As a result of the strategic integration of ESG into the company’s operating model, Aldar Properties (Aldar) has seen a significant improvement in its ratings on three of the most important worldwide environmental, social, and governance (ESG) benchmarks year over year.
Aldar received stronger ESG ratings from Sustainalytics, MSCI, and the S&P Dow Jones Sustainability Index (DJSI) as a result of improved data disclosure, governance, and risk management procedures, as well as supply chain and environmental management. Aldar raised its score from 16.6 in 2021 to 16.1 in 2022 on the Sustainalytics ESG risk assessment scale, indicating a low degree of ESG risk. A rating between 10 and 20 is considered “Low Risk” when evaluating results on a scale from 0 to 100.
Aldar’s MSCI ESG rating was also raised in 2022 from “BB” to “BBB,” as well. MSCI keeps track of ESG risk exposure and how well companies manage such risks compared to their peers. Aldar increased its score on the Dow Jones Sustainability Index from 58 to 60 in 2022, an increase. With a higher score, the business now ranks in the top 7% of the 237 global real estate firms that DJSI assessed, according to WAM.
Commenting on the improvement in ESG ratings, Salwa Al Maflahi, Director of Sustainability and CSR at Aldar, said, “The broad improvement in our ratings reflects the solid steps we have taken to enhance the quality of our data across the board and to enhance risk and governance processes. The commitments we have made to reduce our energy usage, enhance the quality of life in our communities, and promote greater diversity and inclusivity are also demonstrated in the improvement of our ESG and sustainability ratings in 2022. While we have integrated sustainability into our operating model, we recognize that there is more work to be done, and we will continue to take the necessary measures that will further bolster our ratings and enrich shareholder value.”
The agreement was signed in 2022 as part of Aldar’s efforts to reduce its carbon footprint. For up to five years, Aldar’s owned and managed operating assets will be entirely powered by clean energy sources from Emirates Water and Electricity Compan. In order to lower its energy use across 80 assets, including hotels, schools, business, recreational, retail, and residential buildings, Aldar also started a portfolio-wide energy management project.
Aldar will be able to save about AED 40 million annually on energy consumption costs thanks to the initiative, which will also reduce energy emissions. Following this, a promise to invest AED 25 M in energy retrofit projects to make 13 of its managed residential communities more energy and environmentally-efficient was made in September. The investment will lower annual utility use in the 13 neighborhoods by a combined AED12 M and offset 19,000 tCO2 per year.
Aldar became the first Middle Eastern company to advise SBTi on a science-based net-zero target-setting for real estate and construction companies worldwide when it joined the Expert Advisory Group for the buildings sector in August 2022. SBTi is an organization that promotes science-based targets. Aldar joined the Clean Energy Business Council in November, a non-profit member organization that seeks to unite the public and private sectors, to hasten the MENA region’s transition to clean energy.
