Energy efficiency Investment voluntary initiatives - The role of investors in scaling up EE investment Tatiana Bosteel Director for Responsibility Hermes Real Estate

Energy efficiency As first fuel

Impact to investment performance MSCI green rated office performance – EE in buildings MSCI findings 2015 Responsible Property Investment 2017

Global Real Estate Sustainability Benchmark Growing voluntary disclosure

EEFIG Recommendations 2015 Institutional Investors Priorities Responsible Property Investment 2017

De-risking open source database to disclose real performance data of real investments projects An EEFIG underwriting toolkit for investments in energy efficiency Energy efficiency financing, a win/win situation also for financiers and investors: More reliable cash flows Increased asset value Risk reduction increased business opportunities Refinancing opportunities

DEEP database Risk & Valuation GUIDANCE DEEP: De-risking Energy Efficiency Platform & EEFIG UNDERWRITING GUIDANCE DEEP database Risk & Valuation GUIDANCE Financial institutions and energy efficiency Financing Energy Efficiency The Project Life Cycle Value and Risk Appraisal Resources Helps bridge the gap between the technical world and the financial world Helps build capacity in financial institutions Provides case studies of financial institutions deploying capital into energy efficiency.

Mapping Tools: “Energy Efficient World” for the G20… Core Integrated USD trillions USD 221bn ESCOs (USD 24 bn); “Self-financed” Energy subsidies; Inefficient markets; Supply-led planning. Energy Transition; National Renovation Strategies; Vehicle Fleet Standards; Transparent Energy Planning. “EE First”; Mandatory targets/ standards; NZEBs; EE Obligation schemes; National EE Action Plans. Mainstreaming Enabling Finance undertaken without explicit consideration of energy “externalities” or cost effective energy improvements. Green tagging; Green buildings lending; green lending; climate lending; Equator principles. EE mortgages; Building renovation loan; EE credits/loans; EE tagging. Green tagging and company disclosure; Collaborative shareholder activism; Green funds; Sustainable real estate funds. EE funds; Energy Productivity Indexes; Own real estate EE renovation; EE tagging. Product and services without explicit consideration of energy “externalities”. Green buildings insurance; Climate mitigation insurance and investments; Addon coverage; Technical assistance, advisory services. Energy saving insurance; energy performance guarantee; EE advisory services. Resource Efficiency; Safeguards; ESG & Climate Commitments; Direct EE Lending; EE Policy lending; EE targets; Technical assistance. $33 bn $7 bn

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Hermes Investment Management We are an asset manager with a difference. We believe that, while our primary purpose is to help savers and beneficiaries by providing world class active investment management and stewardship services, our role goes further. We believe we have a duty to deliver holistic returns - outcomes for our clients that go far beyond the financial - and consider the impact our decisions have on society, the environment and the wider world. Our goal is to help people invest better, retire better and create a better society for all. Our investment solutions include: Private markets Infrastructure, Private Debt, Private Equity, Commercial and residential real estate High active share equities Asia, global emerging markets, Europe, US, global, and small and mid-cap Credit Absolute return, global high yield, multi strategy, global investment grade, real estate debt and direct lending Multi asset Multi asset inflation Stewardship Active engagement, advocacy, intelligent voting and sustainable development Offices London | New York | Singapore Contact information United Kingdom +44 (0)20 7680 2121 Africa +44 (0)20 7680 2205 Asia Pacific +65 6850 0670 Australia Canada Europe Middle East United States Enquiries marketing@hermes-investment.com

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