Our basis for sustainability
ESG: Environment - Social - Governance
The 3 pillars
Here the focus is on generating and using renewable energies, minimising the use of non-renewable resources and energy consumption and reducing pollutant emissions.
This pillar is based most closely on the original idea of not over-exploiting nature. This means only using the natural foundations of life to the extent that they are able to regenerate themselves.
Includes aspects such as occupational safety and health protection, diversity or social commitment.
A state or society should be organised in such a way that social tensions are limited and conflicts cannot escalate but can be resolved by peaceful and civil means.
This basically means sustainable corporate governance. This includes topics such as corporate values or corporate governance control and monitoring processes. A society should not live economically beyond its means, as this would inevitably lead to losses for future generations. In general, an economy is considered sustainable if it can be operated on a permanent basis.
In the LHI Group
For the LHI Group, sustainability is regarded as a concept that supports the company.
Companies are successful in the long term if they are managed with a long-term view. We take into account what the long-term consequences will be when making current decisions.
The LHI business areas follow exactly this concept.
Structured Finance is geared to the long term. On average, the commitments last 20 years and the customer relationships are just as long-term.
In the area of investments, a decisive factor for success is the question of how sustainable a product is.
LHI has a sustainability advisory board consisting of employees from different departments of the LHI and one external advisor; in future this will be two external advisors. The Advisory Board meets at least twice a year.
LHI has established reporting with the basic aim of fully meeting all requirements of the EU Disclosure and Taxonomy Regulation. In addition to the Sustainability Advisory Board, a project group will elaborate specific implementation proposals by the end of the first quarter of 2021, as to how existing reports may need to be supplemented, provided that the requirements have not already been fulfilled.
The general guideline is the Principles for Responsible Investment (PRI) of the United Nations, as it currently stands, and the GRESB standard.
LHI has joined the ESG-Circle of Real Estate (E.C.O.R.E.) industry initiative. The aim of the initiative is to develop a uniform Real Estate ESG scoring as a standard for the global/European real estate market by the end of 2021 through the industry's collaborative approach.
Until an industry standard is adopted, our proprietary LHI scoring model, which makes it possible to assess the environmental, social and governance (ESG) profile of real estate investments in different real estate use classes, will continue to be used as a differentiator.
The LHI Group is currently in the process of working with the renowned company Fokus Zukunft GmbH & Co. KG to determine its own carbon footprint for 2019 and thus to evaluate the steps taken in recent years in order to identify further useful measures.
The EU “Sustainable Finance” Action Plan sets out three main objectives::
- Reorientation of capital flows towards a more sustainable economy.
- Better mapping of financial risks arising from climate change, climate regulation, waste of resources, environmental degradation and social problems in investment and financing decisions.
- Greater transparency and long-term orientation of financial and real economic activities and decisions.
One of the measures under the Sustainable Finance Package is the proposal to introduce a standardised classification system, or what is known as taxonomy. Since 2018, LHI has been looking at the importance of an upcoming EU taxonomy for asset management and institutional investors in detail as part of its corporate values and takes this into account in its investment decisions.