Transition Risk Report FAQ

General

• What exactly is transition risk?

  Transition risk is broadly defined as those risks that arise as a result of the global transition toward a low-carbon economy. The Task Force on Climate-related Financial Disclosures (TCFD) delineates transition risk into four categories: policy and legal; technology; market; and reputation. Each category can be of greater or lesser importance depending on the sector under consideration. In the case of real estate management, policy risk is generally considered to be the predominant transition risk to an asset or portfolio.

• Who is the Transition Risk Report relevant to?

  The Transition Risk Report is currently available to GRESB Real Estate Participant Members that completed the GRESB Real Estate Assessment.

• How do I purchase and access the Transition Risk Report?

  You can purchase a Transition Risk Report directly in the GRESB Portal by following the step by step process on this page: https://www.gresb.com/nl-en/get-your-transition-risk-report/

• How long will the report be valid for?

  GRESB Real Estate Participants who purchase the Transition Risk Report will have unlimited access to the relevant year’s report through the GRESB Portal. If you purchase a report in February, it will be populated with last year’s data. When the GRESB Results are released in the fall, you will automatically receive the updated version of the Transition Risk Report.

• Do GRESB Investor Members have access to the Transition Risk Report?

  As of November 2023 non-listed investors can request access to managers’ Transition Risk Report.

  As it is the case for the GRESB assessments, as a participating entity, you need to give your explicit consent for GRESB Investor Members, or Fund Managers, to see your data and TRR Reports.

  By engaging with managers on transition risk, investors can future-proof their portfolio and receive additional timely insights to inform their investment decisions.

  In addition to streamlining access to these insights, this new process also enables investors to express their interest in viewing the reports to managers who may not have purchased the product(s) yet.

  Express of interest requests can be accepted only after the purchase of the product. You can always decline an Express of interest request.

  For more information, please have a look at the investor access rights page here.

• I am not a GRESB Member. Can I purchase a report?

  Currently, the Transition Risk Report is only available for Participants of the GRESB Real Estate Assessment. The report may become available for non-Participants in the future.

Content

• What data is used for my Transition Risk Report?

  The Transition Risk Report is built from asset-level data reported by Participants as part of the GRESB Real Estate Assessment. Where necessary, the reports are also complemented by estimations using GRESB asset-level dataset. The report also makes use of CRREM’s global decarbonization pathways.

• How does GRESB calculate the greenhouse gas emissions intensity of my portfolio?

  The GHG emissions of the portfolio are calculated using the location-based approach. 

• How does GRESB account for country-specific differences?

  Both the CRREM pathways as well as the bottom-up performance aggregations are property type and country specific.

• How are GHG offsets and purchased renewable energy factored into the report?

  GHG offsets as well as the purchase of off-site renewable energy are not factored into the assessment of transition risk.

• My portfolio has several CapEx projects planned with the purpose of increasing the energy efficiency of my portfolio. How is this accounted for in the output?

  The current version of the Transition Risk Report provides an assessment based on a do-nothing scenario from the participant’s side. Any future plans for improving the efficiency of the assets will be reflected in future versions of the Transition Risk Report, once the energy reductions have materialized.

• The Transition Risk Report is based on a do-nothing scenario. Why is my portfolio performance projection decreasing over time?

  The Transition Risk Report uses CRREM’s forward-looking GHG emission factors, which have built in assumptions for local grid decarbonization.

• Net Zero Initiatives

  Recently, there has been a massive increase in net zero commitments – coming from nations, coalitions of financial institutions and real estate industry bodies, among others. Important ones of note for the real estate sector include the IIGCC’s Net Zero Investment Framework, the UN-convened Net-Zero Asset Owner Alliance’s Inaugural 2025 Target Setting Protocol, the BBP Climate Commitment (and associated Net Zero Carbon Pathway Framework) and the WGBC’s Net Zero Carbon Buildings Commitment.

  While commitment is a necessary first step, much focus has now been rightly shifted toward execution, and financial actors and real estate operators alike are in need of credible tools and standards that are able to put their assets and portfolios into the context of these high-level commitments.

• Climate-Related Disclosures

  As climate-related risks (both transition and physical) become increasingly recognized as material factors for consideration in financial decision-making and planning, global standard-setting institutions, financial institutions and even regulatory authorities are looking to the TCFD as the basis for climate-related reporting. The TCFD recommends the disclosure of scenario analysis exercises to be used in the contextualization of the resilience of an organization’s strategy to climate-related issues.

  As the management and disclosure of transition risks become mainstream, the estimation of such risks at the asset and portfolio level will become a key aspect of risk identification and assessment processes. Such capabilities will serve as the basis for TCFD-aligned disclosures and other regulatory requirements, such as SFDR.