Sustainability at Avara

Avara manages property assets worth some EUR 1.5 billion and develops new, sustainable rental housing in Finland’s growth centres.

We impact people’s everyday life, society, and the environment as positively as possible. Our sustainability priorities guide us on our way to the best sustainability in the industry. We report the results of our sustainability work every year.

Our priorities

We offer sustainable opportunities with attractive risk and return levels for making profitable long-term investments in rental housing in Finland’s growth centres.

We are committed to reducing the climate and environmental impacts of housing and increasing the efficiency of resource use through actions with measurable impacts.

Our operations, decisions, and development projects have a positive impact on the well-being of tenants, employees, and local communities.

Business principles and risk management

Avara’s operations are guided by its strategy, values, and confirmed operating principles, which include Avara’s Code of Conduct, fair rental practices, business principles and good governance, remuneration system, internal control and risk management principles, HR and data security policies, and procurement guidelines.

UN Principles for Responsible Investment

As a signatory to the UN Principles for Responsible Investment, Avara is committed to supporting responsible ownership practices as well as promoting the practical implementation of responsible investment and cooperation in the real estate investment industry. The commitment also includes an obligation to report activities and results in the promotion of responsible investment.

Corporate responsibility reporting

Avara prepares extensive annual reports on its corporate responsibility. Avara’s sustainability report for 2023 has been reported in accordance with the Global Reporting Initiative (GRI) standards. Take a closer look at our sustainability reports and the impactful world of Avara’s corporate responsibility!

Avaras’ Principles for Considering Sustainability Risks in Investment Activities

The management and identification of sustainability risks are integral components of our investment process. We are committed to avoiding material sustainability risks that cannot be mitigated or transformed through immediate corrective measures. As part of our investment process, for both new and existing assets, we ensure that development measures are initiated alongside risk identification to reduce or even transform sustainability risks into strengths for the investment.

Our primary principles for addressing sustainability risks as part of our investment process include:

We prioritize residential properties where our active involvement can effectively address sustainability risks.
During the identification phase of potential investments, we take potential negative findings seriously:
- Identified sustainability risks are analyzed thoroughly.
- If a recognized sustainability risk is deemed material, we evaluate the feasibility of managing the risk through corrective measures.
- If the risk cannot be managed effectively through such measures, we opt not to invest.
- For less significant sustainability risks, we identify corrective actions to be initiated immediately before the investment decision is made and actively monitor their progress.
- As part of the final investment decision, we review all identified sustainability risks. This ensures that the entire decision-making team is fully informed about the status of sustainability risk management.

In our investments, we promote lifecycle cost efficiency and energy savings. The carbon footprint of housing and real estate is one of the most significant corporate responsibility themes at Avara. Intelligent heating control systems, energy-efficient new construction, and the use of renewable energy sources help reduce the environmental impact of housing while saving costs.

Avara offers investors the opportunity to invest profitably in rental housing while promoting and considering environmental sustainability, sustainable development, resident well-being, safety, and social factors.

The sustainability report of Avara provides core information about our financial, social, and environmental activities and their impact. Additional details on the implementation of responsible investing, sustainability factors, and related actions—both completed and planned—are provided in our sustainability report.

The Principal Adverse Impacts of Investment Decisions on Sustainability Factors

Sustainability factors mean issues related to the environment, society and employees, respect for human rights, and issues related to the fight against corruption and bribery. We take into account harmful sustainability factors in the investment process of our alternative funds and as part of our investment activities in real estate assets, while evaluating and monitoring related sustainability risks.

As part of the Due Diligence-process included in the investment process, we always evaluate and prioritize the sustainability risks of each investment asset and the harmful sustainability factors identified in each case separately. For the identified key risks, we determine the means of controls to mitigate these risks.

As part of our investment activities, we always comprehensively aim to reduce the harmful effects of the investment assets on sustainability factors.

The principal adverse sustainability factors and related PAI-indicators for our alternative investment funds are the following:

Exposure to fossil fuels through real estate assets
Exposure to energy-inefficient real estate assets
Greenhouse gas emissions
Energy consumption intensity
Waste production in operations

Additional information: SFDR (EU 2022/1288) Annex I Statement on principal adverse impacts of investment decisions on sustainability factors.

Additional information and information on the impact of adverse sustainability factors on the yield requirement for each fund are given in our fund specific information.

More information on sustainability factors and related actions taken and planned can be found in our Corporate Sustainability Report.

Avaras’ Remuneration Policy, Summary – How Sustainability Risks are taken into account

Avara Group ("Avara") remuneration system is based on the general principles of the remuneration system confirmed by the Board of Directors of the Group's parent company and complies with Avara's strategic objectives, which include taking into account Avara's real estate investment company-specific and fund-specific sustainability risks and criterias.

The remuneration system is confirmed at Group level separately for each calendar year by the Board of Directors of both the Group's parent company Avara Oy (Avara Ltd) and the Alternative Investment Fund Manager (AIFM), Avara Rahastot Oy (Avara Funds Ltd). The remuneration system is structured in such a way that it aims to avoid risk-taking that conflicts with the risk profile, rules or founding documents of the real estate investment company or fund managed by Avara.

The remuneration system also ensures that the different components of remuneration are balanced in a way that ensures fair and balanced remuneration and sound and efficient risk management.

Impactful sustainability