Q&A with BGO’s Global Head of Sustainable Investing, Ailey Roberts

Ailey Roberts leads BGO ’s Sustainable Investing Team and is responsible for developing and integrating sustainability practices throughout the investment life cycle for both equity and debt investments.

Q: Sustainable Investing continues to evolve as companies, investors and regulators increasingly recognize the importance of sustainable and responsible business practices. What have been BGO’s key areas of focus?

A: BGO remains focused on strategic initiatives that are most important to our clients and the regions where we invest and operate. One of our top priorities was evolving the next phase of our net zero strategy by conducting asset-level transition plans on select assets to understand the pathway and associated CapEx to decarbonize. Another significant area of focus was developing a robust ESG data approach to support the growing need for more granular, high-quality data across our global platform. This included expanding access to tenant utility data to gain insight into whole-building performance, a critical component of the real estate industry’s ability to decarbonize. Improving our disclosures to third-party benchmarks, such as PRI (Principles for Responsible Investing) and GRESB (the global real estate ESG benchmark) remained a top priority as well, evolving our approach to align with shifting market best practices and maintain our position as leaders. Building on our work in 2022 with the EU’s Sustainable Finance Disclosure Regulation (SFDR), we sought to upgrade the classification of additional strategies to access European capital and align with investor needs.

Given the importance of serving the ESG needs of our increasingly diverse and growing real estate investment platform, we have pursued an approach that favors tailormade strategies that are designed to excel across the risk spectrum.

We’ve developed a Global Sustainable Investing Framework (the “Framework”) with the intention to guide our strategies in addressing the many existing and emerging market demands for performance in sustainability that are aligned to a set of consistent principles, while allowing for flexibility to adhere to the risk and return profile of the portfolios we manage for our investors.

Q: What are the key drivers for increased focus on sustainable investing?

A: From BGO’s perspective, the principles of sound investing and fiduciary responsibility create the inherent necessity for a sustainability mindset in the management of our real estate strategies. Attracting top-tier tenants, generating strong and reliable income, and encouraging asset appreciation are pursuits that all have direct ties to environmental and social performance. We are seeing this result in increasing investor preference for high-quality assets and demand for demonstrable progress from managers and their portfolios. At the firm and at the strategy level, we remain focused on strengthening our long-standing leadership in social areas such as equity, diversity and inclusion, tenant engagement and responsible procurement. And we continue to raise the bar on reducing GHG emissions in pursuit of our net zero mission, in partnership with our clients and helping them meet their decarbonization goals, while positioning our assets with resilience strategies to address climate-related physical and transition risk.

Q: How is BGO responding to these demands?

A: To address these needs, we developed a Global Sustainable Investing Framework. The goal of this work is to bring greater consistency and accountability to how we’re integrating ESG throughout the investment life cycle and aligning with market expectations across our global portfolio. We are using the Framework to begin developing fund-level ESG strategies for select strategies, aligned with its level of ambition and investment strategy, and reflective of regional considerations. This approach ensures that our investments are universally aligned with our firm-wide ESG focus areas and the expectations of our investors globally. We’re also building a longer-term strategic roadmap for future improvements and enhancing our tools to support stronger integration.

Q: What is the growing role of data in addressing topics like climate risk and net zero?

A: We recognize the critical role that robust data will play in our climate risk and net zero strategies, and BGO continues to bolster its investments in internal data infrastructure. Over the course of 2023, we analyzed our data capabilities and built out a strategy to improve data coverage (particularly in accessing whole-building utility consumption data). We’re also strengthening our tools for managing that data. Having more and better-quality data directly supports our ability to conduct decarbonization studies of entire buildings, which we started doing this past year on select assets. Data is also required to support reporting, disclosure and regulatory requirements. Tenants are also asking for this data to support their own sustainability objectives and respond to regulatory requirements.

Q: What does having a sustainability mindset mean to BGO and how is this achieved?

A: Like anything that matters, progress on sustainability requires full buy-in and this is really where the collective mindset at BGO stands out.

BGO’s leadership sets the tone for how we will lead the way, and from there, each of us at BGO has a role – direct or indirect – to help us achieve our mission.

We set bold targets for ourselves and embed them into our investment management and operations practices. Another aspect of our mindset at BGO is how much we embrace innovation and technology across our business to help us reimagine the problems we are trying to solve with novel approaches that move us forward. And then it all comes together with the culture at BGO that values how the work and life experiences of people at our firm determine the outcomes we are striving for. Whether it is our approach to walking the walk on equity, diversity and inclusion, or our commitment to working together to win, our firm’s Culture Code is an empowering influence on our sustainability goals and a true differentiator for us in the market.