GRESB assesses and benchmarks the ESG performance of real assets, providing standardized and validated data to capital markets. We were established in 2009 by a group of large pension funds who wanted to have access to reliable data on the ESG performance of their real estate investments. In 2015, a group of ten founding infrastructure investors came together to establish the GRESB Infrastructure Assessments. Since then GRESB has grown to become the leading Environmental, Social and Governance (ESG) benchmark for real estate and infrastructure investments across the world.
2021 Assessments available in Pre-release:
Update on governance and engagement
Following last month’s announcement about the changes to GRESB’s governance, we are in the final stages of setting up the independent GRESB Foundation to own and govern the GRESB Standards on which the Assessments are based. All GRESB Members and Partners will be part of the Foundation. The Foundation Board will have broad representation from across GRESB Investor Members to ensure that the Standards remain investor-led, mission-driven and responsive to investor needs.
We recognize the importance of working closely with all our stakeholders over the next few months to ensure we establish the right structures and engagement processes under the Foundation. This design stage is crucial and the intention is for the GRESB Foundation to become fully operational by April 2021, with the right arrangements in place in time to oversee the development of the 2022 GRESB Standards.
The existing Advisory Bodies and Benchmark Committees will remain in-place in the interim period to oversee the release of the 2021 Assessments, as outlined below.
2021 Assessments Development Process
The annual Assessment development process is informed by in-house data analysis, market research, detailed gap analysis/alignment work, feedback from Assessment users and input from our governance groups as described conceptually in the figure below. This approach ensures that our Assessments and benchmarks are shaped and driven by the stakeholders we serve and helps to move the entire industry closer to our shared vision of sustainable real assets.
April – November 2020: Internal review and gap analysis between the most important industry standards and the Assessments. This involved:
- Mapping ESG topics and metrics covered by other reporting standards and frameworks relevant to our stakeholders;
- Identifying areas of potential alignment between those topics and our Assessment;
- Reviewing and analysing the current responses to all indicators;
- Reviewing feedback provided by participants;
- Reviewing which indicators and metrics were of limited analytical value or of limited interest to investors, and evaluating whether these would be kept or amended.
October 2020 – December 2020: Engagement with our governance groups, the Infrastructure Advisory Board and the Infrastructure Benchmark Committee, to discuss the proposed changes and to generate further input into the Assessments.
December 2020: Incorporating the final comments and publishing the pre-release of the 2021 Infrastructure Fund and Asset Assessments.
Mindful of how the GRESB Infrastructure Assessments have developed over the last five years, changes this year are incremental, and focused on ensuring that the Assessments are fit for purpose and ready to support the move to a greater focus on performance over the next few years. The Resilience Module, which was previously optional, has been integrated in the Management Components of the Fund and Asset Assessments and is aligned with TCFD reporting. New metrics have been added to the Asset Performance Component based on alignment with other frameworks and input from stakeholders. A Development Component will be added to the 2021 Asset Assessment, to enable better reporting and benchmarking for assets (projects) in development (in design or construction). This component will be released in February 2021.
The Fund Assessment will still consist of a Management Component only, with the scores of the fund’s underlying assets informing the fund’s performance score. The Asset Assessment will comprise a Management, Performance and Development Component.
The 2021 Assessment changes will provide further alignment with external frameworks, enable us to enhance our analytical tools and support our efforts to improve the quality of the ESG data available to the industry.
The Fund Assessment has been reviewed and the Resilience Module has been integrated. As in 2020, the Fund Assessment will consist of a Management Component, called the Management Component – Infrastructure Fund, which is aligned to the Asset Assessment’s Management Component – Infrastructure Asset. The Performance Component – Infrastructure Fund will simply comprise the Asset Assessments for the underlying assets. The Management Component – Infrastructure Fund consists of five aspects:
- Risk Management
- Stakeholder Engagement
Changes Relating to Content
New indicators have been added in the Risk Management aspect as part of the Resilience integration. These new indicators will not be scored in 2020. Two indicators in the Leadership aspect have been adapted to suit the Resilience integration. For alignment reasons, some metrics have been added, changed or removed.
Fund Score Names
Funds completing the Management Component – Infrastructure Fund will obtain a Management Component Score – Infrastructure Fund. If more than 25% of their underlying assets complete both the Asset Management and Performance or Development Components, the average aggregated GRESB Scores for those assets will provide the Performance Component Score for the Infrastructure Fund.
The Resilience Module has also been integrated into the Asset Assessment’s Management Component. As in the 2020 Assessments, the Management Component will focus on management and processes and be pitched at the organizational level. The Performance Component will focus on measuring performance, include performance indicators and certifications and be pitched at the asset level. The new Development Component (to be released in February 2021) will cover the performance of assets under development. The Management Component is suitable for any type of infrastructure company, asset and investment strategy. It is validated, scored and peer-benchmarked using the globally recognized GRESB methodology, and can be completed individually or in combination with the Performance or Development Components.
The Management Component – Infrastructure Asset consists of five aspects. The aspects align with the Fund Assessment;
- Risk Management
- Stakeholder Engagement
Changes relating to content
Several indicators were amended, from slight name changes, added or removed metrics, to changes to the structure of indicators. New indicators were added to the Risk Management aspect as part of the Resilience integration. These new indicators will not be scored in 2021.
The Performance Component – Infrastructure Asset comprises twelve aspects:
- Output & Impact
- Greenhouse Gas Emissions
- Air Pollution
- Biodiversity & Habitat
- Health & Safety
- Certifications & Awards
Changes relating to content
As part of the process to score performance in addition to transparency, the aspect Output & Impact has been made mandatory for any assets completing the Performance Component. This enables GRESB to provide intensity metrics for the quantitative indicators in the Performance Component.
New metrics have been added to some of the indicators to align with external frameworks. None of the new metrics are scored.
The 2021 Infrastructure Fund and Asset Assessments are available in pre-release versions here. While we do not anticipate making any material changes, we reserve the right to make modifications prior to the official start of the 2021 reporting period on April 1 and the official release of the 2021 Infrastructure Assessment. We will publicly announce any such modifications.
The Development Component for the Infrastructure Asset Assessment will be pre-released in February.