GRESB Outlook – 2017 and Beyond

2017: Stable assessments and new products & services

When we launched GRESB more than seven years ago, our main goal was to help companies and funds assess the sustainability performance of their portfolios. At the time, there weren’t many programs linking companies and investors to sustainability metrics. Fast forward to today and sustainability has now become a key indicator of performance.
The companies that participate in the annual GRESB assessment and the investors that use the assessments to make investment decisions see the benefits of understanding sustainability metrics because it helps them invest more meaningfully and make better decisions.
More and more, Environmental Sustainability and Governance (ESG) issues have come under scrutiny and through GRESB, we have been able to provide actionable information and tools to proactively monitor and manage the sustainability performance of portfolios.

Changes to the GRESB Assessments

Over the years as we’ve learned what works and what doesn’t and we’ve made many changes to the various GRESB Assessments, to the process around our annual data collection, to our now state-of-the-art GRESB Portal and to our data validation process. These changes have been influenced by members like you, the Advisory Board, the Benchmark Committees and through public consultations, with the aim to better reflect the dynamics of ESG trends, risks and opportunities, and increased ESG reporting requirements in the real asset industry.
In the near term, GRESB believes that further change is required to continue to best serve the industry and its capital providers for 2017.
Our main objectives are to keep the GRESB Assessments stable, focus on further diffusing GRESB into the marketplace, offer investment grade data by advancing our data validation process and making things easier for our GRESB users.
To that end, the GRESB Real Estate Assessment and Infrastructure Assessments have seen small improvements to increase the quality of data and the guidance. The GRESB Debt Assessment has been refined to better incorporate traditional balance sheet lenders, in addition to assessing real estate debt funds.
For the first time, we will also communicate our participation targets for 2017:

  • GRESB Debt: 35 participants
  • GRESB Infrastructure: 75 Funds and 250 Assets participants
  • GRESB Real Estate: 800 participants

More streamlined reporting

We also aim to offer seamless ESG reporting for companies, funds and operators. New changes to the assessments include:

  1. prefilling information already provided in previous years
  2. automating data-connections via API connections
  3. broadening the level of information that can be provided to GRESB through API connections and Excel spreadsheets.

Our ultimate goal is to minimize the reporting burden by automatically updating sustainability performance data and only requiring updated organizational information.

Investment grade data

The second goal of investment grade data starts with the data that is submitted to GRESB. To reduce ambiguity and to clarify the intention of each indicator, the GRESB Reference Guides have been further enhanced. Second, the successful GRESB Training Program have been expanded, covering both those just starting out with GRESB through an introductory course, as well as providing deeper insights for the more experienced through an advanced course. Third, the GRESB Portal will be extended to provide real time feedback on performance data provided by companies and funds, highlighting out incorrect data before it is even submitted. These automated and proactive checks will also ensure a match between the size of the portfolio and the scope of the Performance Indicator reporting. Fourth, and important for the quality of the data, is our review and validation process. GRESB will increasingly collaborate with GBCI, the certification and credentialing body within the green business and sustainability industry, to further improve the validation process and to guarantee independent, accurate, and timely validation.

More efficient data sharing

ESG does not happen just three months per year. Our ambition is to move towards a GRESB Assessment process that is, for a big part of the Assessment, less year-specific, removing pressure for participants to report during a three-month time window.
The structure of the GRESB Assessment will evolve towards “management and policies” on the one hand, and annual “measures and performance,” on the other hand. The former relates to relatively static ESG information, while the latter relates to the dynamic annual performance data of the underlying assets. Using this structure, the GRESB Portal can also serve as an online tool for companies and funds to efficiently share ESG information with investors during the fundraising process. We will introduce this new functionality in the second half of 2017.

New feature: GRESB Public Disclosure Level

On April 1, GRESB will launch a new product feature to complement the GRESB Real Estate Assessment, providing investors with insights that are currently not captured in the Real Estate Assessment data. The GRESB Public Disclosure Level is an overall measure of ESG performance disclosure by listed real estate companies and will include both companies participating in the GRESB Real Estate Assessment, as well as companies that are not yet reporting to GRESB. A focus group of listed property companies has evaluated this newly developed feature, and provided feedback on methodology and output.

New Education

Data alone is not enough. GRESB wants to deliver thought leadership and to empower the market to not just respond to the GRESB Assessments, but to fully embrace the market transition towards increased ESG performance. Trainings, events, and GRESB Insights are critical to fulfill this part of our mission. Therefore, GRESB Training sessions in Spring 2017 and ESG Masterclasses in Autumn 2017 (after the results release) will be expanded to include GRESB Infrastructure. We will introduce a new event, the GRESB Spring Conference in London on the 4th of May. In Asia, a Blueprints for Green Buildings roadshow is scheduled from February to May. The now-common GRESB Release events will take place in the week of 11-15 September in key markets, followed by results events in local markets. Last but not least, we run a pilot with a couple of large corporates whom are keen to launch a Corporate Real Estate Assessment in 2018.
I look forward to what the future for GRESB holds. GRESB’s unique assessment and peer benchmarking process provides actionable transparency and accelerates market transformation. Our near-term vision helps us continue to create market awareness of the important role that ESG issues play in successful business and helping companies “do well by doing good.”
This article is written by Sander Paul van Tongeren, Managing Director of GRESB.