Nepc Private Markets Investment Due Diligence Report
Penwood Select Industrial Partners VII
NON-CORE REAL ESTATE
APPENDIX: ESG INTEGRATION EVALUATION
Firm
Fund
Strategy Type
Diverse-Owned Firm
General Fund Information
Penwood Real Estate Investment Management
("Penwood" or the "Firm")
Penwood Select Industrial Partners VII ("Fund
VII" or the "Fund"
INE
PC
Non-Core Real Estate
No
ESG Rating
ESG 3
ESG Ratings are on a scale of 1 through 5, with 1 indicating a best-in-class
approach and 5 indicating no integration.
Analyst Opinion
Penwood has acknowledged the existence of ESG factors within real estate
and the Firm has taken steps to integrate the assessment of these factors
into its investment process. The Firm has had an established ESG policy
and requires ESG analysis in all investment memos. The oversight from
the Sustainability Committee and Risk Committee seem to provide
sufficient oversight of the use of ESG policies and analysis. The Firm
actively sets ESG related goals and achievements as they look to integrate
further.
Firm-Level
Commitment
Resources
Engagement
Policies
Overview
Integration
Process
Resources
Evaluation Criteria and Commentary
Firm-Level
Penwood has an ESG policy that has been in place since 2019
and was recently revised in 2022. The purpose of the policy is to
define the Firm's stance on ESG and provide guidelines to its
employees to integrate ESG into decision making. Penwood
issues an annual Sustainability Report which describes the
Firm's ESG achievements from the prior year. The Firm
currently is not a signatory of any ESG related organizations.
The Firm does not have a dedicated ESG professional but does
have a Sustainability Committee that establishes near- and
long-term ESG initiatives and goals. Penwood has stated that it
will sponsor any employee interesting in obtaining
sustainability-related certifications.
The Firm holds an annual company-wide sustainability policy
review with each employee signing an acknowledgement
statement. Penwood's ESG policy is also a tool to any partner of
Penwood to show how the Firm integrates ESG in its decision-
making process.
Strategy-Level
Penwood has identified that ESG factors have a role in decision
making and can affect returns. The Firm incorporates these
factors into their investment process and is overseen by the
Firm's Risk Committee.
Penwood requires that all investment committee memos
include analysis of ESG factors and mitigation plans. The
markets that Penwood operates in require certain building and
environmental standards that must be adhered to.
Penwood investment professionals have the ability to leverage
the Sustainability Committee and Risk Committee when
assessing ESG factors during investment due diligence. In
addition to municipality environmental standards, Penwood
utilizes the Department of Energy's Energy Asset Scoring
system for all new acquisitions. This scoring system allows the
Firm to track the standard of the building at entry and exit.
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