Redefine wants to be ESG leader in SA
THE COVID-19 pandemic had galvanised Redefine Properties to deepen its environmental, social and governance (ESG) in the business, which were being integrated into the strategy and day-to-day operations, said Redefine chief executive Andrew König.
In a presentation yesterday, König said that the group aimed to be an ESG leader in the South African real estate sector.
“While we have developed our ESG strategy over the past few years, the Covid-19 pandemic has emphasised the importance of embedding ESG considerations in our strategy to ensure sustainability and it has prompted us to accelerate the execution thereof. More than ever, we must measure ESG risks and manage them,” he said.
On strategy, he said the immediate focus was to deal with the consequences of the lockdown and the exit from it, and the longer-term focus was to position for the recovery phase to ensure continued relevance and sustainability.
Redefine head of ESG, Anelise Keke, said investors were also sharpening their focus and basing their investment decisions on ESG performance.
Rating agencies were increasingly integrating ESG factors into credit-rating analysis.
She said proactively adapting to climate change could provide funding and investment opportunities, while a strong ESG performance by the group would also attract sustainable tenants.
Employees wanted to work for responsible companies and the retention and motivation of the workforce depended on employees’ connection to their company’s purpose and meaning. She said a strong governance framework could help avoid corporate failures, while managing ESG-related risks also mitigated reputational harm.
Some of the challenges of integrating ESG into the group included allocating the time, resources and systems that were needed to conduct certain ESG initiatives, such as doing impact assessments and due diligence.
Another challenge was meeting multiple reporting mechanisms, which could complicate reporting. Covid-19 had delayed financial and sustainability reporting.
There was also inconsistency in the approach to ESG among investors, local and international, and by ratings agencies and proxy advisers.
On the environmental front, progress was being made with solar power on the group’s buildings, and these and energy management saw like-forlike energy consumption reduce by 37 percent in 2019, compared with 2018. Some 5 percent of the group’s energy consumption was now provided by solar power.
Better water management had resulted in a 9 percent reduction in kilolitres consumed over the gross lettable area in 2019, compared with 2018.
Corporate social investment initiatives and community engagement had been broadened, the level 3 BBBEE rating had been maintained, employee engagement and ethics scores outperformed benchmarks, employee wellness and training initiatives had been implemented, no staff had been retrenched through Covid-19, while health and safety protocols were applied to key stakeholders.
On governance improvements performed, an independent non-executive chairperson had been appointed, the independence of 100 percent of the non-executive directors had been achieved, a 60 percent female and 60 percent black board was in place, an assurance framework for risk management, IT and data governance protection systems had been implemented, internal conflict of interest, gift declaration and procurement policies had been updated, while the whistleblower and grievance mechanisms had been relaunched and implemented.
Redefine’s shares closed 2.21 percent higher at R3.24 on the JSE yesterday.