DNB REIM shall develop an ever higher environmental standard for the commercial buildings in the portfolio, in line with new technology and in accordance with all applicable requirements, to the benefit of investors, tenants, employees and society.
We must comply with all statutory government requirements related to the external environment. We will reduce the impact on the environment and climate, by continuously promoting new behavioral patterns, products, services and technical solutions that can reduce CO2 emissions. Environment and climate are integrated into our daily operations. All tenants achieve added value through increased profitability and reduced environmental impact. Climate risk is continuously managed.
DNB REIM AS focuses on sustainability as an integral part of the investmentprocess, the day-to-day management of the real estate portfolio as well as the fund management. Sustainability in this context means environmental, social and governance conditions (ESG).
The company's vision is «DNB Næringseiendom AS - for People and the Environment».
DNB REIM believes in a strong connection between a high environmental standard and competitiveness and aims to be one of Norway's leading commercial real estate companies.
The company is certified in accordance with ISO 14001 (environmental management) which helps to ensure quality in the follow-up within these areas. As a manager of a commercial real estate portfolio we have a special focus on the environmental issues in management of the property portfolio. This applies to investments in properties, project investments (existing buildings) and ongoing operations. This also applies in the management of alternative investment funds.
Through investments and management of the real estate portfolio, the company has an impact on the external environment. This applies within, for example, the areas of energy, waste management and emissions in connection with real estate projects. Climate change can have a negative impact on the real estate portfolio through increased extreme weather in the form of, for example, storms, floods and torrential rains. This can, amongst other things, lead to an increased degree of water penetration in the buildings and thus lead to material damage and lost rental income.
DNB REIM´s target is to develop an ever higher environmental standard for the commercial buildings in the portfolio, in line with new technology and in accordance with all applicable requirements. We must comply with all statutory government requirements related to the external environment. We help reduce the impact on the environment and climate, by continuously promoting new behavioral patterns, products, services and technical solutions that can reduce CO2 emissions. This will also help to give our tenants and clients an added value through increased profitability and reduced environmental impact. In addition, there is a focus on reducing the risk associated with climate change.
Policy and strategy shall be reflected in all our activities and followed up with specific objectives and measured by adequate methods. Sustainability risks are integrated in the investment decision-making and risk monitoring of the portfolio to the extent that they represent a potential or actual material risks and/or opportunities to maximizing the long-term risk-adjusted returns. Materially relevant sustainability risks are incorporated into due diligence and research, asset selection, portfolio construction, and ongoing investment monitoring alongside with other material risk factors. Sustainability risks are identified, measured using the likelihood of occurrence of each of them, and should one occur, managed and monitored on an ongoing basis.
a) Environmental focus in the daily operation of properties:
DNB REIM is in the management of commercial properties concerned about the environmental aspects of the business.
b) Environmental focus when investing in commercial property
Environmental issues are important aspects of investments in commercial real estates and environment as such is given emphasis. New investments are carried out in line with the current strategies and plans for the relevant portfolio. Environmental aspects are assessed together with other criteria at an overall level early in the sourcing process, whereof one criteria is buildings of a higher energy class according to the EPC (Energy Performance Certificate).
If the buildings are of a lower energy class the cost of bringing the building up to a higher class will be demonstrated and taken into account in the investment decision. In documentation before the investment decision, this is emphasized and in the DD (due dilligence) process before purchase a separate technical DD will be carried out according to the investment policy for the relevant portfolio.
c) Environmental focus in project implementation
Environmental programs will be established for all construction projects carried out by DNBREIM, with the exception of projects that are considered to have minor environmental impact. In the environmental program, the project targets are set within the current project. In general, there is an objective for energy consumption to be improved in the project. In larger projects, the objective is to achieve energy mark B according to the EPC.
As a manager of a real estate portfolio and alternative investment fund, there is a risk of changes in current legislation, such as new and changed requirements for real estate management and project implementation. This can lead to increased costs and thus reduce the return to the clients. Furthermore, there is a risk of breaches of, for example, requirements set out in the privacy ordinance and the money laundering regulations. Any breach of requirements may result in fines and reduced reputation.
As part of the DNB Group, DNBREIM is subject to a comprehensive framework to ensure compliance of current regulations. In addition, special guidelines have been established for the manager, adapted to its activities. A framework has been established in connection with AML (anti-money laundering), terrorist financing, sanctions, anti-corruption and privacy, and risk assessments are carried out to clarify the need for further measures.
A policy for supplier management has also been established to ensure that suppliers who are engaged meet the requirements for sound business operations and that goods and services are produced and delivered in a socially responsible and sustainable manner. This means, amongst others, that a risk assessment must be carried out before entering into an agreement with suppliers.
Internal electronic courses have been prepared within the mentioned areas which are mandatory for all employees. This is to ensure competence internally and thus reduce the risk of breaches.
DNB is a driving force for equality and diversity. We will have a gender balance (40/60) in all management positions in DNB Group. Through products, services and dialogue, DNB will contribute to promoting equality among our customers. We also require our largest suppliers to work systematically on gender equality and diversity in their own organization.
DNB has received several awards and awards for the work they have done so far, and the last received award is that DNB was ranked as the best European bank on gender equality in the Financial Times Diversity Reports 2021.
Some useful articles related to Social responsibilities:
UN´s sustainability goals - DNB Furthermore, DNB is heavily involved in preventing financial crime. In 2020, DNB's customers were attempted fraud for NOK 1.4 billion, 82 percent of these attempts were stopped by DNB.
At DNB, employees are valued and rewarded based on responsibility, performance and behavior with a fixed salary. Where variable remuneration is used, this shall promote long-term profitability and be determined on the basis of a comprehensive assessment of financial and non-financial targets.
When assessing results, risk shall be taken into account and excessive risk-taking shall not be stimulated or counteract socially responsible business operations, including the requirements laid down in the Code of Conduct. Behaviors that build the desired culture related to performance, development, interaction, competence sharing and flexibility must be valued. At the individual level, it is a guiding principle that all rewards should be based on comprehensive assessments of the employee's contribution to achieving the company's and the individual's goals. Goals are set annually for the company and the individual employee, both financial and non-financial goals. This applies, for example, to goals related to compliance as well as contributions to goal achievement within the area of the external environment, including environmental certification of buildings, waste management, energy use, etc.
A “Sustainability Risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investments.
Sustainability risk is principally linked to climate-related events resulting from climate and environmental change (so-called physical risks) or to the society’s response to climate change (so-called transition risks), which may result in unanticipated losses that could affect investments and financial condition. Social events (e.g., inequality, inclusiveness, labour relations, investment in human capital, accident prevention, changing customer behavior, etc.) or governance shortcomings (e.g., recurrent significant breach of international agreements, bribery issues, products quality and safety, selling practices, etc.) may also translate into Sustainability Risks.
Sustainability risks generally revolve around the following themes:
- physical threats (e.g. extreme weather, climate change);
- changes to regulation (e.g. greenhouse gas emissions restrictions, governance codes);
- brand and reputational issues (e.g. poor health & safety records, cyber security breaches); and
- supply chain management (e.g. increase in fatalities, lost time injury rates, labor relations).
As the frequency of extreme weather events increases, assets exposure to these events increases too. Water astrayis an example of such risk. Flooding and other forms of water penetration may cause damage requiring refurbishment works. In the event of a more severe flood or other incidents, parts of the building might be incapable of being occupied for a period, resulting in potential loss of rents.
Sustainability risks are integrated into the investment decision-making and risk monitoring of the portfolio to the extent that they represent a potential or actual material risks and/or opportunities to maximizing the long-term risk-adjusted returns. Materially relevant Sustainability Risks are incorporated into due diligence and research, asset selection, portfolio construction, and ongoing investment monitoring alongside with other material risk factors. Sustainability Risks are identified, measured using the likelihood of occurrence of each of them, and should one occur, managed and monitored on an ongoing basis.
