Climate roadmaps and sustain­ability strategy for Hanse­Merkur Grund­ver­mögen

In 2022, Hanse­Merkur Grund­ver­mögen (HMG), one of Germany’s leading investment and asset managers, commis­sioned consulting firm Wüest Partner to carry out a compre­hensive sustain­ability assessment for 84 existing properties. This was followed in 2023 by a commission to strate­gi­cally develop the entire property portfolio.

Sustain­ability strategy goals

This strategy project had three objec­tives:

1. The main objective was to draw up specific climate roadmaps for decar­bonizing the property portfolio.
2. To identify further fields of action in the ESG area, based on the previ­ously deter­mined ECORE rating.
3. To develop strategies for classi­fying selected funds as “Article 8 funds” under the EU Disclosure Regulation SFDR.

“It is important to always consider a property’s long-term economic viability, especially when designing short- to medium-term decar­bonization strategies. This is because they can be influ­enced by a near-term stranding date or dynam­i­cally increasing CO₂ cost burden. Thanks to our inter­dis­ci­plinary expertise, we could bundle HMG’s opera­tional and regulatory sustain­ability require­ments into a compre­hensive consul­tancy service.”

Stefan Stute, Managing Partner, Wüest Partner

Require­ments for insti­tu­tional investors

• Consid­ering ESG aspects as an integral part of insti­tu­tional end investors’ investment and acqui­sition strategies. 
• Tackling the biggest challenge in the direct and indirect portfolio: Antic­i­pating and reducing transitory risks, partic­u­larly those arising from excessive CO₂ emissions, and from energy and resource consumption.
• Overcoming the additional challenges of data collection and aggre­gation as part of the increasing ESG reporting oblig­a­tions, which the EU is further tight­ening through the new Corporate Social Respon­si­bility Directive (CSRD).

Founda­tions of the strategy concept

Trans­parency and imple­men­tation measures thanks to the sustain­ability strategy

The expected price per tonne of emitted CO₂ is a decisive factor for the imple­men­tation date of energy efficiency measures and designing a renewable energy supply. Until 2026, statutory fixed prices cap this cost in the German building sector. From 2027, however, the National emissions trading (BEH) instrument will be replaced by European emissions trading (ETS2) and the Carbon Dioxide Cost Sharing Act (CO2KostAufG), bringing signif­icant changes.

To ensure that HMG has the necessary quanti­tative data to develop sustainable business plans and can thus trans­par­ently assess its own portfolio quality, we took into account the CO₂-induced risks and defined corre­sponding CapEx budgets.

In addition, we analyzed selected funds in the portfolio for their potential to be classified as sustainable financial products (“Article 8 funds”). Finally, we developed fund-specific SFDR (Sustainable Finance Disclosure Regulation) strategy approaches based on ESG roadmaps and provided concrete imple­men­tation measures.

“This compre­hensive sustain­ability strategy ensures that Hanse­Merkur Grund­ver­mögen not only fulfills the current regulatory require­ments but also assumes a leading role in sustainable property management in the long term.”

Lutz Kandzia, ESG Department, Hanse­Merkur Grund­ver­mögen

Derivation from the UN SDGs:

• Mapping of corporate goals with the UN Sustain­ability Devel­opment Goals relevant to property: Health and well-being (3), Affordable and clean energy (7), Sustainable cities and commu­nities (11), Respon­sible consumption and production (12), Climate action (13).
• Analyzing the current fund strategy and deriving an individual ESG strategy based on the selected UN SDGs.