Sector engagement

We are committed to working in partnership with the industry to promote the uptake of sustainability initiatives. Only in this way can we all take full advantage of the opportunities, and in the process improve the built environment while managing risk and enhancing returns.

Towards sector wide green leases Recognising the need for a sector wide approach to green leases, we contributed to the BBP Green Lease Working Group. The BBP ‘Green Lease Toolkit’, launched earlier this year, not only provides model form drafting for a green lease, but also a model form Memorandum of Understanding which can be implemented by owners and occupiers at any stage of their lease relationship across all property sectors.

Ensuring compatibility across benchmarks
We believe that robust sustainability metrics and benchmarks are a fundamental requirement to ensure the effective factoring in of sustainability within the valuation process. We are, therefore, committed to promote their development and use across the property sector.

We participate in a number of syndicate benchmarking services to monitor our internal performance and compare it against our peers: Upstream JLL’s ‘The Third Dimension’ and Operational Performance Benchmarking and the IPD/IPF Sustainable Property Index (ISPI).

The number of commercial services being offered is, however, increasing and while this can be considered a positive development there is a real risk that it will create ‘data confusion’ and that it will undermine the drive towards comparability and the emergence of an agreed sector-wide system. Thus, we are working closely with various industry bodies, including the BBP, Green Property Alliance (GPA), British Property Federation (BPF) and IPD, to ensure that the sustainability metrics used in these systems are compatible and the outcomes can be used effectively.

Sustainability disclosure
Full transparency will only be achieved once we start disclosing sustainability data and results at corporate level.

Developing a global reporting standard
Disclosing our sustainability performance in accordance with a real estate standard ensures we are transparent about our data reporting and allows third party assessment and verification of our achievements. It is important to ensure that data disclosed is comparable, and we are working with the industry to develop a standard to measure and disclose sustainability data and information.

Hermes, with the BPF and the UK Green Building Council are representing the UK property sector in an international consortium committed to establishing a global disclosure standard for the real estate and construction industry: The Global Reporting Initiative Real Estate Sector Supplement. This work will be undertaken over the next 2 years, including consultation with UK sector organisations, including the Green Property Alliance and the BBP.

Networks
In the spirit of contributing and exchanging best practice we are committed to working with the industry to promote responsible property investment.

We are active members of:

• British Property Federation Sustainability Committee
  
• UK Green Building Council (Gold Leaf Founding Members)
  
• Better Buildings Partnership (Founding Members)
  
• UNEP Finance Initiative Property Working Group
  
• Institutional Investor Group on Climate Change, Policy and Property Working Groups

Third party recognition of our responsible investment work:

• BT Pension Scheme, our biggest client, scored 100% in the Fair Pensions Responsible Investment Survey released in April 2009 making it equal top with USS;
  
• BT Pension Scheme has been ranked top in the UK Sustainable Investment and Finance survey, ‘Responsible Business: Sustainable Pensions 2009’;
  
• Hermes Property Unit Trust, our open fund, scored first on overall environmental performance in the Environment Agency Pension Funds and Aviva’s ‘Unlisted Real Estates Funds - Environmental review’ published in April 2008.