Last week marked the September week many in the real estate industry have been eagerly awaiting – the release of GRESB 2018 results.
Last week Carbon Credentials attended the launch of the global Real Estate results for 2018. This event celebrated the companies that are leading in their sector and explored some of the key trends to emerge from this year’s assessment.
How we helped our clients in 2018
Carbon Credentials has a history of supporting its clients to deliver market-leading, all-encompassing sustainability programmes and have observed how these clients are generally recognised and rewarded for their efforts through performance in GRESB . With more and more investors now looking to participation in GRESB as well as fund star ratings in GRESB submission, GRESB has created a clear link between sustainability performance and fund prosperity. For this reason and due to the fact that the assessment develops alongside changes in the market, we recognise its importance within the real estate sector to drive progress in sustainability. We’re proud of what our clients have achieved this year and are privileged to have worked with some of the most progressive sustainability teams in European Real Estate to achieve the following:
- 37 fund submissions in total
- 93 green stars across 10 peer groups
- 4 funds were supported in their first ever submissions
- A first-timer achieved a score of 70 (3 green stars)
- 4 funds achieved 5 green star ratings
- 1 fund maintained its Sector Leadership status
So what are the headlines?
2018 saw 903 participants submit to the GRESB Real Estate assessment with over 79,000 assets and $3.5 trillion in gross asset value.
Overall, it would appear that the real estate sector is improving its sustainability performance – the global average this year increased 5 points to 68/100. This increase of 5 points in score is even more noteworthy given the assessment becomes more difficult each year. Additionally, first-time participants achieved a higher average score of 56 this year, suggesting that there continues to be less excuse for poor performance on sustainability and funds that may not be responding to GRESB have already implemented sustainability initiatives across GRESB’s 7 Aspects.
- Globally, Australasia continues to lead the pack with an average score of 76
- In Europe, the average score was 66
- Health and wellbeing will become part of the main assessment in 2019 with 2018 being it’s final year as a non-compulsory module
- Building Certifications was the aspect with the lowest average score, but still increased by 5 points on average versus 2017
- Management was the aspect with the highest average score, staying stable when compared to 2017
- Third party review of sustainability data is becoming mainstream for both energy and water
What do we expect to see in 2019 and beyond?
We expect to see an increase in the number of entities and funds participating in GRESB as institutional investors increasingly use data from GRESB in their decision making. Over the years we have seen the granularity of data included in the scorecards and benchmark reports increase, and we expect to see a similar trend in future, with more focus on asset-level performance.
In terms of general sustainability, we expect there to be several trends for the real estate sector in future that could be used to supplement the 2019 GRESB submission:
- The road to net-zero carbon
- At the results event this year, the World Green Building Council’s ‘Net Zero Carbon Buildings Commitment’ was applauded by GRESB . However GRESB also noted that currently 29% of entities don’t have long-term targets. Therefore we expect for more organisations to be setting targets in order to be in line with the commitment – only 2 out of 903 were net-zero this year. The panel at the event also highlighted that 60% of our building stock in 2050 already exists, therefore retrofitting and continuous building improvements continues to be important in sustainability best practice.
- Greater focus on UN Sustainable Development Goals
- The SDGs were highlighted during the 2018 results release and the distance we have to go to achieve them – particularly SDG 7 and 13. We believe this is a space to watch as the real estate sector begins to follow suit of other industries in integrating the goals into their sustainability strategies, and as assessments such as GRESB start to take note of those who do. Look out for our upcoming blog on the topic.
- Increasing efforts to engage with tenants
It was noted that attaining consumption data continues to be a challenge, especially in the UK. For this reason, we expect efforts to engage tenants to increase, with the objective of obtaining data for areas of the building that aren’t typically simple for landlords to obtain, such as tenanted areas, as well as for sites that are entirely indirectly managed. Carbon Credentials’ data managed services are collaborative programmes which help our clients get more and improved quality data through engaging with managing agents, suppliers, tenants and/or any other relevant stakeholders.
- Acknowledging health and wellbeing
Here at Carbon Credentials we have been working hard in the Health and Wellbeing space (led by our Director of Innovation, Sam Carson) and we now anticipate this to be firmly placed on the agendas of companies. Health and Wellbeing will become a new compulsory aspect as of 2019 so we envisage more attention being paid to metrics such as employee and tenant wellbeing, internal air quality, surveys and behaviour.
“We are proud to have supported the many prestigious clients in the real estate industry who are paving the way to sustainability leadership. We are finding that benchmarking schemes such as GRESB are an important driver for sustainability best practice and Carbon Credentials support participation in these assessments to facilitate consistent and transparent comparisons of initiatives across the industry and drive improved performance.
Industry-driven frameworks such as the GRESB benchmark are facilitating our mission and purpose of enabling the transition to a low carbon economy and we are looking forward to seeing how this benchmark develops and what other sectors can learn from its successes and challenges” Paul Lewis CEO Carbon Credentials
We have already begun working with many of our clients to use their results from this year to make sustainability improvements both at entity and fund level. We welcome and value the insight that GRESB brings to companies in order to drive sustainability improvements and a support the transition to a low-carbon economy. If you would like to learn more or speak to a member of our team about how we are best positioned to help you, please get in touch with email@example.com or myself at Francesca.firstname.lastname@example.org.
More on GRESB from our clients: