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Equites’ strong ESG score takes the leading position

25 November 2022

At Equites, a focus on environmental, social and governance (ESG) is central to our business strategy and operations across our property portfolio in South Africa and the UK.

ESG Officer, Irshaad Wadvalla, shares more on our commitment to ESG, how our efforts are being recognised globally and what the future holds for our upcoming developments.

We have embedded ESG elements throughout our value chain, which begins at the inception of each property development, through to the operational management of the buildings once completed. Our commitment to social mobility is driven by the need to generate meaningful change in the communities in which we operate, and our internal governance processes form a key pillar of our sustainability efforts.

Equites undertook its third annual ESG assessment in FY22 by Sustainalytics, the global ESG ratings firm, which resulted in the group risk score improving by 34%, while the management of the risk score increased by 64%, when compared to the previous year.

These strong scores resulted in Equites moving into the leading position in our global peer group by value and ranking in the top 3% for low ESG risk globally.

 

“We are always looking for ways to improve our scoring on all aspects of ESG — and enhancing our processes and finding innovative ways to improve remains key to achieving this,” says Wadvalla.

 

Factoring in all aspects of ESG

We not only carefully consider how our buildings impact on the environment, but also how these sites affect the communities in which they are being built.

For example, when looking to acquire sites, we consider factors such as the interrelationship between the development and existing buildings in an area. We engage local communities through a dedicated community engagement partner on each new development to ensure that a minimum stipulated local labour content of 30% is achieved. At the end of the project, a detailed close out report is provided to the Equites Ampcore team, who identify potential SMMEs from the labour pool database that can be trained and onboarded into the enterprise supplier development programme.  

During the development of a building, the use of local materials is preferred, in addition to the use of recycled materials that are onsite — nothing is disposed of unnecessarily. We uphold an intensive ESG management process that ensures that the development and contractors adhere to required guidelines in line with the group’s ESG strategy.

Very importantly, we also ensure that buildings are water and energy efficient — aspects that drive demand for space within the portfolio as they generate a direct economic benefit to the occupier.

 

Responding to the growing demand for sustainable buildings 

Increasingly, occupiers are looking for buildings that are sustainable to reduce both their costs and environmental impact. The pivot towards ambitious carbon reduction targets is sometimes driven by a group or corporate strategy in which it is a requirement to rent premises that fulfil their own sustainability objectives.

Furthermore, many investors consider ESG metrics as important factors that influence their decision-making when it comes to investing in a company.

By implementing the right processes that enhance our ESG scoring, Equites is able to access competitive sustainability-linked financing mechanisms, which bodes well for the group.

 

Our commitment to ESG for new developments 

Last month, we concluded a R2bn debt refinance and upsize package with Standard Bank South Africa, comprising an R800m three-year sustainability linked (SL) unsecured listed bond; a £50m two-year SL loan, including a £25m upsize, and a R221m three-year loan.

The bank grants these facilities under the ESG commitments made by Equites to ensure that all our new developments are green certified, to increase renewable energy consumption across our portfolio of high-grade logistic assets annually, and to increase our investment with enterprise and supplier development partners as part of our Ampcore programme.

Ampcore was established in October 2020 as a property management initiative to uplift small, medium and micro enterprises (SMMEs) affected by the COVID-19 pandemic.

 

Celebrating other sustainability driven victories 

Some of the achievements that we’ve seen in 2022 include the fact that females account for 71% of SMMEs in the Ampcore Enterprise Supplier Development Programme.

Amazingly, our Ampcore Social Responsibility Programme has exceeded its 20% sustainability linked bond target for enterprise development by spend per annum by 102%.

Considering another win, 80% of all Equites’ SA properties that have undergone EDGE green building certification have achieved the EDGE advanced rating. The advanced rating is awarded to a building for achieving a minimum energy efficiency of 40%. The EDGE rating focuses on energy, water and embodied energy efficiency.

Additionally, solar PV generated energy in our portfolio during the first half of the 2023 financial year increased by 36% to 8.3MW.

We’re thrilled with every achievement that enables the success and upliftment of the environment, surrounding communities and our team, as well as stakeholders — and we’re committed to continuing along this trajectory.

To learn more about our sustainability initiatives, please visit our ESG information centre.

 

© 2023 Equites Property Fund Ltd.
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