ESG Strategy

Sonae Sierra’s ESG – Environmental, Social, and Governance – strategy helps our clients find the best pathway and tools to unleash the sustainable value of their assets.

We are an early pioneer in integrating sustainability in the real estate business. Our teams provide services that cover the entire lifecycle of the assets. And our wide range of solutions allows us to devise and implement the best ESG strategy according to our client’s needs.

We help our clients pinpoint environmental and social challenges and opportunities, specifically related to their business strategy, through a materiality assessment. To allow our clients to stay ahead of the competition and further increase revenue over time, our ESG strategy teams will also carry out stakeholder mapping and assessment, and draw up an engagement strategy.

Your business can also be leveraged by developing an ESG strategy capable of raising the sustainability profile of your asset, or portfolio of assets, in addition to advancing their health and well-being.

What is ESG?

ESG stands for Environmental, Social, and Governance. ESG strategy works as a set of criteria that functions as the standards for companies operating under a socially conscious framework. These are often analysed by potential investors when looking at potential investments.

The environmental part of the ESG strategy may include how a company uses and manages its energy or waste, how they contribute to the conservation of natural resources, as well as the potential environmental risks it may face, and how they are being managed.

The social attribute of an ESG strategy deals with the business relationships developed by companies: who they work with, how they contribute to local communities, their employees working conditions, or how stakeholder’s interests are taken into account.

Finally, governance in an ESG strategy looks at how much transparency there is in accounting and reporting, how stockholders can be involved in important business decision processes or the avoidance of possible conflicts of interests, and even the practice of political contributions in exchange for a more amiable treatment.

No one company can be stellar in all areas of an ESG strategy. Different companies employ a different ESG strategy and agenda, leaving potential investors to decide what is more important to them.

ESG Strategy as a core investment decision-making process

When deciding the importance of an ESG Strategy to the decision-making process, a debate often arises: does it have a positive impact on financial returns?

The answer is divided into two different components.

First, an ESG Strategy should not be seen as if detached from the general strategy of a company. Especially when we know that real estate companies have an established and long-term impact on the environment and society as a whole. ESG Strategy should be included as part of a company’s risk management operations.

Second, companies that are capable of thinking with a long-term mindset concerning ESG, often have a likewise long-term perspective regarding their financial returns’ strategy. What this means is that the fundamental decision-making process will present itself as being more structured instead of cyclical.

Retail is a case in point. Long-term thinking on subjects like sustainability and their impact on customers leads to consideration of how an asset might be used over time, which, in itself, helps make long-term decisions involving customers’ shopping habits, for example.

Sustainability Strategy

To establish a sustainability strategy, our teams of experts at Sonae Sierra, begin by establishing with our clients their social and environmental goals. Then, to ensure they are met, performance indicators are identified, accompanied by a monitoring and reporting methodology that guarantees the objectives previously established are accomplished.

In either the development or operations phase of a project, we develop an ESG Strategy for your asset (or portfolio) that leverages your business overall strategy. We pinpoint environmental and social challenges and opportunities and carry out stakeholder mapping and assessment in order to draw up an engagement strategy.

Would you like to find out more about ESG Strategy?

Contact us, our team is happy to help you!