For most people, the first week of September means the end of summer and returning to work, but for the real estate industry, the first week of September means the release of the GRESB data – how does the industry stack up when it comes to sustainability performance? With only three days to go until the release of the 2016 data, here are a few of the highlights to look forward to:
- Participation in the GRESB Real Estate and Debt assessments continues to increase – Over the past 7 years, GRESB has analyzed the sustainability performance of more than 1,000 real estate portfolios, both private equity and listed companies. In 2015, 707 entities disclosed data on their environmental, social, and governance (ESG) performance, benchmarking themselves against their peers, an increase of 11% compared to 2014. 2016 marks yet another increase in the overall participation, reflecting a steady increase across regions, particularly strong in North America.
- Overall sustainability performance continues to improve – It turns out that repeatedly going through the six stages of grief pays off: entities with seven years of GRESB reporting under their belt outperform their peers.
- The environmental impact of the real estate sector is significant, but decreasing – Investors and regulators expect significant reductions in carbon emissions form the real estate sector, and following COP 21, they demand even further action. We observe notable reduction in carbon emissions, resulting in a like-for-like decrease. The September 7 release will provide detailed information on regional performance of the real estate sector.
- Insights into reporting processes and the use of asset level data tools – Similar to previous years, GRESB has further developed the ability to report energy consumption, GHG emissions, water consumption and waste data at both the (aggregated) portfolio level as well as at the asset level. Reporting companies and funds can choose to make use of a host of GRESB Partners that provide API (automatic upload functionality), GRESB converters (using, for example, EPA Energy Star’s Portfolio Manager) and mapping tools to seamlessly stream or upload their data. These asset data connections appear to be increasingly appealing to GRESB participants and the consumption data for about 25% of the 66,000 (!) assets included in the 2016 GRESB analysis was received through one of the data aggregation tools made available by GRESB and its Partners.
- Emerging issues – 2016 saw the launch of the Health & Well-being Module, an emerging topic in the commercial real estate sector. The Module was introduced to distinguish leadership in products and in organizations, and the participation of 174 entities demonstrates that health and well-being is indeed on the radar of many commercial real estate investors. The results of the Health and Well-being Module contribute to competitive differentiation and will further the understanding of best practices.
If COP21 calls for increased transparency, progress tracking and rapid reductions in global emissions levels, how close is the real estate industry to achieving these objectives? And what does this mean for its financial performance? Join us on September 7 in London, New York, Sydney; Singapore on September 8 or Toronto on September 9 to find out and…stay close to your GRESB login details. It’s t-3 days until the 2016 GRESB results release and they promise to generate headlines.
This article is written by Roxana Isaiu Director, ESG & Real Estate.