D. Investment strategy
What investment strategy does this financial product follow and how is the strategy implemented in the investment process on a continuous basis?
The General Partner incorporates the Environmental Characteristics through its sourcing and investment approach by, among other things, identifying real estate assets to acquire where there is opportunity to mitigate negative environmental impacts by integrating LED lighting and solar power generation capacity into such assets.
The Prologis development pipeline allows opportunities for the Fund to invest in assets that are designed to sustainable building certification standards.
All assets developed by Prologis and which are acquired by the Fund are designed to sustainable building certification standards (such as LEED).
When the Fund acquires newly built assets from other third parties, the General Partner will review the buildings’ performance and impact in an effort to select buildings that already meet sustainable building certification standards.
The Fund also acquires assets that are not newly built. For all acquisitions, the Fund assesses energy use and environmental impacts, and assesses opportunities to incorporate Environmental Characteristics into the investment.
The General Partner will also update and retrofit some of the existing assets owned by the Fund to reduce environmental impacts. The Fund’s investment strategy considers opportunities to improve the environmental performance potential of its existing assets, such as by installing LED lighting and increasing solar power generation capacity.
What are the binding elements of the investment strategy used to select the investments to attain each of the environmental or social characteristics promoted by this financial product?
The binding element of the investment strategy is the mitigation of negative environmental impacts of the Fund’s real estate assets by installing LED lighting and increasing solar power generation capacity.
What is the policy to assess good governance practices of the investee companies?
As the Fund invests in real estate assets, the assessment of good governance practices in relation to investee companies is not directly applicable.
Nonetheless, Prologis and the General Partner ensure that good governance practices are followed by setting clear expectations with respect to transparency and accountability around sustainability aspects of the Fund’s portfolio towards the Fund’s investors. Prologis and the General Partner promote high standards of ethics and governance as key elements of success. All Prologis personnel are subject to the Prologis Code of Ethics and Business conduct, published on the Prologis website. Furthermore, all of the Fund’s suppliers are subject to the Prologis Supplier Code of Conduct. Each year, Prologis employees and board members are required to complete ethics training. Prologis also provides training on its Code of Ethics and Business Conduct, Foreign Corrupt Practices Act, harassment, and insider trading.
Does this financial product consider principal adverse impacts on sustainability factors?
Due to the geographical focus of the Fund and the unavailability of data needed to consider and monitor the applicable principal adverse impacts (PAI) for the Fund’s sector, the General Partner is currently not in a position to consider PAI. The General Partner will monitor and re-assess this should there be any positive developments in this regard that could change this position.