3 ASX REITs with notable ESG scores

Environmental, social and governance (ESG) factors are gaining investor favour. We take a closer look at 3 ASX REITs that have low risk ESG scores. 

| More on:
investor touching ethics button on a digital screen

Image source: Getty Images

In its 2019 annual report, the Principles for Responsible Investment (PRI) organisation pointed to Australia as one of the fastest growing countries with a commitment to responsible investment.

And, according to Nuveen’s head of engagement Peter Reali, the COVID-19 pandemic will lead to environmental, social and governance (ESG) factors being even more important for investors.

In light of this, we take a closer look at 3 ASX real estate investment trusts (REITs) that have low ESG risk ratings.

Vicinity Centres (ASX: VCX)

As Australia’s second largest shopping centre landlord, this $7.60 billion company has assets skewed to large shopping malls.

Sustainalytics (a provider of ESG and corporate governance research and ratings to investors) has given this REIT a very low ESG risk score, ranking it first among its real estate industry peers when it comes to ESG. The rating service provider said Vicinity Centres is at negligible risk of experiencing material financial impacts from ESG factors, due to its low exposure to, and strong management of, material ESG issues.

At the time of writing, the Vicinity Centres share price is $1.68 per share, up 17% year to date.

Dexus Property Group (ASX: DXS)

Dexus is one of Australia’s largest office and industrial REITs and has a market capitalisation of around $10.70 billion.

It has a similar low ESG risk rating to that of Vicinity Centres, with a slightly riskier score under “governance risk”. Sustainalytics ranks Dexus as number 2 within its industry group, just behind Vicinity.

In its recent annual general meeting address, Dexus management highlighted its belief that as Australia opens up after lockdowns, office markets will continue to benefit from urbanisation and growth in capital cities, and that investors should expect a revival in the Australian property market.

At the time of writing, the Dexus share price $9.68, up 6% year to date.

Stockland Corporation Ltd (ASX: SGP)

Stockland Corp is another REIT with low ESG risk, according to its Sustainalytics score. Stockland has a market capitalisation of around $10.90 billion, and operates a diversified portfolio of residential, retail and logistics assets.

Sustainalytics has given Stockland Corp a low ESG risk score, recognising that the company is focusing on strengthening its ability to endure material risks by implementing organisation-wide sustainability programs. According to Stockland Corp’s governance and risk report, this program involves the development of environmental management systems and a cyber risk management plan.

The Stockland Corp share price has enjoyed an upward rally since April, and at $4.49 per share at the time of writing it has almost returned to its pre-Covid price level of $4.60.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Miles Wu has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on REITs

A young couple stands next to a real estate agent in an empty apartment they are inspecting
REITs

Centuria Industrial Reit (ASX:CIP) share price rises after six more acquisitions

Key points The ASX’s largest domestic pure play industrial REIT has made more acquisitions Centuria Industrial Reit is spending $132.4 …

Read more »

Real estate, buying, property,REIT
REITs

Why this expert sees an opportunity for ASX property shares in 2022

Key points A high inflation print has weakened investor sentiment towards unprofitable shares An expert makes the case for why …

Read more »

A man wearing a face mask is stuck behind some closed steel gates.
REITs

Irongate (ASX:IAP) share price slides as takeover rejected again

The Irongate Group (ASX: IAP) share price is in the red on Wednesday after the company rejected a takeover offer …

Read more »

worried famer looks at his computer in front of a harvester, indicating poor prices on the share market
REITs

Why is the Rural Funds (ASX:RFF) share price falling on Thursday?

The Rural Funds Group (ASX: RFF) share price is sliding lower today despite no news having been released by the …

Read more »

An older farmer stands arms outstretched in a field with a big smile on their face.
REITs

The Rural Funds (ASX:RFF) share price has gone up 20% in 2021. Is it still a buy?

The Rural Funds Group (ASX: RFF) share price has risen by 20% over 2021. It has been a market-beating performance …

Read more »

Builder with back to camera wearing hard hat watching tractor earthmover in sunset
REITs

The Goodman Group (ASX:GMG) share price has notched up 8 all-time highs this month. Here’s why

The Goodman Group (ASX: GMG) share price has kept rising this month. It has notched up several all-time highs in …

Read more »

high, climbing, record high
REITs

Why is the Scentre (ASX:SCG) share price climbing today?

The Scentre Group (ASX: SCG) share price is in the green this morning despite no news having been released by …

Read more »

An industrial warehouse manager sits at a desk in a warehouse looking at his computer while the Centuria Industrial share price rises
REITs

Centuria Industrial REIT (ASX:CIP) share price lifts on valuation surge

The Centuria Industrial REIT (ASX: CIP) share price is edging higher during early morning trade. This comes after the industrial real estate …

Read more »