Sustainability Strategy
KingSett believes in building value through actively managing sustainability risks and opportunities associated with the ownership, management, lending and development of real estate across each asset’s entire lifecycle.
Our sustainability approach focuses on doing what is right for our stakeholders and the environment. We are driven by the opportunities and innovation sustainability integration presents in real estate. We believe our sustainability leadership and approach is a value creator and competitive advantage.
By incorporating sustainability risks and opportunities across our business we aim to create economic, social and environmental value. Our sustainability strategy guides us in delivering on our commitment to invest in sustainable, innovative solutions that enhance communities and mitigate risks and reduce environmental impact.
We are committed to investing in sustainable, innovative solutions that enhance communities, mitigate risks and reduce our environmental impact.
Core Objectives
1
Embed sustainability and responsible investing considerations into all our business processes
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Set meaningful reduction targets and execute decarbonization strategies
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Meet or exceed KingSett’s sustainable development guidelines and objectives
4
Identify, assess and manage the physical and transition climate risks and opportunities at an asset and portfolio level
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Drive positive social change in our communities and partner with charities
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Leverage a multi-disciplinary Sustainability Committee to guide the evolution of our strategy and program over time
Our Funds
CREIF
Our sustainability strategy and core objectives apply to all KingSett’s assets, lending and corporate activities. Since 2014, sustainability considerations have been integrated in our Canadian Real Estate Income Fund (CREIF) which holds core, long-term real estate investments. With a long-term view, we identify sustainability risks and opportunities, set decarbonization targets, implement operational upgrades to improve energy efficiency and report on our progress. As our strategy evolves, we have expanded our sustainability approach to capture more aspects of our business, including our mortgage, growth and affordable housing funds.
Mortgage
KingSett Mortgage Investments is committed to integrating sustainability considerations into our fixed income and lending business to create positive economic, social and environmental impact. In 2022, we became a signatory to the Principles for Responsible Investment (PRI) and developed policies and processes to formally incorporate sustainable investment considerations into our due diligence and decision-making to create value economically, ethically, socially and environmentally. We believe strong governance oversight creates the necessary structure to drive meaningful and sustainable impact and positively influence the decision-making.
After updating existing processes and introducing new policies in our lending business, KingSett completed our first submission to the PRI. While our score was slightly below the PRI median in the Fixed Income module, we anticipate an improvement in score in our 2024 submission as we implement new initiatives.
Sustainability Achievements:
- Achieved 11.5% loan commitments with a high ESG rating, surpassing our target of 5%
- Closed on over 800 affordable housing units
- Conducted due diligence over potential investment sponsors for governance-related activities such as anti-corruption, anti-money laundering evaluations, WorldCheck and CanLII searches
- Established a weekly Responsible Investment Committee meeting
- Implement a Negative Screening Policy
Next Steps:
- Expand ESG considerations in our lending processes
- Increase target of annual loan commitments with high ESG ranking
- Increase post-funding engagement with high ESG rated loans
- Complete assessment of climate risk at the regional level
Affordable Housing
KingSett’s Affordable Housing Fund was established to have a positive impact on Canada’s affordable housing crisis, produce exceptional communities and deliver scalable economics. The goal of the fund is to provide stable, risk weighted returns while delivering high quality, affordable housing for those in need across Canada’s rental markets. The fund includes joint ventures, ground up development, financing initiatives and other structures.
Valhalla Village
Construction commenced on Phase 1 of Valhalla Village, a purpose-built multi-residential development that will comprise a total of 494 units, including 172 affordable units with initial occupancy expected in late 2026. Financing for this development was secured through the government's Apartment Construction Loan Program. Valhalla Village is designed to be net-zero carbon, utilizing a geothermal system and heat pumps. The site will include a community agency space and public park, and is zoned to allow for a second phase to be constructed at a later date.
Birchmount
The Affordable Housing Fund entered into a binding agreement to purchase 50% of the 220 affordable units at Birchmount Green in 2023. Birchmount Green is a new development where move-in commenced in Q4/2023. The property includes rooftop gardens, a library, indoor/outdoor children’s play area, bike storage, a not-for-profit coffee shop and more.
Next Steps:
- Advance the development of 1,500 units in our pipeline in partnership with the City of Toronto and Greenwin
- Strengthen our partnerships with not-for-profits and community agencies to provide additional supplements to deepen housing affordability
Growth
As KingSett continues to reduce its environmental impact, we are expanding our utility data coverage to include assets in our Growth Funds. This will enable us to measure the environmental performance and set meaningful targets that will reduce climate risk and drive value.
The Growth Fund’s energy data will help us understand the full picture of our carbon emissions in our standing investments and the actions that will be required to achieve our Science Based Targets Initiative (SBTi) interim and long-term targets.
Next Steps:
- Adapt current sustainability strategies to identify opportunities within the Growth Funds
Case Study
Inspiring Initiatives
2023 Mortgage
ESG Competition
Each year, KingSett’s Mortgage team holds a Best ESG Deal competition. This internal event is an opportunity for smaller groups to present the ESG deal they worked on that best exemplifies sustainability to the wider team. The winner is decided by vote and the deal which has the largest environmental, social and governance impacts takes first place. For the first time in 2023, a single winner could not be decided, and the competition ended in a three-way tie. ESG related impacts for the winning projects included Indigenous-led land development, an affordable housing portfolio targeting net zero in new developments and a not-for-profit student housing co-operative operating as a socially, environmentally and financially responsible community. The competition helps showcase sustainability initiatives across KingSett’s mortgage funds and will continue to evolve as the debt team further builds out their sustainability platform.
Materiality
KingSett conducted extensive internal and external consultations to understand which sustainability topics matter most to our stakeholders and confirm that our sustainability efforts are aligned with our partners, customers and employees. The learnings from this exercise continue to shape our sustainability approach and objectives:
- Stakeholder feedback confirms KingSett is seen as a sustainability leader
- Our stakeholders are proud to partner with us and are eager to work together to meet our shared sustainability objectives
- While all 23 sustainability topics identified were deemed important, the 20 topics identified as strategic and core form the basis of our program
We will continue to focus on new and emerging trends to unlock value and improve the resilience of our assets and we will re-evaluate our materiality assessment by 2025.
Sustainable Development Goals
Our Sustainability Strategy positions us to make contributions to the UN Sustainable Development Goals (SDGs) most relevant to our business.
Doing so gives us the opportunity to positively impact the broader environments and communities in which we do business and enhance and strengthen our impact wherever possible.
| Goals | Our Commitments | 2023 Results | |
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 | KingSett is committed to reducing energy use across our assets and helping the industry develop cleaner sources of energy |
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 | KingSett strives for equity for all, to make our society and business more successful and works diligently to create a safe and inclusive workplace |
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 | KingSett is committed to creating more sustainable, accessible and environmentally friendly buildings and communities for all |
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 | KingSett seeks to reduce the material consumption at our assets through the conscientious use of finite resources and minimizing waste generation |
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 | KingSett is committed to reducing our carbon emissions and strengthening the resilience of our assets |
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Reporting Approach
Reporting is the primary way that KingSett informs key stakeholders about our sustainability approach, performance and progress. It is designed to meet the various needs of our stakeholders.
2023 Sustainability Report: An evolution of our annual impact and resilience reporting, KingSett’s Sustainability Report provides a high-level overview of our key accomplishments and performance from the year and demonstrates how sustainability and resilience builds value through actively managing the risks and opportunities associated with the ownership, development and management of real estate.
This Website: KingSett Capital’s sustainability approach and the performance of the KingSett Canadian Real Estate Income Fund LP (CREIF) (“Portfolio”) during the 2023 calendar year (January 1, 2023 – December 31, 2023), unless otherwise stated. Over time, we plan to expand our performance to include energy and emissions from our mortgages, growth and affordable housing funds.
2023 Verification Statement: Will be provided once 2023 verification is complete.