In the ever-urgent pursuit of a sustainable future, real estate and infrastructure, collectively referred to as “real assets,” stand as the linchpin of our global transition to net zero. As the world grapples with the pressing need to curb carbon emissions and mitigate climate change, the role of these sectors in reshaping our built environment is paramount.
In early 2023, the GRESB Foundation Board unveiled an innovative and ambitious initiative: the Net Zero Technical Working Groups (NZTWG). These working groups were specifically crafted to delve deep into the challenges and opportunities posed by net-zero performance within the realm of real assets.
The significance of this endeavor cannot be overstated. GRESB has long been recognized as the global standard-bearer for Environmental, Social, and Governance (ESG) benchmarking within the real asset arena. With its comprehensive suite of standards, GRESB has played a pivotal role in steering the industry toward sustainability and responsible investing. However, the race to net zero presents a unique set of complexities and intricacies, demanding a fresh approach to standards development.
Mandate
The Real Estate NZTWG was convened to help the GRESB Real Estate Standards Committee (RESC) advance net zero within the GRESB Real Estate Standard by having industry professionals examine and detail the technicalities of key contentious topics regarding net zero in real estate. The Infrastructure NZTWG was convened to help the GRESB Infrastructure Standards Committee (ISC) understand how various components of net zero are addressed across the leading infrastructure and net-zero frameworks, as well as the alignment of their treatment across those frameworks.
Process and operating model
The NZTWGs ran from February through May 2023 and were overseen by Erik Landry, Director of Climate Change at GRESB, who acted as the Secretary to the Working Groups. To facilitate the work across topics and time zones, the members were split into Workstreams, with each workstream covering specific topics. Coordinated by the GRESB Secretariat, the NZTWGs convened for session meetings in which the workstreams presented their progress and elicited feedback from the full NZTWG membership. Between these session meetings, the individual workstreams met and carried out the research.
Findings
The process yielded two 100-page technical reports with unique recommendations for the Real Estate and Infrastructure Assessments:
Real Estate: The Real Estate NZTWG identified important issues regarding the applicability and efficacy of various elements of net-zero performance. Net-zero claims for real estate always include some combination of building performance and management actions. However, difficulties often lie in the best order or combination by which to improve specific performance or accounting metrics. Nevertheless, GRESB is uniquely positioned to advance the industry along each net-zero element, despite the challenges introduced by attempting to define what a credible net-zero transition looks like for all assets and entities everywhere.
Infrastructure: For infrastructure, the challenge of achieving net zero becomes even more pronounced. Diverse superclasses, classes, and a wide array of infrastructure assets defy easy categorization. This diversity complicates the derivation of “decarbonization pathways” and hampers relative performance comparisons. In the face of such diversity, the Working Group analyzed industry frameworks and identified avenues through which GRESB can incentivize better data collection, quality, and transparency. These improvements will establish a strong basis for more rigorous net–zero transitions by infrastructure assets and funds.
In conclusion, the Net Zero Technical Working Groups represent a pioneering approach in the quest for a sustainable future. By leveraging the expertise of industry professionals and experts, GRESB has embarked on a mission to redefine the standards that will underpin our journey to net zero. In doing so, it reaffirms its commitment to advancing the real asset industry and ensuring that the path to net zero is both legitimate and credible. As we dive deeper into the insights and findings of these working groups, it becomes abundantly clear that the real assets sector is poised to play a pivotal role in shaping a sustainable world, and GRESB is leading the way.
