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Evli Rental Yield Fund

Overview
Responsibility

Sustainability-related disclosures

Financial product’s sustainability information in accordance with EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 (sustainability‐related disclosures in the financial services sector). This is a financial product in accordance with Article 8 of the SFDR.

Product name: Evli Rental Yield Fund (AIF)
Legal Entity Identifier: 2892419-2 (business identity code)
Publication date: December 5, 2022

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental characteristics in accordance with Evli’s Principles for Responsible Investment, Climate Change Principles and climate targets, and requires that target companies follow good governance practices. Environmental characteristics promoted by the fund include improving the energy efficiency of investments, the carbon neutrality of the energy consumed by investments, and the investment’s own renewable energy production.

In the investment process the company is assessed from an ESG perspective as part of the overall investment decision. An outline for a solution is prepared for the risks identified in this process. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. A broad due diligence process carried out before purchasing a property is used to implement the risk assessments related to the environment, covering harmful substances, floods and the risks of soil pollution, for example. In addition, analyses of the environmental certification potential and energy efficiency potential are commissioned. As a part of the investment process, a business plan is created for the company, including a plan for a long-term overhaul and improvements.

During the holding period, the energy, water and waste efficiency of real estate is improved and the carbon dioxide emissions of the held real estate portfolio are reduced, for example by purchasing green electricity and heat, through efficient waste recycling, through systematic optimization of building use and maintenance, and by increasing the amount of fossil-free energy produced on site when profitable. Environmentally friendly material choices and energy- and water-saving alternatives are favored in repair construction. The addition of new environmental certifications in the portfolio is examined during the holding period. The financial product can be used to engage with the target companies as part of the promotion of environmental and social characteristics. Evli’s Principles of Responsible Investment and fund-specific responsibility principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of norms.

Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds. For the properties it owns, the fund is participating in the nationwide Energy Efficiency Agreement, which aims to help Finland achieve the energy efficiency objectives of the EU Energy Performance of Buildings Directive (improving energy efficiency by 7.5 percent by 2025).

As the fund mainly purchases built office real estate, the criteria for promoting an environmental characteristic with respect to trading are related to the risk assessment carried out during the due diligence process not showing any substantial irresolvable problem, and instead an outline for a solution can be prepared for the duration of the holding period. Evli’s real estate funds only deal with trusted partners and tenants. Where applicable, the criteria of Evli’s norm-based screening are applied to tenant selection. The fund management company acts on behalf of or on the account of the fund, principally as the sole shareholder of the invested companies. The property companies owned by the fund are managed in accordance with the principles of good governance and taking stakeholders into account. Partners are expected to exercise good governance, and compliance with the good governance practices is a prerequisite of cooperation.

All active investments of the fund promote environmental and social characteristics. The investments’ energy and water consumption, energy consumption within the scope of own purchasing, and carbon dioxide intensity and waste recycling rate are used as indicators to measure the realization of the environmental characteristics promoted by the fund. In the investment process the portfolio manager assesses the development project from an ESG perspective as part of the overall investment decision. The fund collects data on sustainability indicators that are relevant to the promotion of its environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time. The completeness of the data does not affect compliance with the above principles.

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental characteristics in accordance with Evli’s Principles for Responsible Investment, Climate Change Principles and climate targets, and requires that target companies follow good governance practices. Environmental characteristics promoted by the fund include improving the energy efficiency of investments, the carbon neutrality of the energy consumed by investments, and the investment’s own renewable energy production.

In the investment process the company is assessed from an ESG perspective as part of the overall investment decision. An outline for a solution is prepared for the risks identified in this process. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. A broad due diligence process carried out before purchasing a property is used to implement the risk assessments related to the environment, covering harmful substances, floods and the risks of soil pollution, for example. In addition, analyses of the environmental certification potential and energy efficiency potential are commissioned. As a part of the investment process, a business plan is created for the company, including a plan for a long-term overhaul and improvements.

During the holding period, the energy, water and waste efficiency of real estate is improved and the carbon dioxide emissions of the held real estate portfolio are reduced, for example by purchasing green electricity and heat, through efficient waste recycling, through systematic optimization of building use and maintenance, and by increasing the amount of fossil-free energy produced on site when profitable. Environmentally friendly material choices and energy- and water-saving alternatives are favored in repair construction. The addition of new environmental certifications in the portfolio is examined during the holding period.

The portfolio management team will arrange the administration, development and hiring of property companies and will ensure that the property managers actively manage the target real estate, for example by monitoring their energy and water consumption and reacting to deviations when necessary, and systematically implement maintenance measures to improve energy efficiency. The portfolio management team conducts an annual tenant satisfaction survey and visits the properties regularly. Evli’s real estate funds have several stakeholders. The portfolio management team cooperates with various stakeholders in order to gain an understanding of which ESG matters are important to them and develop the quality of the properties and to support the energy efficiency targets.

Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds. For the properties it owns, the fund is participating in the nationwide Energy Efficiency Agreement, which aims to help Finland achieve the energy efficiency objectives of the EU Energy Performance of Buildings Directive (improving energy efficiency by 7.5 percent by 2025).

As a part of the Evli Fund Management Company, real estate funds have committed to complying with Evli’s Principles for Responsible Investment. In addition to complying with Evli’s Principles for Responsible Investment, the fund complies with the real estate funds’ own responsible investment principles.

As the fund mainly purchases built office real estate, the criteria for promoting an environmental characteristic with respect to trading are related to the risk assessment carried out during the due diligence process not showing any substantial irresolvable problem, and instead an outline for a solution can be prepared for the duration of the holding period. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. Evli’s real estate funds only deal with trusted partners and tenants. Where applicable, the criteria of Evli’s norm-based screening are applied to tenant selection.

The fund management company acts on behalf of or on the account of the fund, principally as the sole shareholder of the invested companies. The property companies owned by the fund are managed in accordance with the principles of good governance and taking stakeholders into account. Partners are expected to exercise good governance, and compliance with the good governance practices is a prerequisite of cooperation.

All active investments of the fund promote environmental and social characteristics.

The investments’ energy and water consumption, energy consumption within the scope of own purchasing, and carbon dioxide intensity and waste recycling rate are used as indicators to measure the realization of the environmental characteristics promoted by the fund.

The environmental and social characteristics promoted by the financial product are monitored and reported using the sustainability indicators mentioned above.

In the investment process the portfolio manager assesses the development project from an ESG perspective as part of the overall investment decision. The fund collects data on sustainability indicators that are relevant to the promotion of its environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time.

The achievement of the promoted environmental and social characteristics is reported annually through the sustainability indicators mentioned above, in conjunction with which the completeness of the data is also reported. All active investments of the fund promote environmental and social characteristics by observing Evli’s Principles for Responsible Investment and fund-specific responsibility principles. The completeness of the data does not affect compliance with the above principles.

In the investment process the company is assessed from an ESG perspective as part of the overall investment decision. If a significant and unresolved ESG issue is revealed in the assessment, there will be no investment. The aim is to improve the environmental characteristics of investments during the holding period. In addition, the portfolio management team conducts an annual tenant satisfaction survey and visits the properties regularly. Evli’s real estate funds have several stakeholders. The portfolio management team cooperates with various stakeholders in order to gain an understanding of which ESG matters are important to them and develop the quality of the properties and to support the energy efficiency targets. The methods are based on data collected from the targets, which is not verified by a third party,

The financial product can be used to engage with the target companies as part of the promotion of environmental and social characteristics. Evli’s Principles of Responsible Investment and fund-specific responsibility principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of norms.

The fund does not have a benchmark index.

Information on environmental and social characteristics of the fund in accordance with article 8 of Sustainable Disclosure Regulation (in force from January 1, 2023)

Principles for responsible investment

Real Estate Funds Principles for Responsible Investment

Sustainability-related disclosures

Sustainability-related disclosures