Sustainable conduct at Institutional Investment Partners

This English version is provided for convenience only. In the event of any discrepancy, the German version shall prevail.

Our convictions

Since the company was founded, the core benefit and value proposition for the investors and employees of Institutional Investment Partners (‘2IP’)* and its group of companies has been based on giving sustainability factors significant weight in all of its activities and services.

Driven by the market position we have achieved and the resulting increase in our responsibility to society – but also by general developments in society – it is our principal aim to use our own sphere of influence to make a meaningful corporate contribution to a sustainable environment and society.

For this reason, 2IP has translated the general principles of sustainable corporate governance into its own company-specific sustainability strategy, which makes sustainable conduct within and by our company binding and also takes into account any adverse impacts of investment decisions on sustainability factors.

*Institutional Investment Partners GmbH, Frankfurt am Main, and Institutional Investment Partners S.à r.l., Mertert (Luxembourg)

Key principles of our sustainable conduct

The key elements and principles of our conduct are:

• Promotion of impact fund projects (so-called ‘Article 9 funds’ under EU Regulation 2019/2088) which make it their mission to pursue sustainability objectives through their activities on at least an equal footing with return objectives.
• Promotion of responsible and sustainable conduct by our real estate management partners by embedding codes of conduct in the business relationship.
• Promotion of investment and property management initiatives for real estate that contribute positively to
  • reducing CO2 emissions and
  • lowering the overall cost burden on tenants through reduced heating and service charges.
• Promotion of the responsible use of resources.
• Promotion of information technology and processes designed to make
  • the consumption of resources by fund properties transparent and
  • sustainable conduct measurable.
• Sanctioning of conduct aimed at violating key sustainability principles.

Codes and memberships

The Institutional Investment Group, together with all its subsidiaries, is a signatory to the United Nations-supported Principles for Responsible Investment (PRI) initiative. This network of international investors is committed to establishing the principles of responsible investment and putting them into practice. The PRI were developed by the investor community and reflect the view that environmental, social and governance (ESG) issues can affect the performance of investment portfolios and must therefore be given appropriate consideration by investors if they wish to fulfil their responsibility to society. By implementing the Principles, signatories contribute to the development of a more sustainable global financial system.

Launched in 2006 by the UNEP Finance Initiative and the UN Global Compact, the PRI provide a voluntary framework through which all investors can incorporate ESG issues into their decision-making and ownership practices and thus better align their objectives with those of society as a whole.

The 6 Principles for Responsible Investment

1. Principle 1:

   We will incorporate ESG issues into investment analysis and decision-making processes.

2. Principle 2:

   We will be active owners and incorporate ESG issues into our ownership policies and practices.

3. Principle 3:

   We will seek appropriate disclosure on ESG issues by the entities in which we invest.

4. Principle 4:

   We will promote acceptance and implementation of the Principles within the investment industry.

5. Principle 5:

   We will work together to enhance our effectiveness in implementing the Principles.

6. Principle 6:

   We will each report on our activities and progress towards implementing the Principles.

UN Global Compact

The UN Global Compact is the world’s largest and most important initiative for responsible corporate governance. It is based on 10 universal principles in the areas of

• human rights,
• labour standards,
• environmental protection and
• anti-corruption

and, through the 17 Sustainable Development Goals (SDGs), also pursues the vision of an inclusive and sustainable global economy for the benefit of all people, communities and markets.

The 17 Sustainable Development Goals are:

1. No poverty
2. Zero hunger
3. Good health and well-being
4. Quality education
5. Gender equality
6. Clean water and sanitation
7. Affordable and clean energy
8. Decent work and economic growth
9. Industry, innovation and infrastructure
10. Reduced inequalities
11. Sustainable cities and communities
12. Responsible consumption and production
13. Climate action
14. Life below water
15. Life on land
16. Peace, justice and strong institutions
17. Partnerships for the goals

Consideration of sustainability risks in investment decisions

Sustainability risks are environmental, social or governance events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of an investment.

As part of our investment decision-making process, sustainability risks are identified and assessed in the course of our Adverse Sustainable Screening. In doing so, we examine an investment against defined ESG criteria for events or conditions that could have a material adverse effect on its value. The results of this screening are taken into account in the final investment decision. If the sustainability risks identified exceed the materiality thresholds we have set, this may lead to the investment being rejected on sustainability grounds.

Systematic consideration of adverse sustainability impacts

As part of our Adverse Sustainable Screening, investment proposals are specifically examined for principal adverse sustainability impacts and sustainability indicators:

• Environment & biodiversity

  Indications of deficiencies in observing environmental standards or in preventing or remedying contamination

• Gases contributing to the greenhouse effect without a phase-out scenario

  Indications of direct support for the production or distribution of ozone-depleting gases without a phase-out scenario

• Controversial weapons / armaments

  Indications of direct support for the production or distribution of controversial weapons (cluster bombs, anti-personnel mines) or relevant system components

• Human & workers’ rights

  Indications of deficiencies in dealing with violations of international human rights conventions or the ILO core labour standards (child labour, forced labour, discrimination, freedom of assembly)

• Prevention of money laundering

  Indications of deficiencies in screening or in dealing with money laundering incidents

• Prevention of corruption

  Indications of deficiencies in screening or in dealing with incidents of corruption and bribery

In this context, in our Principal Adverse Impact Statement we focus on the following three indicators: (i) fossil fuels, (ii) energy efficiency and (iii) energy consumption intensity. Our policies on the identification and prioritisation of these sustainability indicators are described in the statement.

The results of the Adverse Sustainable Screening are taken into account in the final investment decision and, where materiality limits are exceeded, lead to our veto on sustainability grounds.

Stewardship

Driven by the market position we have achieved and the resulting increase in our responsibility to society – but also by general developments in society – it is our principal aim to use our own sphere of influence to make a meaningful corporate contribution to a sustainable environment and society.

This also includes using our own influence (stewardship) on third parties to optimise long-term overall value, including shared economic, social and environmental value on which the returns and interests of investors and beneficiaries depend.

The following guideline describes how we, as the Institutional Investment Group, intend to exercise our influence responsibly in the interests of sustainability:

Stewardship policy.

Sustainability in the remuneration policy

Since the company was founded, our sustainability convictions have been a central element of our remuneration policy. This applies in particular to employees with a variable remuneration component, as compliance with our sustainability convictions becomes part of their annual individual objectives. In the event of sustainability breaches, variable remuneration components are not granted, to the extent permitted under employment law and depending on the significance of the breaches; to that extent, sustainability breaches are sanctioned financially. In addition, individual bonuses are in some cases agreed for achieving positively defined sustainability objectives. In this way, we also wish to recognise meaningful sustainable conduct financially.

Change history

Below we explain substantive changes to the information published on this website pursuant to Art. 3, Art. 5 and Art. 10 of Regulation (EU) 2019/2088. Purely editorial changes with no effect on the content are not listed separately.

14 August 2024 – Consideration of adverse sustainability impacts

Information was added on the sustainability indicators set out in the Principal Adverse Impact Statement and on the policies on their identification and prioritisation.

20 July 2026 – Policies on the integration of sustainability risks

The presentation of the policies on the integration of sustainability risks was changed by setting them out as a separate section, ‘Consideration of sustainability risks in investment decisions’.