibm.portal.sharing.scope.page
page.robotsall
label.namepersonal
sitecontext:personal
ibm.template.oidZ6_48GC1K80O0FH90QS83FHN530K6
menu.dividertrue
menu



Jackson Franks | 21 August 2023

Build in ESG

Share this article

According to the International Energy Agency (IEA), real estate generates 40% of global CO2 emissions. The sector is therefore critical to global efforts to meet the Paris Climate Agreement’s target of limiting average temperature rise to well below 2°C. With two-thirds of global building stock expected to endure into the 2040’s, significant investment in decarbonisation efforts across existing infrastructure is required, alongside increasingly stringent (and capital-intensive) new-build regulations. Here in the UK, the Minimum Energy Efficiency Standards (MEES) are set to tighten by 2030, with all tenanted commercial property buildings requiring an Energy Performance Certificate (EPC) rating of at least a B. Meeting these requirements will demand substantial investment as it's estimated that up to 70% of commercial property space could be at risk of non-compliance.

At Momentum we believe it is vital for the sector to manage and reduce these levels. We hold the same expectation for our Real Estate Investment Trusts (REITs) in which we invest, as well as our in-house real estate fund, MAREF (Momentum Africa Real Estate Fund).

Momentum invests both directly and indirectly into the real estate sector via MAREF, a pooled vehicle facilitating investment in African real estate for our clients and REITs. Although these are two different investment approaches, the Environment Social and Governance (ESG) criteria do not differ. Quantifying ESG criteria within the real estate sector is simpler than other sectors due to the tangible living nature of a property. Environmental factors consider water and energy consumption as well as emissions from the building. Social factors consider the societal impact of the development (infrastructure, housing, job creation etc) as well as the health and wellbeing of its occupiers. This has become an even more important factor since COVID-19. Governance factors consider aspects such as diversity and reputation which can be applied to both the landlord (if invested indirectly) and the occupiers. Additionally, safety measures such as fire safety will be applicable towards governance scores.

In MAREF, we uphold stringent ESG standards. This commitment was recognised when we received EDGE (Excellence in Design for Greater Efficiencies) certification for our assets in Ghana in April 2023. EDGE is a green building certification system developed by the International Finance Corporation (IFC). Additionally, we are working towards Leadership in Energy and Environmental Design (LEED) silver certification for our current project in Nairobi, Kenya. Similar to EDGE, LEED was developed by the US Green Building Council to set a benchmark for design, construction, maintenance, and operation of high-performance green buildings. IFC EDGE and LEED are comparable to BREEAM in the UK. In terms of the social aspect of ESG, one of MAREFs core principles is job creation. Throughout the construction period MAREF upskills staff so those with the most basic jobs can be trained in more specialist roles, thereby strengthening their future employability. MAREF prides itself on offering international Grade A standard facilities in developing markets thanks to the expertise of our sister company and developer, Eris Property Group (fellow subsidiary of Momentum Metropolitan Holdings).

The indirect investments, the REITs in which MGIM’s daily dealing funds invest, have well-defined ESG policies that they strictly follow and are accountable for. Throughout our investment process, ESG principles hold significant weight as a key criterion. Not only do we expect managers to aim for the highest ESG standards, but also to provide concrete evidence demonstrating their successful efforts in implementing their ESG strategies. This proactive approach involves efficient management of energy, waste, water, materials, and carbon emissions. Such efforts are demonstrated through the day-to-day management of assets, wherein they work to minimise the carbon footprint of their portfolio while maintaining excellent service standards for their occupants.

At Momentum, we are committed to contributing to a more sustainable world, both through direct actions and indirect means. For this aspiration to be realised, it's essential for everyone to actively participate in propelling the implementation of ESG practices forward.

Share this article

In case you missed it

14 AUGUST 2023

Decision time


Alex Harvey

Companies can shield themselves (and their investors) from the effects of inflation, which remains the key macro investment risk today.

7 AUGUST 2023

Undervalued Forgotten Opportunities: UFOs in your asset allocation

Matt Connor

Diversification is central to portfolio construction and allows investors to reduce unsystematic risk and capture other sources of return.

31 JULY 2023

Taking the fixed income tack in multi-asset portfolios

Gregoire Sharma, CFA

There is a strong case for fixed income in multi-asset portfolios, locking in high levels of income with potentially significant capital gains.

This Web Content Viewer is associated with the current page. To associate web content, add content to the portal page by choosing Create Content from the current page in Site Manager. Alternatively, use the Content Spot dialog or the Edit Shared Settings mode of the Web Content Viewer to select the content to display. Learn More about Content Settings

We and our selected partners use cookies to enhance and personalise your experience on our website.Please see our cookie policy for more information.

To enhance your user experience on our site, learn more about our supported browsers

Your browser's cookies are disabled. Enable cookies to ensure our website functions correctly. View our Privacy Notice.

Tell us more!

We're always looking for ways to improve your online experience. Please take a moment to complete the
2-minute questionnaire.