GRESB: Your Key to Sustainable Real Estate and Infrastructure
The real estate and infrastructure industry is always under heavy scrutiny with its high carbon emissions, driven by increasing investors’ and tenants’ demand for environmentally and socially responsible practices. Leading developers and property managers are progressively adopting various sustainable strategies to achieve better energy efficiency, water conservation, and other social elements. However, the best way to stand out among the crowd with verified ESG performance is by receiving the endorsement from internationally recognised industry-specific benchmarks such as GRESB (Global Real Estate Sustainability Benchmark).
Driven by the global institutional investors’ mandate to benchmark the sustainability performance of real estate and infrastructure asset classes, GRESB has become the go-to rating/assessment. Its transparent and comprehensive framework aligns with global ESG standards.
What Does GRESB Measures?
GRESB uses a standardised approach to evaluate real estate investments across various regions and property types. Its methodology is well aligned with global reporting standards, such as TCFD and GRI standards, enabling investors to compare performance and identify ESG risks and opportunities on a specific asset. The GRESB assessment process involves evaluating companies across three key components:
- Management: This component assesses a company’s ESG leadership, policies, reporting practices, and stakeholder engagement. It evaluates how well a company integrates sustainability into its overall business strategy.
- Performance: This component measures a company’s actual environmental and social performance, including energy consumption, greenhouse gas emissions, water usage, waste management, and tenant satisfaction.
- Development: This section focuses on the sustainability considerations incorporated into new construction and major renovation projects. It evaluates factors such as green building certifications, material selection, and energy efficiency in development pipelines.
GRESB or Other Agnostic ESG Ratings?
For asset owners and operators, it is always a challenge to decide which ratings or assessments they should go with. As embarking onto one rating means they need to continuously make improvements and be assessed on the 12-month cycle over a few years. While various ESG ratings agencies exist in the market, GRESB offers unique advantages for the real estate and infrastructure sector as below:
- Real Estate and Infrastructure Focus: GRESB is the only internationally recognised assessment that exclusively covers real estate and infrastructure sectors, ensuring all questions are material to the industry and providing highly relevant and meaningful ESG scores.
- Comprehensive Coverage: While some agencies only rate publicly listed companies, GRESB assesses both listed and non-listed entities on a voluntary participation basis. Other than the absolute score and 5-star rating according to the participant bell curve percentile, GRESB also has a relevant peer group benchmarking, allowing entities in highly similar subsectors to rank among themselves.
- Transparency: GRESB provides full visibility into assessment questions and scoring methodology, and you can download the questionnaires for real estate and infrastructure from GRESB website. They even provide an assessment simulator to support participating entities in their preparation to clearly identify areas for improvement and optimal scoring during the assessment period from April to June annually.
- Enter into Investor Radar: Over 170 of the world’s top property investors and pension funds (who are the GRESB members) are leveraging on such annual assessments to filter and select new investment targets for their portfolios. Entities may choose to restrict GRESB investor access to scores and answers in their first year of participation to allow for performance improvement before wider disclosure.
Interested in understanding more about how to ace in GRESB assessment? In the next few articles, we will further analyse the scoring measurements of GRESB Assessment in real estate and infrastructure sectors. We will also discuss the tangible benefits of having GRESB in the belt of your ESG performance accolades, both in terms of company financial performance and green financing.
Also Read:
Sustainability in Real Estate: Introducing GRESB
Elite Asia Becomes GRESB Partner: Driving Real Estate Sustainability
