Mitiska Real Estate Investment Management NV (“Mitiska REIM NV”) – AIFM
(LEI no. 549300YHUMUE6PEEZF50)
Date of publication: 20/05/2021
Last updated: 27/01/2025
1. Introduction
At Mitiska REIM, we are committed to integrating environmental, social, and governance (ESG) factors into every aspect of our operations. As an Alternative Investment Fund Manager (AIFM), we believe that incorporating ESG aspects into our business decisions not only enhances the long-term value of our investment portfolio but also strengthens our responsibility to stakeholders and contributes to a more sustainable future.
The Sustainable Finance Disclosure Regulation (SFDR) is a crucial step in increasing transparency for investors regarding sustainability risks and opportunities. By aligning with SFDR, we aim to provide clear and consistent information on how we manage ESG factors in our investment strategy, demonstrating our commitment to responsible investment and the creation of long-term value.
As part of our commitment to transparency and responsible investment, Mitiska REIM complies with the requirements of the Sustainable Finance Disclosure Regulation (SFDR) (EU) 2019/2088. In the following sections, we outline how we integrate sustainability risks into our investment decisions (Article 3), how we consider principal adverse impacts on sustainability factors (Article 4), and how sustainability risks are reflected in our remuneration policies (Article 5). These disclosures ensure that our investors are informed about how we manage both risks and opportunities related to sustainability.
2. Integration of sustainability risk in the investment policies
(Article 3 SFDR)
In accordance with the SFDR, sustainability risk refers to an environmental, social, or governance event or condition that could, if it occurs, cause a material negative impact on the value of the investment. For Mitiska REIM, sustainability risks are risks which, if realized, could materially affect the value of the real estate assets in which its funds have invested.
Mitiska REIM is committed to integrating sustainability risks by incorporating environmental, social, and governance factors into all aspects of its business activities, including its investment decision-making process. The integration of sustainability risk is a key principle within the ESG policy of Mitiska REIM and is considered a risk factor in our risk management charter.
ESG criteria are applied throughout the acquisition and development processes of new real estate assets, ensuring that ESG factors are an integral part of both the investment and development strategy. This approach reduces exposure to risks and aligns with our broader sustainability objectives. Key ESG topics we assess include energy use, emissions, sustainable building certifications, multi-modal transport connectivity, tenant attraction and retention, and overall engagement. For new acquisitions, all potential properties undergo an ESG due diligence process to evaluate risks, opportunities, and challenges, which are factored into the final investment decision and asset business plan. The ESG DD checklist, which can be completed internally or externally depending on the project’s size, covers environmental impact, social factors, and governance practices to ensure a comprehensive assessment of sustainability risks and opportunities. For specific funds like MEREP 3, an article 8 product under SFDR, the due diligence process also includes a climate risk assessment and soil and groundwater analysis as standard components.
In the case of new developments, ESG requirements are integrated throughout the entire development process or value-add program to enhance the performance and sustainability of assets. Wherever feasible, we aim to apply the principles outlined in our Green Building Manual, finalized in 2023. This manual provides practical guidance to incorporate ESG factors—such as building safety, climate resilience, energy and water efficiency, and legislative compliance—throughout the project lifecycle. While we strive to use the manual as much as possible, the extent of its application will vary depending on the nature and scope of each project.
3. Principal Adverse Impact reporting (PAI)
(Article 4 SFDR)
Adverse sustainability impacts refer to the potential negative effects that real estate investments via Mitiska REIM’s funds may have on sustainability factors. While Mitiska REIM does not currently consider the adverse impacts of investment decisions on all sustainability factors, we have a formalized approach to assess certain key impacts using established benchmarks such as GRESB, CRREM, and BREEAM.
Key ESG factors that we consider in our investment activities include the reduction of energy consumption and emissions, renewable energy production, sustainable building certifications, multi-modal transport connectivity, and tenant engagement. These factors are essential in creating long-term value for stakeholders and making our assets ‘future-proof.’
As a real estate-focused Alternative Investment Fund Manager (AIFM), Mitiska REIM and the funds we manage must comply with the regulatory technical standards established in the Commission Delegated Regulation (EU) 2022/1288 (the “RTS”). These standards recognize the specific characteristics of real estate assets, which have led to mandatory principal adverse impact (PAI) indicators for our sector. These include:
- ‘Exposure to fossil fuels through real estate assets’
- ‘Exposure to energy-inefficient real estate assets’
However, Mitiska REIM does not currently assess the mandatory PAI indicators defined under the SFDR, particularly due to the international nature of our portfolio and the lack of harmonization in certain key areas, such as the standardization of EPC (Energy Performance Certificates). Given that EPC regulations vary significantly between jurisdictions and that our portfolio spans multiple countries, the task of analyzing and reconciling these disparate standards would not only be disproportionate in terms of effort but also practically unfeasible at this time. As such, we have adopted an “explain” approach in line with Article 4 of the SFDR regarding these mandatory indicators.
We will continue to monitor legislative developments, especially concerning the standardization of EPCs and other real estate-specific requirements. Once harmonized regulations are established at the European level and a concrete framework is provided for the ‘exposure to fossil fuel’ indicator, Mitiska REIM will reconsider its use of the “explain” approach and adjust its reporting method accordingly.
4. Integration of sustainability risk in the remuneration policy
(Article 5 SFDR)
The remuneration policy in place at Mitiska REIM is consistent with and promotes sound and effective risk management and is aimed at aligning remuneration with prudent risk-taking. The remuneration policy applies to all relevant staff members of Mitiska REIM, including the staff responsible for investments and portfolio management (i.e. the investment professionals).
Mitiska REIM pays its staff a combination of fixed remuneration and variable remuneration. Variable remuneration for relevant staff takes into account compliance with all policies and procedures, including those relating to the impact of sustainability risks on the investment decision making process and discourages excessive risk-taking, including in relation to sustainability risks.
Summary of Key Changes to Entity Disclosures
(art. 12 SFDR)
1. Introduction:
- SFDR explanation added: Included a brief explanation of SFDR’s purpose in promoting transparency regarding sustainability risks and opportunities.
- Commitment to ESG: Expanded focus on Mitiska REIM’s commitment to integrating ESG factors in all operations, emphasizing long-term value creation and responsibility towards stakeholders.
2. Integration of Sustainability Risk (Article 3 SFDR):
- ESG in acquisitions and developments: Enhanced explanation of how ESG criteria are integrated throughout the acquisition and development processes to reduce risks and align with sustainability goals. Clarified that the ESG DD checklist is a key tool used in these processes to evaluate sustainability factors.
- MEREP 3 specifics: Added details on the Article 8 fund MEREP 3, including climate risk assessment and soil/groundwater analysis as part of the due diligence process.
- Green Building Manual: Introduced the Green Building Manual as a guideline for incorporating ESG factors like energy efficiency and climate resilience in new developments.
3. Principal Adverse Impacts (Article 4 SFDR):
- Explanation of mandatory PAIs: Detailed the mandatory PAIs for the real estate sector (e.g., fossil fuel exposure, energy inefficiency) and clarified that Mitiska REIM currently does not assess these due to international portfolio challenges and the lack of EPC standardization, while still assessing certain key impacts through benchmarks like GRESB, CRREM, and BREEAM. Added the condition that if harmonized European regulations and standards emerge, Mitiska REIM will review and adjust its “explain” approach.
4. Other Updates:
- Dates added: Introduced “Date” fields to keep the disclosure timely and transparent.
- Summary of key changes (Article 12 SFDR): Added a new section titled “Summary of Key Changes to Entity Disclosures (Article 12 SFDR)” to list specific updates to the disclosure for easier investor reference.