What is ESG and why do we care?
ESG stands for Environmental, Social and Governance, referring to three central factors in measuring the sustainability of an investment. Our experienced team at RentFlow sees the benefits of integrating these factors into our investment decision-making. We know that a focus on people, the planet, and profits are equally important for any investment portfolio to be sustainable.
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Environmental criteria look at how a company contributes to and responds to issues including waste, pollution, greenhouse gas emissions, deforestation, and climate change. Social criteria look at how the company treats people, including human capital management, equal opportunities, work conditions, and health and safety, while governance criteria look at aspects like confidentiality, tax practices and strategy, corruption, and board structure.
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Investments are more likely to succeed if they create value for all stakeholders – investors, tenants, employees, advisors, suppliers, and wider society including the environment. This simple idea is at the heart of our ESG approach at RentFlow, where we ensure that each portfolio is sustainable long term. This allows us to build a framework where we deliver fixed monthly returns, and no one is left behind.
Why we care
It makes investment sense
We know that a well-run, responsible company that cares about tenants, investors, and wider society is more likely to be resilient and outperform its competitors than one that does not. ESG considerations improve the fixed return potential by reducing investment risk and creating investment value. The ESG possibilities associated with a property inform our future investment decisions due to the direct impact on financial performance. Our recent initiatives report provides a valuable insight into the ESG factors which have a significant impact on the performance of our current properties.
Our clients care
The merits of embracing ESG in investments and the multifamily sector have become increasingly evident over the last few years. Health, wellbeing, and environmental considerations have been moving up the list of priorities for redevelopers, funders, governments, and occupiers, as well as investors across the globe. A recent Deutsche Bank/Global Sustainable Investment Alliance survey concluded that investor interest in ESG will keep growing exponentially. ESG analysis considers how companies serve society and how this impacts their current and future performance, contributing to our transparency and easing client concerns.
Going further than regulation allows us to face up to sustainability challenges while making good long-term investment decisions
With climate change, the urgency increases to move to a more sustainable built environment. Direct contribution to climate change adaptation often occurs after the provision of frameworks through legislation. Instead, we are always exploring how to make our rental properties more sustainable and putting this into action. We recognize that our capital allocation decisions have a real impact on the world; we ensure that our rental properties are constantly improving, creating a win-win-win scenario for investors, tenants, and the environment.
Our ESG initiatives
Working closely with an ESG consultant was the first step in our compliance journey. Siofraidh Finn-Healy is a graduate of Trinity College Dublin with a BA in Business and Economics, and of the University of Bristol where she studied Environmental Policy and Management, MSc.
The document below lists of some of the environmental, social and governance initiatives that RentFlow has adopted to date.
Our approach to ESG analysis
Our ESG philosophy is built on the belief that the application of ESG analysis can improve our returns. Understanding how improvements in each area will influence our portfolio is an integral part of our success with investing. We pursue meaningful ESG improvement by identifying risks and opportunities and responding to these in the way that maximizes our return. Fixed returns of 5% per annum for 5 years are possible as we actively mitigate our ESG risks.
There are many ways to incorporate ESG into investment decisions. Looking at our company from E, S and G perspectives allows us to analyse our standing relative to peers. The quality, comfort and environmental credentials of rental properties are often poorer when compared to owner-occupied homes. With a clear social and environmental imperative to move to a more sustainable rental sector, RentFlow can improve standards of life for private renters and cut carbon emissions.
There is no one way to apply ESG: RentFlow applies ESG into every stage of the BRRRR investment process to achieve our strategic objectives. We buy properties which align with our ESG values. Focusing on the redevelopment of existing buildings allows us to preserve Dublin’s cultural heritage and reduces the environmental impact associated with new developments. We then refurbish each property, improving social and environmental standards throughout. When renting each unit we achieve full tenancy by offering affordable apartments and ensuring our property management company is available to solve any of our tenants’ concerns. And finally we achieve professional governance standards when refinancing these properties to our investors. But ESG analysis is not just about what the company is doing today. Consideration of future trends is critically important for a company’s future profitability. This is why we constantly strive to improve our portfolio, products, and the standard of living of those living in our properties with a keen focus on potential new ESG initiatives.
