Icade, the first real estate company to apply “Say on climate”

This is a first in the construction industry. Last Friday, promoter Icade adopted a radical environmental strategy, the “Say on climate and biodiversity”. It is currently the only company in its sector to move in this direction, but the least we can say is that this year’s general meetings of the major publicly traded groups will be marked by a growing concern for the climate, which is affecting the relations between managers and shareholders. of large groups a little more difficult.

The ‘Say on climate’ consists of letting shareholders vote on a company’s commitment to the climate plan. Last year, however, only three companies, TotalEnergies, Vinci and Atos, put climate resolutions to vote for shareholders. While there are seven of them this year to put this question on the agenda: Amundi, EDF, Engie, Getlink, Icade, Mercialys and TotalEnergies. This “Say on climate” is certainly advisory. But it is also becoming a virtual obligation as it increasingly shapes the attitudes of large investors and especially management companies, making ESG issues a key focus of their governance.

Investor pressure

For example, the Forum for Responsible Investment (FIR) has just published a forum in favor of the institutionalization of this “Say on climate”, with a minimal basis of information and “quantified targets for the reduction of CO emissions”2“. And what is interesting is that this forum is signed by some thirty management companies (Candriam, La Banque Postale AM, Oddo BHM AM, Ostrum, Sycomore, etc.) and major institutional investors (Erafp, Ircantec, Maif, Préfon, etc. .) At BNP Paribas Asset Management, for example, Michael Herskovich confirms that he has “reinforced these considerations in voting policy,” with an active policy of upstream dialogue with management.

Some companies continue to argue that climate policy is a prerogative of the board and not of shareholders. But that doesn’t go with history. Leaders who are reluctant to take an interest in this are increasingly frowned upon by the authorities. The AMF, the stock market police officer, therefore warned that if they were too slow on their part, “clarification of the rule of law, if necessary by legislative means, could bring additional legal certainty to the issue. The position of issuers and shareholders on these topics to to bring forward”.

TotalEnergies forced to align

But shareholders haven’t waited for a law to become increasingly active in protecting the planet (and their interests). For example, last week, one month before the general meeting (May 25), a group of TotalEnergies investors (including Edmond de Rothschild AM and Financière de l’Echiquier), representing 0.8% of the capital, submitted a resolution to require the French oil group’s emissions targets to comply with the Paris climate agreement. They have since removed it, but after the tanker made a commitment to the subject.

Icade’s adoption of a resolution on the “Say on climate and biodiversity” shows the differences in the management of large groups about the effects of global warming. It should be remembered that the different IPCC scenarios predict temperature rise trajectories of the order of +1.5 to more than 4.5 degrees by the end of the century, with significant impacts on ecosystems (biodiversity loss, forest fires, threatened by rising sea levels, etc.). The signatory countries of the Paris Agreement have committed to limiting global warming to below 2 degrees, preferably to 1.5°C.

For the promoter, this represents a commitment to reduce its carbon emissions in its three major companies by 2030. Estimated commitments: -60% on its office real estate, -37% on its healthcare real estate and -40% on its real estate development part. “We are going to capitalize on what is already there, by improving thermal insulation, by changing materials, we are going to convert certain buildings like we do at Rungis, we are going to convert offices into homes and we are also going to build our way of building, such as we do for the Olympic village”, explains Frédéric Thomas, chairman of the board of directors of the promoter, a subsidiary of Caisse des Dépôts. At Rungis, for example, the group invested 9 million euros to renovate its warehouses, install a heat pump, insulating the walls and the roof and, among other things, adjusting the lighting.

Working on the Rungis site, where Icade has warehouses, transformed and renovated to significantly reduce its carbon footprint

An investment more than a cost item

The group also commits to ensure that 100% of the surfaces created are accompanied by as many natural spaces as possible (this is the biodiversity component combined with “zero grid artificialization”). “By placing its three companies in a 1.5 degree trajectory and continuing its strategy in favor of biodiversity, we position ourselves as a leader in these areas,” explains Olivier Wigniolle, the CEO. All this comes at a price, of course: the group is investing 150 million euros in this new policy. But, continues Frédéric Thomas, “we see this more as an investment, which will give us a competitive advantage, in a period of rising raw material costs”. Icade hopes these new commitments will help attract tenants and investors “who also have climate concerns and commitments.”

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