For the uninitiated GRESB assesses the sustainability performance of real estate and infrastructure portfolios worldwide. GRESB is the global environmental, social and governance (ESG) benchmark for real estate assets.
GRESB’s stated “mission is to enhance and protect shareholder value by assessing and empowering sustainability practices in the real asset sector.”
They do that by offering ESG data transparency in scorecards, benchmark reports and portfolio analysis tools.
The bottom line is that ESG data is increasingly used by institutional property investors to make investment decisions. There are meaningful differences between real estate owning companies and GRESB provides ‘actionable data’ within a framework for an assessment of the differences that influence risk and returns.
Of course there are strong geographic variations in when and how investors including capital markets engage on ESG. European investors are significantly more engaged than U.S. investors (some speculate publicly associating with United Nations global warming rhetoric results in U.S. investors being less engaged).
But you care because this year 903 property companies, REITs, funds, and developers participated in GRESB’s annual Real Estate Assessment, an increase of 6% over the previous year. The Assessment now covers more than 79,000 assets (.. of which more than 49,000 reported at the asset level versus only company portfolio data) in 64 countries representing over $3.6 Trillion in gross asset value.
A trillion is 1,000 times larger than a billion, so 3,600,000,000,000 in gross asset value is a huge dollar amount. Hence you should be paying attention.
The GRESB listed real estate data covers 207 entities representing 61.2% coverage of the major developed listed real estate indices. This includes 75 of the top 100 largest REITs by market cap. The non-listed real estate dataset covers 666 private entities, representing 75 of IPE’s Top 100 Real Estate Investment Managers (participating with at least one fund).
And you should really care because GRESB data is incredibly valuable not only for institutional investors in real estate on the East and West coasts of North America, but also for banks, brokerages and a host of others interested in risk and returns in a broader breadth of real estate owning entities. GRESB data assessments are guided by what the industry considers to be material issues in the sustainability performance of real asset investments.
Owners participating in the annual Assessment receive comparative business intelligence on where their data stands against their peers, a roadmap with the actions they can take to improve their ESG performance and a communication platform to engage with investors.
Significantly, the 2018 global average GRESB Score increased to 68, up from 63 in 2017. This “strong improvement reflects the industry’s commitment to further integrate best practices related to ESG issues.”
Periodically a new issue emerges as an important consideration for investors in real estate and in response to a string of weather related disasters in 2017, this year resilience was such an issue. This motivated GRESB to introduce a new Resilience Module for both property and infrastructure thus providing nearly 150 resilience related data elements about each company for those investors now interested in resilience.
This law firm works with businesses interests to assess ESG matters including those that can best advantage them with capital markets.
There is no doubt that increasing numbers of investors are taking ESG data into account in their investment decisions, with governance being the most common dataset they consider, and GRESB is the best at offering ESG data transparency in real estate assets through its data scorecards, benchmark reports and portfolio analysis tools.
GRESB B.V., formerly known as the Global Real Estate Sustainability Benchmark, is a private limited company incorporated in the Netherlands that is a wholly owned subsidiary of Green Business Certification Inc., the Washington DC based non-profit entity related to the U.S. Green Building Council, Inc. In concert with USGBC, GRESB B.V. undertakes the day-to-day management of GRESB’s activities. The 30,000 foot view is what USGBC LEED certifies on a building basis, GRESB assesses on a portfolio basis.
You should begin to take advantage of GRESB’s incredibly valuable data.