With the GRESB results for 2020 revealed recently, it’s clear that sustainability and ESG are increasingly important in the real estate market.
Participation in the assessment globally has gone up by 22%, with data on key environmental performance indicators reported at asset-level for more than 96,000 assets, across 64 countries. In Europe, there was a 24% increase in submissions for 2020. While the majority of those are from the UK, in Germany there was almost an 80% increase from 24 to 44 entities, which is a good indication of the growing market for GRESB and ESG in the region.
While it’s easy to view the GRESB assessment simply as a point scoring exercise to benchmark against your peers, it is much more useful when used as a complimentary piece to support impactful decisions as part of a holistic approach to ESG.
Here we share some important things to consider:
- A tool for continuous improvement. Using GRESB as a tool rather than simply a score can start your organisation on an ESG-journey of continuous improvement, for any fund. GRESB data can form an important part of the Plan-Do-Check-Act process (read more about that in this blog), and your assessment results will inform your improvement plan for the following year.
- Providing a framework for ESG strategy development. The variety of topics covered by GRESB opens up the possibility for everyone to develop a unique ESG-strategy and implementation schedule tailored to their specific organisation. It doesn’t have to be about chasing ‘easy’ points by completing as many Green Building Certifications as possible, although we are happy to help you achieve those too. Each organisation has individual priorities, and the assessment topics can help build a framework for your strategy.
- Laying the foundation for ESG reporting. Having gone through a phase of ESG strategy development and a first period of GRESB, relevant ESG information on your organisation and funds will have been collected in a structured manner. With all of this data and information already collected, making the step towards your first annual ESG report, addressing the EU regulation on sustainability‐related disclosures in the financial services sector, or the recommendations of the task force on climate-related financial disclosures (TCFD) in the UK will not seem such a huge task.
- A focus on improved performance. There were several changes to scoring for 2020. An adjustment to a 30/70 split between the management and performance component and mandatory asset level reporting shifts the attention to actual activities on an asset level and the stakeholders associated directly with those assets. This means that the focus is now more on ESG performance and showing real improvements on environmental and social issues of the built environment over time.
- A pathway to decarbonisation. We have found that starting the conversation about GRESB with our clients often leads to more ideas and solutions than the benchmark asks for. For example, clients can begin to see the opportunity for journeys towards a decarbonized portfolio. This year GRESB linked the data entries to the Carbon Risk Real Estate Monitor (CRREM) and made a pre-filled download available for the participants. Also, the role of embodied carbon in the built environment is showing up on the horizon for investors, which we are following intently. The further we can carry these discussions the closer we get to more healthy and sustainable spaces. For everyone!
If you’d like to know more about using GRESB as part of your wider ESG, decarbonisation and related reporting strategies, please get in touch with us.
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