Champion REIT: Governance Weaknesses Cloud Otherwise Encouraging ESG Progress

4.66
35 ratings

Champion Real Estate Investment Trust (REIT) is a Hong Kong-listed REIT, with the key objective to provide investors with stable distributions, in addition to long-term capital growth. The REIT mainly invests in Grade-A commercial properties in prime locations and is managed by Eagle Asset Management Limited. An analysis of the company's environmental, social, and governance policies are as follows:


Environment


From an environmental perspective, the company scores favorably, particularly outperforming on the Resource Use Score front, but underperforming on the Environmental Innovation Score front.


For instance, it has implemented a resource reduction policy, which compares to the presence of a clear policy in the prior year. The company has implemented a water efficiency policy, with an energy efficiency policy implemented as well. This compares to the presence of a similar policy in the prior year.


Environmental policy areas the company is currently lacking include the setup of an Environment Management Team, Environmental Materials Sourcing, and Toxic Chemicals Reduction. Areas the company has addressed include Environmental Supply Chain Policy, Resource Reduction Targets, Water Efficiency Targets, Energy Efficiency Targets, and Environment Management Training.


The company has also implemented renewable energy use, which compares to the presence of a clear policy in the prior year. The company has also notably not implemented green buildings as well, which compares to the lack of a defined policy in this regard in the prior year.


In terms of its carbon footprint, the company's Estimated CO2 Equivalents Emission Total stands at 26,279 in the latest fiscal year based on Reported CO2 Estimates.


Social


From a social standpoint, the company scores favorably, particularly outperforming on the Human Rights Score front, but underperforming on the Product Responsibility Score front.


For instance, it has implemented a health and safety policy, which compares to the presence of a clear policy in the prior year. The company has also implemented an Employee Health & Safety Policy, with a Supply Chain Health & Safety Policy not implemented as well. This compares to the lack of a similar policy in the prior year.


As of the latest fiscal year, there have not been Management Departures, while the prior year saw no departures. Meanwhile, the company experienced no strikes this year, which compares to no strikes in the prior year.


Governance


From a governance standpoint, the company scores unfavorably, outperforming on the Management Score front, but underperforming on the Shareholders Score front.


The company does not have a Corporate Governance Board Committee, but has a Nomination Board Committee, has an Audit Board Committee, and does not have a Compensation Board Committee. The company does have a Board Structure Policy and does have a Policy for Board Independence in place. The Board has held four meetings in the last fiscal year. The Board size currently stands at seven members based on the latest annual/ESG report.


The Board has an average tenure of 11.6 years, while its Board diversity stands at 14.3% for cultural diversity and 14.3% for gender diversity.


The company has not implemented a Policy for Executive Compensation Performance and has not linked Executive Compensation to ESG Performance. The company also has not implemented a Policy for Executive Retention, and has not implemented a Succession Plan, and has implemented an External Consultants policy.


The company has not implemented CEO-Chairman Separation and does have its CEO as a Board member. Its chairman is not an ex-CEO. Board member term duration stands at three years. Notably, the CEO compensation is not linked to total shareholder return. Meanwhile, executive compensation is not linked to long-term objectives. Sustainability compensation incentives have been implemented. Thus far, there have not been any executive compensation controversies.


Sources:


http://www.csrhub.com/CSR_and_sustainability_information/Champion-REIT


https://www.championreit.com/sustainability/our-approach/sustainability-management


https://www.championreit.com/investor-relations/financial-reports

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