— THE GRESB RESILIENCE MODULE —
Evaluates how real estate and infrastructure companies and funds are preparing for potentially disruptive events and changing conditions, assessing long-term trends, and becoming more resilient over time.
The Module is an optional supplement to the GRESB Real Estate and Infrastructure Assessments.
What is the GRESB Resilience Module?
The GRESB Resilience Module has been developed in response to organizations that are developing a capacity to assess, manage and adapt in the face of social and environmental shocks and stressors. It is motivated by two key factors:
- To meet growing investor demand for information on resilience; and
- To increase access to information about strategies used by property and infrastructure companies to assess and manage risks from social and environmental shocks and stressors, including the impact of climate change.
The 2019 Resilience Module is organized in four sections broadly aligned with recommendations from the Task force on Climate-related Financial Disclosure:
- Leadership and Governance
- Risk Assessment
- Business Strategy
- Performance Metrics and Targets
The 10 indicators in the module will be supplemented by information from the core GRESB assessments to generate an overall Resilience score (e.g., Real Estate RO3.1, RO3.2 and Infrastructure Asset Assessment, MA1, PD1, RO1, and ME2).
Scope and Purpose
The Resilience Module seeks to provide investors with information needed to understand how real estate and infrastructure companies and funds are preparing for potentially disruptive events and changing conditions, assessing long-term trends, and becoming more resilient over time. The Module seeks to evaluate the capacity of organizations to assess and respond to risks and opportunities related to climate, environmental, social, economic, technological and geopolitical changes through asset resilience and the organization’s management capacity.
The Resilience Module does not attempt to assess or communicate specific risks to individual assets, such as homes or buildings. The Resilience Module provides a framework to report on the processes used to conduct such risk assessments and the results from these assessments. Stakeholders interested in asset-level risk assessment and management are referred to a growing number of tools such as those identified in the GRESB (2018) Special Report on Real Assets and Resilience.
The Resilience Module addresses two fundamental dimensions of climate risk and resilience identified by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) recommendations, including:
- Transition risk
- Physical risk
Transition risk is a set of vulnerabilities related to the ongoing shift to a low carbon economy necessary to achieve the goals of the United Nation Paris Agreement. This transition will create new opportunities for companies capable of providing low-carbon solutions, such as energy efficient buildings powered by renewable energy. This transition may also create new liabilities for companies reliant on inefficient, carbon-intensive technologies. Companies with these liabilities may be at risk from future regulation and competitive disadvantages (e.g., U.K. Minimum Energy Efficiency Standards for leased property).
Physical risk are associated with a myriad of shocks and stresses, such as those addressed by the global 100 Resilient Cities program. Resilience to these issues includes both preparation for changing conditions and short-term responses to disruptive shocks (e.g., fire, flood events) and chronic stresses (e.g., changing heating and cooling degree days, precipitation levels ).
While the Resilience Module has a primary focus on climate risk and resilience, it takes a broader perspective than TCFD. The Resilience Module provides opportunities to report and score other resilience-related factors beyond transition and physical climate risk. Notably, the Module provides indicators related to social resilience and physical security, categorized as Social risks. Improvements to the Real Estate and Infrastructure Assessments may allow these indicators to be removed from the Resilience Module after 2019.
For the purpose of 2019 reporting, the Resilience Module provides relevant, actionable information related to transition, physical, and social risks and opportunities facing real estate and infrastructure companies around the world.
Benefits of Participating
|Ability to respond to investor attention on resilience and standout in a competitive fundraising environment.||Access to business intelligence on best practices in resilience-promoting actions among companies and funds.|
|Clearer picture of your capacity to assess, manage and adapt in the face of social and environmental shocks and stressors and how this capacity compares against your peers.||Improved ability to identify a broader range of risks and opportunities for value creation in your portfolio and assets.
|Greater knowledge of investor needs and perspectives to improve your investor engagement.||Ability to report validated performance information on resilience to your stakeholders.|
|Reduced time and effort needed to respond to ad-hoc requests relating to sustainability issues.||Recognition that you have taken a significant step towards leadership on ESG issues.|
GRESB Investor Members
The Resilience Module provides investors with information needed to understand how real estate and infrastructure companies and funds are preparing for potentially disruptive events and changing conditions, assessing long-term trends, and becoming more resilient over time. More than 100 pension funds and their fiduciaries use GRESB data and analytical tools in their investment management and engagement process.
Assessment Process and Results
The Assessment Portal opens on April 1 each year. GRESB participants start with the GRESB Real Estate Assessment or the GRESB Infrastructure Assessment and then opt-in to the Resilience Module. The Module appears as a separate section in the GRESB Portal “Navigation Bar” and participation is voluntary.
Once all Assessments have been submitted and the Assessment Portal has closed, GRESB begins the process of validating and scoring the Resilience responses.
The Assessment Results are launched in October and participants receive an individual GRESB Resilience Scorecard for each reporting entity. This score will not have any impact on the entity’s GRESB Score in 2020.
Frequently Asked Questions
Can I participate in the Resilience Module without completing an Assessment?
Who will see the data that’s submitted?
Participants in the Resilience Module can control access to Module results via the GRESB Portal by checking a box to confirm whether they wish to share their Module results with their investors.
If a participant shares its Module results, these will appear as a separate section in that participant’s Scorecard and Benchmark Report. If a participant does not share its results, Resilience Module results will not appear in the Scorecard and Benchmark Report. This selection can be changed by contacting GRESB.
Aggregated information from all Resilience Module participants will be used as the basis for a market report and related research.
Can I participate in the Module with multiple assets and funds?
Yes, it is possible, and you will need to complete the Resilience Module for each asset or fund. First, register as an individual via the GRESB Portal. Once you have registered, you will be able to add individual assets and funds to the GRESB Portal and complete the Module on behalf of each of those entities.
How will the Resilience Module develop over time?
The GRESB Resilience Module is designed as a three-year effort to improve reporting and benchmarking for climate risk and resilience by property and infrastructure companies. The 2019 Module makes incremental improvements in reporting indicators based on first-year experience with an emphasis on increasing alignment with recommendations from the TCFD. Changes to the 2019 Module also attempt to provide more quantitative and objective indicators that can be more easily compared across participants. After 2020, selected climate risk and resilience indicators are anticipated to migrate into the core Real Estate and Infrastructure Assessments.
- 2018: An initial high-level screen intended to raise awareness, motivate internal discussion, and provide a basic level of transparency for investors. Results from 2018 Real Estate and Infrastructure Assessments are available in the GRESB (2018) report Real Assets & Resilience.
- 2019: Build upon the high-level criteria with more rigor with respect to the contents and quality of evidence. Increase alignment with TCFD recommendations. Open Resilience Module for participation by Infrastructure Funds.
- 2020: Increase stringency of validation, test additional performance indicators, and, where appropriate, align indicators and evidence requirements with industry standards and guidelines. This is the last year a distinct Resilience Module will be offered.
- 2021: Migrate selected indicators to the core GRESB assessments. Climate risk and resilience will be scored and reported as part of the core GRESB assessments.