Our priorities: To increase risk-adjusted investor returns, build resilience and mitigate harm
Truly sustainable investing can only be achieved if our actions are tested against these principles:
What we expect from ourselves:
1. MAXIMISE PERFORMANCE
Risk adjusted investment returns
Grow AuM & Profitability
2. BUILD RESILIENCE
3. MINIMISE HARM
We must be good corporate citizens
We value our Social Licence to Operate
What the market expects us to show:
1. OUR INTENTION
Demonstrate the will to engage and improve, evidenced by:
2. OUR PUBLIC COMMITMENT
Signatories to the UN PRI, ESG Policy published, evidenced by:
3. OUR ACTIONS
Implementing policies and procedures, evidenced by:
4. MONITORING & REPORTING
Ongoing monitoring of KPIs for Group and funds & investments.
Environmental, Social and Corporate Governance Policy
The LQ Group is committed to incorporating best practice in all areas of its business.
This Environmental, Social and Corporate Governance (“ESG”) Policy reflects our current approach to corporate social responsibility and sustainable investing. This Policy will evolve over time to reflect changes in business practices, technology and the law. Behind this Policy lies a set of detailed procedures.
Our Understanding of ESG…
ESG is a convenient acronym for a set of considerations relating to the measurement of positive and negative impact elements of businesses and investments by focusing on three specific aspects:
Environmental: energy usage. Greenhouse gases, pollution, biodiversity, water and waste management.
Social: employee health and safety, working practices, diversity and inclusion.
Governance: corporate governance, bribery, corruption, compensation.
The UN-supported Principle for Responsible Investment (PRI) are designed to provide the framework within which investment firms can monitor and benchmark their progress.
Our ESG responsibility:
LQ is committed to embedding sustainable investing principles within the Group as a key part of our goals and policies.
All Directors, employees and consultants of the Group are required to conduct their duties in a responsible manner and in accordance with the Group’s wider investment goals and policies.
In this Policy, references to “employees” and “staff” include directors of Group entities and those engaged under a contract for services.
Our ESG Framework:
Our corporate and investment sustainability principles, which are outlined below, are based on three fundamental pillars:
Ensuring our business conduct meets and/or exceeds legislative requirements and other relevant standards.
Proactively identifying, managing, and addressing material ESG risk factors when acquiring, managing, and disposing of assets.
Integrating our sustainable and responsible investing strategies within our existing operational procedures.
Group structure and decision making:
Lodge Quai Group (“LQ” or “the Group”) is a real estate focused investment group wholly owned by Lodge Quai Partners Ltd (“LQP”), a Jersey incorporated holding company.
Lodge Quai Capital Management Limited LLP (“LQCM”) is an investment advisory firm wholly owned by LQP and regulated by the Jersey Financial Services Commission (“JFSC”) as an advisor/manager.
Lodge Quai Advisors LLP (“LQA”) is a UK advisory firm owned by the Group. It is authorised and regulated by the Financial Conduct Authority (“FCA”). The Firm provides advisory services to the General Partners of Lodge Quai Group funds.
The Group’s Investment Stewardship responsibility:
LQ recognises that its regulated subsidiaries have a duty to act in the best interests of their customers and end-investors as well as other stakeholders. Part of this responsibility involves ensuring that they manage the assets under their stewardship in an appropriate way with an aim to create long-term value for clients. The Group is committed to maintaining an investment approach that incorporates ESG considerations, in a constructive manner, to safeguard the interest of its clients.
The Group views responsible investing, or the incorporation of sustainability factors into investment and management decisions as:
an important investment goal;
an indicator of financial performance; and
a method of risk management.
We believe that ESG risks can affect the performance of investment portfolios, to varying degrees depending on the factors such as the asset-type and sector, over time. Investments which meet sustainability standards are in principle less likely to be adversely affected by negative ESG events and are more likely to produce consistent and sustainable returns over time.
In addition to the role of sustainability in investment performance, the Fund’s integration of these factors into our investment decision-making process is designed to ensure that the Fund is managed responsibly and that ESG risk is appropriately considered in the light of our overall investment goals.
The Group’s Investment Stewardship responsibility:
Transparent Transactions: Every transaction is conducted with utmost transparency, providing all stakeholders with pertinent information and avoiding any conflicts of interest.
Regulatory Adherence: We ensure every transaction is compliant with local and international financial, tax, real estate and environmental regulations, staying updated with any regulatory changes.
Ethical Considerations: All our operations, from marketing, property acquisition, lending to leasing agreements, are conducted with integrity, avoiding any form of corruption, bribery, or unethical practices.
United Nations-supported Principles for Responsible Investment
The Group is a signatory to the United Nations-supported Principles for Responsible Investment (“PRI”). The Firm recognises that best practices and governance models relating to sustainable investing may change and develop over time and therefore maintains a dynamic approach.
The PRI is an investor initiative in partnership with UNEP Finance Initiative and UN Global Compact. As part of being a signatory, the Group submits an annual assessment report to the UNPRI in accordance with its guidelines.
See below for the official declaration made by the Group upon becoming a PRI signatory and PRI Reporting topics.
As signatories to the UN PRI our reporting follows the PRI framework.
Indicative Timelines & Key milestones:
28th June LQ signs UN PRI.
18th Aug ESG Working Group initiated
19th Sept ESG Committee inaugural meeting
21st Sept Approval of Intitiating ESG Policy by LQ Group Boards.
4Q23 Setting and testing KPIs (internal and PRI)
Investigation of benchmarks.
Discussions with reporting systems. Selection & implementation.
31st Dec Initiating ESG Report period ends
1st Jan Voluntary 1st year PRI reporting period begins.
ESG policies initiated across group.
Q1/2/3/4 Internal ESG Reports as part of quarterly fund review and ESG Cttee report to Group Boards.
31st Dec End of Year 1 voluntary PRI reporting period.
First full year LQ ESG report period ends.
June-Sept PRI reporting window open
1st Jan First compulsory PRI report period begins.
Statement by the LQ Group as PRI signatory:
As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).
We also recognise that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
The PRI were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices. The process was convened by the United Nations Secretary-General.
In signing the Principles, we, as investors, publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the Principles over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society.
We encourage other investors to adopt the Principles.
Chief Operating Officer