With the GRESB 2018 Real Estate Assessment soon to get started in earnest (pre-release out on Thursday 15th February), I have written this blog to quickly remind ourselves of the what, why, when and how of GRESB.
For those who are new to GRESB, my hope is that this blog serves as a useful introduction. For ‘old hands’, I hope that it’s a handy reminder of key aspects, which can be easy to lose sight of when busy working away at the coal face.
What and Why
In their own words, GRESB is “…an investor-driven organization that is transforming the way we assess the environmental, social and governance (ESG) performance of real assets globally, including real estate portfolios and infrastructure assets.”
It is essentially an annual survey assessing the ESG-related policies, programmes and performance of real estate entities (listed and non-listed). Participating entities are awarded various ratings and scores, which are communicated to GRESB’s investor members. These outputs also provide participants with an understanding of their strengths and weaknesses, as well as a third-party performance benchmark that can be used in sustainability-related communications.
GRESB continues to dominate the ESG rating industry for commercial real estate, globally. In 2017, GRESB assessed 850 real estate entities, representing $3.7 trillion in gross asset value. Other key statistics from 2017:
- Participation increased 12% (759 to 850);
- Average score increased 5% (from 60% to 63%);
- Performance gap between listed and non-listed entities closed further (4% difference in 2017).
So, in conclusion, GRESB continues to grow in popularity and to be a key driver of sustainability performance improvement and reporting across the industry.
Furthermore, the industry’s understanding of the economic value of sustainability, and more specifically GRESB survey participation, continues to evolve. For example, a recent piece of research identified a premium on total returns of up to 3% between the highest and lowest GRESB scores (for non-listed European funds).
Key dates for the GRESB 2018 submission diary are as follows:
- February 15, 2018 – Pre-release of Real Estate Assessment
- March 1, 2018
- Release of Real Estate Assessment Reference Guide
- Release of Resilience and Health & Well-being Modules (including Assessment Reference Guides)
- April 1, 2018 – GRESB Portal opens
- June 8, 2018 – Response Check request deadline
- July 1, 2018 – Assessment deadline
- September 5, 2018 – Results day
Our [humble] top tips for a smooth journey through GRESB in 2018:
- Start [and aim to finish] early.
- If you responded last year, at the start of the process remind yourself what went well and less well during the 2017 submission – consider both the process and individual question responses.
- Review changes to the survey questions (available from 15th February) and the guidance/scoring document (available from 1st March), as soon as they are released. Review these changes in the context of your entity/entities and its/their ability to maintain/improve GRESB scores. These changes may also create possible logistical challenges regarding gathering the necessary evidence and data in time for survey completion – so the earlier the better!
- Engage and where necessary upskill people that will support you in delivering GRESB. Keep in regular touch with these people, particularly if they will be providing you with information.
- Remember that the survey process doesn’t necessarily end on the 1st July as you may be selected for enhanced validation of your response. Validation takes place from 15th June – 31st July, and so we recommend time is kept aside immediately after the survey in case you are selected.
- Automate data collection – Our propriety software, SIERA, delivered 55 GRESB submissions in 2017, helping clients to seamlessly acquire and report asset-level sustainability data into the GRESB portal.
- Seek external support / advice – Our team of sustainability consultants are experts in sustainability, real estate and [most relevantly] GRESB.
Interested in exploring our SIERA software and / or speaking with one of our consultants regarding your GRESB opportunities and challenges? Don’t hesitate to contact us today for a free consultation with one of our experts.
This article is written by Oli Pye, Associate Director at EVORA.
 Dirk Brounen (Tilburg University) and Maarten van der Spek, July 2017