This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012). Key E&S issue and risks associated with the project include: (a) adequate E&S screening and due diligence for proposed assets to be acquired in line with IFC PSs; (b) development and implementation of E&S procedures for construction and expansion phase of existing and proposed assets; (c) assurance of fair, safe and healthy working conditions for all employees in line with the IFC PS2 and legal requirements; (d) management of air emissions, effluent and waste in line with WBG EHS Guidelines; (e) life and fire safety design for all assets; (f) security and traffic management; and (g) community grievance mechanism.

Grit has a corporate ESG policy which guide the ESG management system. The management system includes a sustainability policy, applicable guidelines and requirements, organizational capacity, identification of risks, emergency preparedness and response plans, governance & business integrity, ESG procedures and policies and performance measurement. As part of the ESG management system, Grit has also developed policies and procedures on land acquisition, chance and find, biodiversity, contractor management, waste management and external grievance procedure. Grit has initiated the ISO 45001 OHS Management System accreditation process. Grit’s ESG management system is generally in line with IFC PS requirements and implementation at the property level is noted to be robust.

Grit has a hazard and risk assessment policy. Risk assessment is conducted at property level by an external consultant, and the responsible Grit staff with a focus on OHS risks using a standard risk assessment form. Grit ensures the action plans from the risk assessments are implemented by the tenant. Going forward, Grit will identify E&S risks and impacts through an E&S due diligence process to identify any potential legacy E&S issues from brownfield acquisitions (ESAP #1a).  For the greenfield assets, Grit will develop procedures to include social aspects assessment into its existing risk and impact identification and evaluation process, in compliance with PS1 and applicable national requirements. (ESAP #1b).

Grit does not have a dedicated ESG officer. The environmental, social and governance is overseen by the Head of Responsible Business who coordinates the implementation of the ESG policy and roles are distributed to various people forming an Executive Committee. Given the increased number of assets, Grit will retain an external competent professional to carry out the risks and impact identification process during project development, implementation, routine operations and carry out contractor E&S supervision until such time as the group may need to recruit a competent ESG Manager. (ESAP #2).

Grit has a documented corporate level emergency preparedness and response policy and guidelines for the properties. All Grit properties in Kenya and Mozambique have property level emergency preparedness and response procedures. Roles, and responsibilities for various teams responsible for evacuation, rescue, and firefighting are defined and displayed at various locations across the facilities. Emergency alarm buttons, call numbers, evacuation route maps and hose reels have been placed at strategic locations The EHS compliance team conducts internal audits to ensure implementation of fire safety measure. External audits are also conducted as required by national laws and insurance companies. Workers have been trained in fire safety and operation of fire safety equipment semi-annually. As part of contractor management policy, OHS training will be extended to third party workers.

For the properties appraised, key performance indicators (KPIs) such as record of injuries, life and fire safety (L&FS) measures, usage of personal protective equipment (PPE), energy and water consumption, waste generation during operations are recorded. The KPIs are reported monthly to the management team. The Grit team visits individual properties to assess KPIs achievements.

 Grit has documented HR policies and procedures that are consistent with IFC PS 2 requirements and the national labor regulations and apply to all employees. The tenants have stand-alone HR policies and procedures guided by national laws. Each worker receives a written contract that describes the working conditions and terms of employment, an employee handbook and access to the HR management software. The contract specifies benefits and welfare for workers including remuneration and promotion, employee schedule, equal opportunities, working hours, rest periods, etc. and the handbook specifies employment policies, health and safety and grievance and termination. The company’s HR team also monitors the labor contractors’ compliance with applicable labor laws and compliance with related contract clauses.

Grit has 147 employees, two consultants, four contract workers and one intern.    Grit HR policy does not prohibit the freedom to associate and workers right to form and join workers organization however, none of the employees have joined a worker’s organization. The HR policies addresses non-discrimination and equal opportunity for its permanent staff, contract staff and contractor workers. The HR policies including the protecting the workplace policy, contractor OHS agreement and service provider agreements prohibit engagement of child, forced or bonded labor practices.

Grit has documented grievance mechanism for its internal stakeholders, which allows for submission of anonymous grievances and is also available to the contractors’ workers. Related training and awareness campaigns are conducted.

Grit relies on contractors for greenfield construction and brownfield refurbishment. As part of its contractor management policy, contractors are required to comply with national labor laws through specific contract clauses. The labor engagement practices, and statutory documentation maintained by the contractors are audited periodically. Based on previous contracts, no temporary workers housing camps are built during construction.

Grit’s OHS management system include (i) policy and procedures for hazard identification and risk assessment for construction, operational and maintenance activities, (ii) a risk register of significant hazards is in place and communicated to all affected persons; (iii) training plan on OHS and (iv) provision of appropriate PPE.  Grits tenants were observed to have OHS management systems, which were being implemented. Incidents and/or accidents are reported and investigated as per internal procedures. No significant OHS events occurred in the last three years and there were no fatalities. The company understands the importance of monitoring contractors’ lost time frequency rate annually and should be lower than the 2021 US benchmarks for the sector (i.e., LTIFR 1.9 Nonresidential building construction).

Aligned with its sustainability policy, Grit is implementing initiatives to reduce energy and water consumption in all its properties. Sources of energy and water is supplied mainly from national grid and local water supply company respectively. The company intends to improve in building-efficiency and to reduce water and electricity consumption across its assets by 25% by 2025 using 2019 as the base year, through installation of sensor taps, leak detection devices, low flow tap nozzles, rain and grey water harvesting devices and automated landscaping irrigation.  On energy, the company plans to reduce electricity consumption through replacing existing equipment with energy efficient equipment, installation of solar PV plants, use of LED lighting and use of light motion sensors.

The company closely monitors resource consumption i.e., water consumption, and electricity and has set a KPI of 25% reduction in Group carbon emissions by 2025, using 2019 as a base year. The company quantify direct emissions from buildings carbon emissions and staff air travel. Upon projects’ completion, GHG emissions are expected to be below 25000 tons carbon dioxide equivalent per year

The company has hazardous and non-hazardous waste management policy and procedures including a system of appropriate sorting, handling, storage, and disposal which are consistent with applicable legal requirements. The company has set to optimize waste management and recycling across our assets by 25% through tenant awareness training and collaboration, encourage waste sorting, recycling, and compositing of organic waste. All hazardous and non-hazardous wastes are collected for disposal by authorized public service agencies specialized in each type of waste. For the facilities visited during appraisal, all hazardous materials were noted to be properly labelled and stored in the designated area.

 The current and the pipeline assets are located within existing industrial complex or in designated industrial area, away from communities, no significant additional impacts on the health, safety and security of the local community are expected. However, to deal with any local traffic increase, the company will raise driver’s awareness on safe driving as stipulated in Grit’s community health and safety policy.

The current assets have the required fire-fighting systems installed, trained wardens and conducted regular fire drills as part of their emergency preparedness and response plans. This is aligned with Grit’s Life and Fire Safety Standard. For the pipeline assets, Grit will ensure an expert of international L&FS standards, upon physical completion of the building, to verify that the fire-fighting systems were installed as designed in accordance with the L&FS section of the WBG General EHS Guidelines and to provide the certification, affirming that the L&FS systems were installed as designed as per an international life and fire safety code and are properly tested. (ESAP #3)

Grit has a security management policy and procedure. The company engages with third party vendors for access control and guarding of some facilities. The guards are unarmed and trained in emergency response in addition to regular training conducted by company for the security workers on the standard operating procedures for their job including human rights and engagement with the communities. For properties on lease, tenants are responsible for their security. However, Grit as part of its monitoring, evaluates the security workers to follow standard operating procedures and to be periodically trained.

 The company has documented stakeholders’ engagement procedure which includes identification of stakeholders, focus areas of engagement, communication channels, frequencies of communication and communication activities, disclosure of information, consultation, and an external grievance mechanism.  Grit has also developed an external grievance register to document grievance statistics and information in the form of grievance logs, a grievance redress database, and narrative reports on grievance resolutions.

Grit publicly shares its E&S performance, mainly through the sustainability report that is submitted to all stakeholders annually and made available through the Grit website (Please refer to the 2022 ESG Report here: https://grit.group/wp-content/uploads/2022/11/sustainability-report.pdf )

Grit incorporated The Grit Foundation in 2022 as a strategy to centralize corporate and social responsibility (CSR) program and community initiatives. The Foundations approach is to finance impactful and meaningful projects that bring value to the community. To date Grit has invested over US$70,000 on CSR and community projects.

Contact Person: Shevira Bissessor

Company Name: Grit Real Estate Income Group Limited

Address: Unity Building. The Precinct M2 Junction B11 Fond du Sac Road Grand Baie, Mauritius

Email: shevira@greafrica.group

Phone: +230 260 0524