How S-Reits are performing in ESG

Maybank said sustained efforts must be continued to improve ESG scores.

Singapore REITs are creating a framework to achieve environment, social, and governance (ESG) goals but they need to sustain these visible efforts to enhance their scores, a Maybank report showed.

Maybank mentioned that Singapore REITs are creating incremental ESG steps, with Manulife US REIT being the outperformer amongst REITs.

“Manulife US REIT leads the score with robust ESG reporting metrics, a well-established framework and measurable targets,” said Maybank.

Maybank uses its available pool of funds to invest in US commercial real estate, carry out asset enhancements and redevelop properties to optimise value for its unitholders.

“It is susceptible to sustainability-focused investors with strong preference for investing in companies that meet specific ESG criteria, given its incessant need for additional capital,” said Maybank.

It retained a 5-star rating in the Global Real Estate Benchmark and posted a 93 score to outperform its peers across three aspects of ESG. It ranked fifth out of 13 listed US office REITs.

It is also 80% in cutting carbon footprint by 2050, Maybank said.

Early stages

Other REITs have only begun their ESG roadmap but they have already created concrete steps.

For instance, Maybank said Prime US REIT started portfolio-wide Energy Star/LEED recertification and benchmarking. 

About one in four buildings in Aims APAC REIT’s portfolio sealed green certification. AAREIT’s manager has identified reduction in Scope 1 and 2 carbon emissions as a focus area. 

“That said, we recognize sustained efforts have to be made to improve the ESG scores,” Maybank said.