An open-ended real estate fund managed by AEW is to become one of the first to adopt the new ‘sustainability impact’ label under the UK’s new sustainability disclosure regime.
The AEW UK Impact Fund (UKIF) will adopt the label on 31 July, the earliest possible date, under the Financial Conduct Authority’s (FCA) incoming Sustainability Disclosure Requirements (SDR).
The sustainable impact label is one of four new labels – alongside ‘sustainable focus’, ‘sustainable improvers’ and ‘sustainable impact’ – to be introduced under SDR, and which was expected to be applicable to real estate funds looking to make positive social impact.
AEW launched UKIF in September last year, seeded with a £100m (€118m) portfolio of impact properties from the Real Return Fund, its UK-secured income fund. The open-ended fund’s assets include 38 UK real estate assets comprising specialist supported living, key worker accommodation and care homes, together with community and residential-led town centre regeneration projects.
AEW said its UKIF has cleared the FCA fund authorisation process for the adoption of new disclosures and will adopt the sustainability impact label on the first day that it is available.
Under the sustainability impact label requirements, AEW’s UKIF is “committed to achieving sustainability and impact objectives”, the manager said.
AEW added that UKIF has adopted a bespoke impact management and measurement system, created in conjunction with The Good Economy, which is designed to align with the best principles of impact investing, requirements of the Global Impact Investing Network and the UN Sustainable Development Goals.
KPIs that measure the progress of the impact objectives will be reported to investors in a bespoke independent annual impact report, AEW said.
Edward Long, portfolio manager at AEW, said: “Our UK Impact Fund is committed to creating a positive impact for people, place and planet, while helping clients achieve their return objectives.
“With the support of the fund’s investors, we have worked closely over the past two years with The Good Economy, Eversheds Sutherland and the FCA to align the Fund with the SDR regime, ensuring that the place-based impact investing strategy we have adopted meets the new stringent criteria.
“Our thanks to all our partners for their commitment to this project which allowed AEW to be among the first to adopt the new ‘Sustainability Impact’ label.”
The SDR regime is the UK’s equivalent of the EU’s existing Sustainable Finance Disclosure Regulation (SFDR) but it is implementing labels that differ to SFDR’s categories.
The real estate industry has previously urged EU regulators to adopt similar categories, and last month European Supervisory Authorities published an opinion with suggestions that included introducing an official product labelling system with a ‘transition’ category.
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