Minto Apartment REIT’s 2020 ESG Report (Courtesy Minto)

Minto Apartment Real Estate Investment Trust (REIT) has released its first standalone ESG report, including 18 specific initiatives with distinct goals. Minto’s 2020 ESG Report organizes the action plan under three pillars to guides its efforts over the next five years: business resilience, community impact and environmental impact.

Some of the highlights of the past year are an eight per cent reduction in energy intensity and an 11 per cent decrease in carbon emissions. Currently, 61 per cent of Minto’s portfolio has a green building certification.

“The big takeaway, that we’re hopeful that the readers will see in there, is that elements of what had become recognized as ESG have been important to Minto for many years,” said Ben Mullen, vice president of asset management at Minto Properties. “They’re really ingrained in our DNA.”

Minto’s ESG objectives form 50 per cent of its annual incentive plan. One of those objectives is to reduce portfolio energy use by 10 per cent and water use by five per cent by 2025.

Vintage buildings present a challenge

While Minto is aligned on ESG in the present, the company’s history and portfolio mean that certain buildings are now considered vintage and might not be up to modern environmental standards.

“I think as we continue to work through building retrofits, and learn and establish best practices, we’re going to find the vintage of a building is very important,” said Mullen. “There are all kinds of challenges that an older building needs to overcome from a resilience point of view and from a health and well-being point of view, as well as opportunities that those older buildings can pursue that are so different than new development.”

In a Q&A session to support the launch of the report, Minto was asked about differences in its development standards today compared to the first Leadership in Energy and Environmental Design (LEEDS) certified building. Mullen called the differences “pretty staggering” when taking into account evolving technology and changing energy sources.

In balancing ESG initiatives against the financial incentives, the report explains the 18 goals were voted on by a wide range of stakeholders, which includes residents, employees and investors.

Case study: Castleview apartments in Ottawa

Mullen mentioned a particular case study in the report, for which Minto enlisted RDH Building Science to consult on Castleview – a 26-storey, 241-suite high-rise concrete building constructed in Ottawa in 1973.

Out of that came a roadmap for all the necessary retrofits to get the building to current environmental standards over the next three to five years. It involves an investment of approximately $19 million for window replacements, envelope over-cladding, HVAC replacement and ventilation upgrades, as well as a minimum target of a 50 per cent decrease in energy consumption, and 40 per cent reduction in carbon emissions.

From there, the REIT hopes to take the lessons learned during the Castleview pilot project to make the necessary retrofits to all its properties by 2050.

“What I hope is that we really learned how to execute what the true costs of execution are. I expect that technology improves. And there’s more partnerships, public and private that there’ll be opportunities (for), but time will tell,” he said. “So the financial modelling of it, I think, comes after certainly initial piloting and development.”

Aside from the financials, he also notes it’s important to take into account the possibility of changing regulations and of the environment. The same thinking goes for Minto’s ESG strategy overall, which is likely to evolve as time passes.

The Minto Group has also been participating in the Global ESG Benchmark for Real Assets (GRESB) since 2015, but this year marked the first for the REIT. It received an inaugural score of 70, ranking sixth among North American multiresidential participants.

About Minto Properties

Minto Apartment REIT owns 29 multi-residential rental properties in Toronto, Ottawa, Montreal, Calgary and Edmonton. It also owns three convertible development loans, two in Ottawa and one in the Greater Vancouver Area.

The REIT’s portfolio has 7,277 suites under their management, totalling $2.3 billion in assets. Founded in 1955, Minto is the only 100 per cent urban residential REIT in Canada.