The GRESB Standards part 1: How they evolve and what’s in store for 2025 | The Pulse by GRESB

In this episode of The Pulse by GRESB, find part one of our two-part series on the evolving GRESB Standards for 2025 and beyond. Our speakers provide critical insights to help you prepare for the upcoming reporting year. Discover the key updates shaping the future of Real Estate and Infrastructure Standards. Watch the episode, and listen to part 2 of the conversation, featuring:

Can’t listen? Read the full transcript below. Please note that edits have been made for readability.

Sarah: Hi, I am Sarah Welton, the Director of the GRESB Foundation. As some of you may know, the Foundation is the non profit organization that owns and manages the GRESB standards. The Foundation is governed by the Foundation Board, which also sets the strategic direction for the standards. I am here with a couple of my colleagues who manage the standards development process for the Real Estate and Infrastructure Standards: Charles van Thiel and joss blamire. Charles and Joss, could you say a bit about yourselves and your roles?

Charles: Hey Sarah, thanks for having me, and hi to everyone listening in. My name is Charles van Thiel, I’m Director of Real Estate Standards at GRESB, and part of my responsibilities within GRESB is to work in close collaboration with the Real Estate Standards Committee, or the RESC, a committee being responsible for maintaining and developing the Real Estate Standard over time. This predominantly includes the development of the actual methodology underpinning the Real Estate Standard, such as indicators, metrics, and scoring logic. Looking forward to this conversation.

Joss: Hello everyone, I’m Joss Blamire. Hello Charles, hello Sarah, hello listeners. You can think of the role I have as broadly the equivalent to Charles in how he’s described the development process for the standards on real estate. However, I cover our infrastructure members and the development process for the standards on that business line.

Sarah: Thanks, Joss. While I have you, Joss, can you give us a brief overview of the GRESB standards development process?

Joss: Absolutely, the standards development process is very intentionally and entirely member driven and ultimately member led. So Charles and I act as secretariats to technical committees for real estate and infrastructure to help drive the discussion and the development of those standards. Ultimately the updates we make year on year are entirely up to the industry itself. So we are entirely member driven. We are by industry for industry. And that process is one that starts out, broadly speaking, by us engaging with the market in many different ways. We speak to the market, we speak to our clients and our members almost on a daily basis and those members report to us and we take in a huge amount of feedback around what’s working in the standards, what needs to change, and generally what the sector are feeling about the development of ESG that we want to ultimately reflect in our standards updates every year. And that then goes through a formal process around prioritizing what we want to do on a yearly basis. So we formulate work plans around the updates on an annual basis. And we lead up every year with a set of updates that are published around October, November time, and they will feed into the assessments that you will see every April opening up in the GRESB portal.

Sarah: Thank you. Yeah, it’s really timely to say that because I literally just got back from a NAREIT conference where I was able to meet with several of our members, as well as industry associations. So, yeah, exactly what you said. We really take what our members say seriously, and we report back into the standards committees and the foundation board. Charles, could you speak at a high level to what the 2025 Real Estate Standard Updates consist of?

Charles: Absolutely. So, as just mentioned, we recently shared with the wider industry a document called the 2025 Standards Updates for Real Estate. It’s a document that we publish every year and is generally expected by many industry members that essentially provides key information with regards to what is coming the year after. This year, there’s a few things I’d like to highlight for you to keep in mind with this release. First of all, the 2025 Standards Updates remain fully consistent with the long term goals by the GRESB Foundation. We know this is very important since it is the GRESB Foundation composed of industry representatives who sets the tone and direction of travel for the GRESB Standards over time.

This means that strategic objectives such as more focused on operational performance and more scoring differentiation among participants remain the ultimate goals. While doing so, the standards updates also commit to short term stability in the assessment results, to allow for a better and smoother transition to more impact in the future.

Another key focus has also been to provide more quantitative risk measures to the industry so that participants are better equipped to, one, properly anticipate the impact of changes on their score, two, communicate this upfront with their internal or external stakeholders if needed, and when possible, three, mitigate this impact by taking actions much earlier on.

Last but not least, the 2025 updates also offer a lot more insights into multi year process for addressing and developing key ESG topics, whether these are new, such as, let’s say, biodiversity, or not so new, but simply very material, such as building certifications. So all in all, through these updates, the wider industry is benefiting from a lot more visibility with regards to what’s coming their way in 2025, already 2026, and even to some extent 2027.

Sarah: Thanks. Again, that’s important to point out that it’s providing that transparency, because at its essence, GRESB is intended to establish a transparent communication between asset managers and investors. So again, allowing those managers to anticipate the impact, as you said. And communicate with those stakeholders who are often investors and then take action to improve year over year.
So that’s really helpful. You spoke a bit about impact. Could you go into a little bit more about what participants should expect impacting their scores, in the coming years?

Charles: Happy to Sarah, that’s a good question. And really a key focus when it comes to 2025 is to minimize impact. And after the release of the 2024 GRESB results, the GRESB Foundation considered minimizing impact on scores on the real estate side as a short term need but also necessary to ensure a smoother transition to more impact in 2026 and beyond. In other words, it gives participants sufficient time to properly anticipate the impact in 2026, which we expect will be more significant to obviously remain consistent with the direction of travel set by the Foundation. And to allow for a smooth transition between 2025 where the impact is minimized, and 2026, where the impact is expected, GRESB is working towards providing, already in 2025, a new type of insight to participant members about their expected impact on 2026 scores, which we call simulated score.

A simulated score is essentially a preliminary indication of how a reporting entity would perform in a GRESB assessment, considering that we anticipate future updates in the standards methodology. In other words, it offers insight into future potential performance, helping participants anticipate future results based on new assessment standards. Also very important to mention here, that the exact definition and especially its technical feasibility is still a work in progress as we speak internally, but these are certainly the intentions.

Sarah: That’s helpful. Yeah, again, we’re trying to facilitate that conversation and provide transparency essentially, to help our participants continue to make progress around the things that are new, potentially, or just material or important. Joss, similarly, I would love to hear what you see as the standard changes for 2025 on the infrastructure side.

Joss: Thank you, Sarah. Yeah, we’re really excited about the updates for 2025 for GRESB infrastructure. Exactly the same way as real estate, we’ve published a very detailed documentation of all of the updates that’s now available on our website. But I would summarize in kind of three broad themes this year. The first one would be introducing data coverage and ramping up data quality in the infrastructure assessments. So for the first time ever, we will ask participants not only to report performance data, things like energy, water, waste, and GHG, but actually to report the levels of data coverage. So how complete is the data set that they’re providing? And that’s critical for users of the data. So fund managers and investors will be able to understand exactly how much of a picture of that ESG data they’re looking at. And that really helps for reporting purposes and management purposes as well. Secondly, we are leading on Net Zero and GHG. So we’re going to be introducing a lot more detailed information on Net Zero target setting next year. We’re going to be displaying an asset’s performance against its own Net Zero ambitions for the first time next year. And we’re also going to be increasing the consistency around GHG data in general across Scopes 1, 2, and 3.

And the final message I would have around the changes is we are focused on simplification and reducing reporting burden. So we’ve really listened to the sector here. We’ve gone through a very structured process this year to look across the entire content of all of our infrastructure assessments. We are removing outdated, duplicative, or inconsistent information within the standards. And the end result and conclusion of that will be 150 less data fields to report to and 10 indicators being removed across the assessments as well. So we will hopefully lighten the load in terms of the content you’ll be responding to, but in fact increasing the value add of the standards as well.

Sarah: Yeah, that’s a great point that hasn’t come up yet is that reporting burden. And again, highlighting that that is one of our ambitions is to not sort of add to the load, but allow the data that we collect to be more informative and more useful for the sustainability reporting. Thank you, Joss, and thank you again, Charles. I appreciate both of you taking the time to talk through the 2025 standards changes. I would like to invite our listeners to tune in to the second part of this conversation, a follow up episode where we discuss how GRESB members can expect to see the standards evolve beyond 2025.

In that episode, we will also discuss the important topic of scoring changes in particular for infrastructure participants. A big thank you to our marketing and communication team for producing this episode and to all of you for tuning in.