FENGATE REAL ESTATE ESG REPORT 2022
1816141009060504The Fengate Commitment ESG MessageOverviewtoOur Stakeholders ESG Integration Process LookingGovernanceSocialEnvironmentalAhead Contents
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Fengate is a leading alternative investment manager that invests on behalf of institutional and high net worth investors across infrastructure, private equity, and real estate. We believe that responsible corporate behavior and responsible investment are intrinsic to strong, long-term investor returns and align such principles with the portfolio objectives of each of our business lines.
This ESG report prepared the Fengate Real Estate team intends to set out our responsible investment beliefs, objectives, and approach to integrating ESG assessments throughout the investment processes, to deliver long-term sustainable returns for stakeholders. This policy applies to each of Fengate’s business lines - infrastructure, private equity, and real estate. While each team is responsible for their own investment decisions, assessment of material ESG factors, and incorporation of the assessment into their investment processes, we are all committed to the firm’s overarching goal to deliver long-term sustainable returns for all our stakeholders.
At Fengate Asset Management, our mission statement is: we deliver excellent investment results and fulfill lives through the impact of our work.
Responsible Investment, our practice of incorporating environmental, social, and governance factors into our investment processes, forms the foundation of our mission.
For our firmwide ESG Policy and Case Studies , click on the links or visit the Fengate website
ESG Objectives Fengate’sIntegrated RealEstatePlatform ESG Overview
5FENGATE Real Estate | ESG Report 2022 Environmental Social Gover nance Water and LandSustainableManagementEnergyEmissionsGreenhouseManagementWasteGasUse SecurityData Board Composition and Governance RightsandAccountingBusinessPoliciesRemunerationEthicsIntegrityAuditEquality Critical Incident and Systematic Risk DiversityEmployeeManagementLabourPracticesEngagement,andSocialInclusionEmployeeHealthandSafetyHumanRightsandCommunityRelations Fengate’s Values and Beliefs
To promote responsible investment principles to our employees, partners, service providers and investors. In principle, Fengate will not invest in tobacco, firearms, nuclear power or coal power related opportunities.
To report and be accountable on ESG-related matters to our investors.
possible.Tointegrate and assess ESG factors throughout our investment process including origination, investment due diligence, approval, asset management and disposition. At Fengate, ESG considerations include a variety of factors that align with Fengate’s corporate culture and vision that may have an impact – on its own or in combination – on the risk and return profile of investments and may include:
To quantify the risk and return impact of ESG factors where
The social and environmental challenges that have surfaced across Canada and the world have resulted in organizations, including Fengate, to reflect on the impact our operations have on the future of our planet. On behalf of our investors, Fengate Real Estate operates an integrated investment, development, and asset management platform that affects all stages of the real estate lifecycle. We see this as a tremendous opportunity to make a lasting global impact through the integration of Environmental, Social and Governance (ESG) values to all aspects of our Thisbusiness.reportprovides an overview of some of the areas we have invested in to achieve a more In 1974, Fengate Asset Management was founded as a family-owned real estate company in Hamilton, Ontario. The firm has grown and developed since then, expanding to become a leading alternative investment manager focused on infrastructure and private equity strategies as well as real estate. But, our mission as a company remains the same: to deliver excellent investment results and fulfill lives through the impact of our work. to Stakeholders
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The social and environmental challenges that have surfaced across Canada and the world have resulted in organizations, including Fengate, to reflect on the impact our operations have on the future of our planet.
Jaime McKenna Managing Director and Group Head, Fengate Real responsibilityEstateandcorporate governance will be key in effectively navigating the uncertainties and complexities the future may bring. We remain true to our enduring mission to create value for our stakeholders and leave a legacy of positive change in the communities we work in. We thank you for your continued support and look forward to keeping you updated on the future ESG initiatives of Fengate Real Estate. equitable and sustainable future for our generation and the generations to come. The following pages outline the ESG practices we have integrated into our work, highlighting key steps and initiatives the Fengate Real Estate team has taken thus far. We have completed and continue to implement sustainable business practices that positively influence the value of our projects. This report is one of many tools to help us be accountable to our stakeholders in our journey to better the Whileplanet.weare proud of the milestones we have achieved and the new initiatives we have started, our work continues. As we progress, we are confident that embodying the Fengate values of environmental sustainability, social
The Fengate-managed property at 2265-2275 Upper Middle Road East in Oakville was awarded The Outstanding Building of the Year (TOBY®) Award by BOMA in the Suburban Office Park - Mid Rise category at BOMA Toronto’s Celebration of Excellence Awards Gala in May 2022.
9FENGATE Real Estate | ESG Report 2022 Integration of ESG Assessment into our Real Estate Process Fengate Real Estate integrates ESG considerations into all phases of its investment process across all of its asset classes. Given the group’s long-term approach to investing, ESG factors present inherent risks and opportunities that Fengate must evaluate and manage throughout the real estate lifecycle. Sourcing ■ Initial screening of ESG factors ■ Ensure screened investment opportunities meet mandate commitment to responsible investing ■ Continued monitoring of any material ESG developments in the market Diligence and Approval ■ Detailed internal review of relevant ESG factors ■ Seek appropriate environmental and technical diligence from independent third-party experts ■ Initial ESG Assessment completed in the investment committee memorandum (ICM) Property Management ■ Review and monitor assets for ESG issues through ongoing assessment ■ Identify areas of improvement (i.e., meet or exceed minimum LEED certification, pursue WELL Health-Safety Rating and BOMA BEST certification as required) ■ Annual reporting to UNPRI on ESG activities and process towards implementation of responsible investment principles Planning ■ Engage with stakeholders, including local communities and government ■ Identify opportunities to provide employment in building new housing and communities ■ Alignment of values and objectives with institutional investors and project partners Construction and Project Management ■ Implement a transparent process for procurement ■ Review opportunities to use sustainable and recyclable construction materials ■ Provide a safe and equitable workplace for our project teams ■ Pursue LEED and BOMA BEST certifications, where possibleDevelopmentAssetInvestmentManagement
In partnership with Alvéole, Fengate has installed honeybee hives on all our office towers.
Honeybee Hives Bees and other pollinators are essential to maintaining balance in every aspect of our planet’s ecosystem.
Fengate provides tenants, consultants, and contractors with a guide, which outlines the required types of sustainable products in the planning and construction work within buildings.
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Green Cleaning All chemicals used in cleaning Fengate-managed properties shall bear the UL ECOLOGO certification seal. These chemicals are verified for reduced environmental impact and indicate that a product has undergone rigorous scientific testing and exhaustive auditing to prove its compliance with stringent, third-party environmental standards.
Our property management team offers complimentary e-waste recycling (e.g., computers and related equipment, electronics, toner, batteries) for all the tenants in our office buildings.
In the past year, the Fengate Real Estate team accomplished several environmental milestones across the property-managed assets (highlights listed below) and development projects in our real estate portfolio. While we are proud of these achievements, our work continues. We are committed to reviewing and improving our sustainability initiatives to do our part in protecting the environment.
LED Replacement The use of LED lights can contribute as much as 60-70% of improvement in overall energy efficiency. As such, Fengate no longer purchases non-LED lighting for any of the properties we manage.
Tenant Design Criteria
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BOMA BEST Gold Certification
BOMA BEST® is a national green building certification program launched by BOMA Canada in 2005 to address an industry need for realistic standards for energy and environmental performance of existing buildings based on accurate, independently verified information. In early 2022, six of the buildings in Fengate’s office portfolio were awarded BOMA BEST® Gold Certification. These buildings are 2265 and 2275 Upper Middle Road East and 1315 North Service Road East in Oakville, and 1 and 3 Concorde Gate and 12 Concorde Place in Toronto. Fengate is also actively pursuing on attaining BOMA BEST® certification for the rest of its its office portfolio, located at 1835 Yonge Street in Toronto; 1111 and 1122 International Boulevard in Burlington; and 2010, 2020 and 2060 Winston Park Drive in PicturedOakville.onthe left, from top to bottom: 2265 Upper Middle Road East, Oakville; 2275 Upper Middle Road East, Oakville; 1315 North Service Road East, Oakville; 1 and 3 Concorde Gate, Toronto; and 12 Concorde Place, Toronto
Energy Efficient Systems
In the past year, the Fengate Real Estate team accomplished several environmental milestones across the property-managed assets and development projects (highlights listed below) in our real estate portfolio. While we are proud of these achievements, our work continues. We are committed to reviewing and improving our sustainability initiatives to do our part in protecting the environment.
Construction projects can have a significant impact on the environment and so, where possible, our team seeks to use environmentally-friendly building materials.
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Aligned with our commitment to build clean and healthy communities, Fengate employs experts to assess environmental risks and carry out the remediation of historically contaminated properties. Green Building Materials
EV and Bicycle Parking
To encourage the use of sustainable modes of transportation, Fengate provides for electric vehicle and bicycle parking spots within our multifamily developments.
Our team explores opportunities to install smart building systems, to develop energy efficient buildings with lower emissions due to their reduced reliance on fossil fuels.
Peak Power’s Building Insight Platform tracks consumption and uses predictive analytics to generate performance optimization recommendations. Energy Profiles
Smart Water Management
13FENGATE Real Estate | ESG Report 2022 Ongoing and
Energy Star certified buildings save energy, save money, and help protect the environment by generating fewer greenhouse gas emissions than typical buildings.
The Irrigation Management System tracks irrigation water and allow for for remote schedule adjustment, leak detection and water use reporting. Green Teams
Green Teams are groups of employees/ tenants who voluntarily come together to identify specific solutions to operate in environmentally sustainable ways. Energy Star Rating
Energy Profiles combines comprehensive data management and analytics platforms to improve cost efficiency and advance sustainable operations.
Fengate’s dedicated EBID Think Tank, co-chaired by Jaime McKenna, Managing Director and Group Head of Real Estate, drives our ongoing strategy that fosters a diverse, inclusive, and equitable workplace. We are committed to ensuring all backgrounds and perspectives — including race, ethnicity, culture, nationality, faith, spiritual beliefs, sex, gender identity, sexual orientation, age, and abilities — are valued, sought after, and celebrated at our firm.
Fengate’s EBID Think Tank
Social Fengate Real Estate’s work is not just about buildings and land, but about the people we work with and the communities we operate in. Our team is committed to supporting the advancement of equity, belonging, inclusion and diversity, as well as promoting the healthy, safety and well-being of our employees, partners and stakeholders.Fengate’s firmwide commitment to equity, belonging, inclusivity and diversity (EBID) plays a foundational role in our mission to fulfill lives through the impact of our work. It is our core belief that diverse perspectives and experiences enhance the value to our firm, our investors, our stakeholders, and the communities in which we work; therefore, it is our moral imperative to continuously grow and sustain a culture of inclusivity. Our vision is to ensure EBID is enriching our client service, our investments, and our team, and is foundational to every aspect of business and every interaction at our firm.
Black History is Canadian History
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2022 marks the fifteenth consecutive year that Fengate has been named one of Canada’s Best Managed Companies. With this achievement, Fengate requalified its Platinum Club Member status, which recognizes winners that have earned a Best Managed standing for seven consecutive years or more. Best Managed distinguishes excellence in privately-owned Canadian companies that display leadership in strategy, capability, excellent corporate culture, strong financial performance, and commitment to achieve sustainable growth.
Sustainability Series with World Wildlife Fund As the world’s leading conservation organization, the World Wildlife Fund (WWF) collaborates with people around the world to develop and deliver innovative solutions that protect communities, wildlife, and the places in which they live. This year, Fengate partnered with WWF to deliver a fourpart series focused on promoting various sustainability topics. Occupants of the Fengate-managed commercial properties across Southern Ontario are invited to join an hour-long session every quarter to discover how they can start or enhance their sustainability journey.
WELL Health-Safety Rating
Motion in Air (Ma)
In April 2022, Fengate earned the International WELL Building Institute’s (IWBI) WELL Health-Safety Rating for its entire 1.7 million square foot office portfolio. The WELL Health-Safety Rating is an evidence-based, third-party verified rating for all new and existing building and space types. To achieve this Rating, the team reviewed and implemented enhanced building protocols, including management plans to improve air and water quality, control mould and moisture, and inhibit the spread of contaminants on high-touch surfaces.
This year, Fengate was named one of the Best Workplaces™ in Canada, a list compiled by the Great Place to Work® Institute. The Institute also recognized the firm as one of Canada’s 2022 Best Workplaces™ for Women, Best Workplaces™ for Youth, and Best Workplaces™ for Professional Development. These lists offer a rigorous representation of the organization from an employee perspective, and an overall portrait of the workplace culture. To be eligible for these lists, organizations must be Great Place to Work- Certified™ in the past year.
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Motion in Air (Ma), one of Toronto’s most ambitious public art installations, now graces the north façade of Mirabella Condos at 1926 Lake Shore Boulevard West. The monumental artwork by Jennifer Macklem pays homage to the interconnections of local ecology with images of dragonflies, diatoms and botany. This vibrant new landmark will be seen by commuters travelling on the Gardiner Expressway and GO Lake Shore line and will signal their arrival in Toronto. Fengate partnered with Diamante to develop Mirabella Condos in Toronto’s west end.
Fengate professionals across the organization work together to integrate the principles throughout the full investment life cycle.
Fengate is committed to applying the six principles of the UNPRI:
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■ We will be active owners and incorporate ESG factors into our ownership policies and practices.
■ We will seek appropriate disclosure on ESG factors by the entities in which we invest.
■ We will report on our activities and progress towards implementing the Principles.
As a signatory of the UNPRI, Fengate has committed to upholding UNPRI’s principles in our firm’s activities.
■ We will work together to enhance our effectiveness in implementing the Principles.
At Fengate, corporate governance is the foundation upon which our firm operates. Our team is guided by and adheres to a system of rules, policies and practices in conducting our work, allowing us to drive our business forward responsibly. We are committed to evaluating our governance policies to effectively assess and manage risks and ensure compliance, in order to continue delivering exceptional results and making a positive impact for our stakeholders and the communities we work in.
■ We will promote acceptance and implementation of the Principles within the investment industry.
Fengate is a proud signatory of the Institutional Limited Partners Association (ILPA) Diversity in Action initiative. The ILPA Diversity in Action initiative brings together limited partners (LPs) and general partners (GPs) who share a commitment to advancing diversity, equity and inclusion in the private equity industry. The goal of the initiative is to motivate market participants to engage in the journey towards becoming more diverse and inclusive and to build momentum around the adoption of specific actions that advance diversity, equity and inclusion over time. GPs and LPs who join the Diversity in Action initiative commit to specific actions that advance diversity and inclusion, both within their organization and the industry more broadly. To join the Initiative as a signatory, Fengate provided a summary of concrete actions, sourced from the Initiative Framework, that we are taking within our organization and in the wider industry. At Fengate, these critical efforts are led by our Executive team and Equity, Belonging, Inclusion and Diversity (EBID) Think Tank and are driven by all of us together. As an ILPA Diversity in Action signatory, we participate in regular roundtable discussions, working groups and surveys to provide the industry with greater transparency on the state of EBID today and on EBID best practices that will move private markets forward.
■ We will incorporate ESG factors into investment analysis and decision-making processes.
Evaluate investment risks and implement risk mitigation strategies Deploy capital return reflecting investment risk Determine the most optimal team of consultants for entitlement process Engage general contractors to submit bids for construction and begin tendering process Actively manage investments Hold investments for duration or realize value through exitApprovalandDiligenceSourcingAssetManagementDevelopment
Investment Committee Meeting
Investment Committee approval required to proceed with detailed due diligence Investment Committee Memorandum
Leverage relationships to identify investment
Annual review meeting to assess historic performance of all assets Investment Screening Memorandum
Investment Screening Meeting
Investment committee approval required to proceed with rezoning submissions
Investment Committee approval required prior to commitment on investment Investment Working Memorandum
Investment committee approval required to proceed with vertical development Fund and Portfolio Review Investment, Development and Asset Management teams provide quarterly reports on project status and fund performance
on our planet. Investmentscreeningprocess engagementStakeholder involvementCommunity Consumptiontracking conservationandEnergywater managementWaste Utilization andsustainableofrecycledmaterials certificationsandIndustrybuilding Environmentalawarenesscampaigns
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The Real Estate team’s shared commitment to sustainability, social responsibility and corporate governance is an integral part of driving business forward and safeguarding it from the shifts in the and global landscape. continue to review, manage and find new opportunities to ESG business practices into work, across all stages of the real estate lifecycle. team has identified key areas to focus on in the coming years, and look forward to expanding this list as carry on with mission to create a positive impact
20 FENGATE Real Estate | ESG Report 2022 *All values presented in this brochure are in Canadian dollars. “Fengate” refers to the Fengate group of companies which is comprised of Fengate Capital Management Ltd., its affiliated entities and the funds or other investment vehicles that they manage. Fengate has produced this information brochure (the “brochure”) for informational purposes only. The information contained in the brochure (the “Information”) is believed to be accurate at the time of publication of the brochure; however, Fengate does not guarantee or warrant or make any representations concerning the quality, suitability, accuracy completeness or timeliness of the information contained in the brochure. This brochure and the information contained within it does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. In no event will Fengate be liable to any party for any claim or any direct, indirect, exemplary, incidental, punitive, special or other consequential damages arising out of information available in the brochure. Fengate is a trade name of Fengate Corporation. All other trade names, trademarks, service marks or logos found in this brochure are owned by their respective owners. © 2022 Serafini Holdings Corporation. All rights Designedreserved.andproduced by Fengate. 2022.07.19 fengate.com email@example.com Toronto | Houston | Oakville