Environment, Social, Governance & Wellness – with Amy Erixon (Avison Young)
On this episode of REALtalk, Amy Erixon, Principal and President, Global Investment Management at Avison Young, joins REALPAC’s Manager of Research & Sustainability Kris Kolenc, to discuss leadership and trends across environment, social, governance, and wellness.
The episode covers:
- How Avison Young has set up its ESG practice and processes
- Current areas of focus
- Integration of these policy areas into all aspects of the business
- Data collection and mapping
- Climate risks and opportunities across portfolios
- Differences across North America and Europe when it comes to tackling ESG
- WELL and LEED cerficiations
- Net zero commitments
About Amy Erixon:
Amy Erixon founded and heads Avison Young’s Global Investment Management practice which is active across all major and select specialty property types in Canada, the US, Mexico, Germany and UK on behalf of major institutional investors.
Prior to joining Avison, she was CEO of IGRI, a full service development and investment firm that built the first LEED certified projects across Canada in the mid 2000s. With more than 30 years of industry experience she has acquired, developed, and repositioned portfolios valued in excess of $9 billion, and completed large scale rezoning and development projects in numerous North American cities.
Michael Brooks (REALPAC): Hello, everyone, thanks for listening and welcome to REALtalk, the show that brings you unique insights from leaders in Canadian and international commercial real estate. I’m Michael Brooks, CEO of REALPAC.
Kris Kolenc (REALPAC): Hello, my name is Kris Kolenc, I’m REALPAC Manager of Research & Sustainability, and I’ll be hosting today’s podcast. Our guest today is Amy Erixon, Principal and President, Global Investment Management at Avison Young. Amy founded and heads Avison Young’s Global Investment Management Practice, which is active across all major and select specialty property types in North America and Europe on behalf of major institutional investors. Prior to joining, ever since she was CEO of a full service development and investment firm that built the first LEED certified projects across Canada in the mid 2000s. With more than 30 years of industry experience, Amy has acquired, developed and repositioned portfolios valued in excess of nine billion dollars and completed large scale rezoning and development projects in numerous North American cities. Welcome, Amy.
Amy Erixon (Avison Young): Thanks, Kris. Nice to be here.
Kris Kolenc (REALPAC): Today we’re going to talk about environmental, social governance (ESG) and wellness. Clearly, both of these trends are surging right now and will continue to be part of our industry well into the future. So let’s jump right into it. Amy, clearly, you’re one of our industry sustainability pioneers. We’re really lucky to have you and you continue to push the needle when it comes to ESG. Can you describe how Avison Young has set up its own processes and what areas you are currently focusing on regarding ESG?
Amy Erixon (Avison Young): Yes, certainly our investment management team have been reporting and grasp since 2015 and we’re currently at top quartile reporter there at the corporate level. We last year adopted the UN Sustainable Development Goals as a framework through which our strategy is being executed. That led to improvement in a number of our internal policies, particularly around ESG and Diversity & Inclusion. And we have now developed key metrics that we’re tracking so that we can report out on our progress against that framework. And we adopted that framework because it is universally accepted as one of the key policy frameworks around which people are understanding how we’re all collectively working in the same direction. In our investment management group last year to continue moving that needle, we launched our inaugural TCFD Report. TCFD is the Task Force on Climate Related Financial Disclosures, and it’s the Financial Stability Board’s way of incorporating climate risks and opportunities into financial reporting. And we also became a PRI – that’s the UN Principles of Responsible Investing Signatory. Now each of those frameworks is considered a best in class position and that’s the reason why we pursued them. We wanted to not just do all the work, but report out on these internationally recognized frameworks and and get the scores to demonstrate how well we’re leading from an industry perspective across these issues.
Kris Kolenc (REALPAC): Perfect. That’s great. I mean, clearly, yourself, and Avison Young has had great leadership. I mean, we have some of our REALPAC members reporting to TCFD and PRI, but it’s not a huge cohort quite yet. So it’s great to see Avison Young leadership there. So that’s great to see the progress you’re making. Of course, it’s a very busy field ESG, as you know, and there’s lots of challenges as well. So for you, Amy, with Avison Young you can speak to the industry in general, what are some of the main challenges you see when companies like yours are supporting ESG? Do you have any other thoughts on how we can overcome those challenges?
Amy Erixon (Avison Young): Well, I think that, you know, I’ve talked about this a couple of times this year, that the silver lining of Covid has really shine the light on a number of these issues and how urgently we need to address them. So from the standpoint of the naysayer resistance, I think that that has substantially fallen away in the last year. And so it’s not so much about demonstrating the urgency of addressing these issues, but it’s the integration of these policy frameworks into how we deliver our services, how we think about our products, and making sure that we are walking the talk both in terms of our own operations, but also assisting our clients through our service delivery model to achieve their specific goals.
Kris Kolenc (REALPAC): And our feed data is a big piece. We love data. We need you to support everything. How can you talk a bit about what you’ve seen? Avison Young’s data management, not just on the quantitative side, but also soft data and qualitative. How are you tackling that?
Amy Erixon (Avison Young): Yeah, sure. We have a data warehouse and we are collecting all of the normal real estate data on a real time basis. But we have also picked up a number of adjacent data fields. When you’re starting to think about climate risks and opportunities in your portfolio, obviously the flood maps are pretty wrong. I mean, we have an asset, a large asset in Nashville, Tennessee, who have had two 1 in 1000storms in the last 11 years, so that’s sort of indicative of you need to actually start tracking insurance premiums, you need to start looking at where adjacent data that is going to help you get closer to understanding the trends that have the potential to physically impact your portfolio holdings from a transition perspective, which is another angle that TCFD approaches that’s really keeping track of the regulatory changes and the rate of change. And that’s a lot more difficult to forecast. So if you’re planning if you have a long term perspective on your portfolio and our clients do, then it’s not so important to have the precision of exactly when will these impacts hit as understanding and using screens in order to screen out assets where we feel those kinds of risks are unacceptable and or phasing out assets that have exposure to risks that we are worried may not be insurable in the future.
Kris Kolenc (REALPAC): That’s great. And on the flood mapping side, we’ve done some work on that. It’s nice to see the federal government and their Budget 2021. They’re doing a national infrastructure assessment, the first of its kind. Hopefully we got some flood mapping as part of that because that’s just one piece where we need some better data. And maybe just before we move on, I think it’s really interesting your position since you’re global, especially in North America and Europe, when it comes to tackling ESG. Do you see differences in those two jurisdictions or just globally? Do you see some areas where challenges are more prominent than in others?
Amy Erixon (Avison Young): Oh, for sure. It’s a spectrum. I mean, the Europeans have been embracing these initiatives and policy changes for longer than North America has in North America, and particularly the US and Canada are major oil producers. And just in general, that the weight of that segment of the economy weighs heavily on the policy makers and I think has caused us to lag in terms of development of national standards and the Balkanization of provincial controls versus federal controls or state controls versus federal is also an issue in North America. Whereas in Europe, most countries operate their own grid and so they’re able to integrate renewables and it’s one system. So those are two sort of factors, I think, that Canada has been at, particularly in our industry, a real leader in terms of getting in front of climate risks and GHG reduction and the efficiency of our buildings. And our grid is already 80% renewable. So we’re well ahead