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Actionable Environmental, Social and Governance (ESG) information for institutional real estate investors

Date: 19/03/2015
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Over the last decade, the green building movement has transformed the way buildings are designed, constructed, and operated; promoting best practices and superior performance. GBIG.org currently tracks over 110,000 green building certifications and hundreds of thousands more awards, disclosures, and case studies. Together, these green building activities paint a picture of a dynamic, global industry working to create better buildings to benefit people and the environment.

These projects have helped pave the way toward broad-based recognition that green buildings save energy, reduce operating costs, and provide superior comfort and experience for occupant.  In turn, study-after-study finds that green buildings are more desirable for occupants, creating the opportunity to attract preferred tenants while commanding premium rents and reducing vacancies. 
 
Investors have noticed.  Sophisticated institutional investors recognize that green buildings often represent superior real estate assets, and that information about environmental, social, and governance (ESG) performance is material to their decision-making.  However, many institutions do not regularly invest directly in properties, rather they use vehicles such as Real Estate Investment Trusts (REITs) or private equity funds to gain exposure to the property sector.  These investment vehicles are more than simply a collection of individual buildings.  Each brings a distinct investment strategy and set of governance and management practices.  The mixture of both portfolio- and asset-level attributes and performance make property funds a distinct unit of assessment and an important target for market transformation.    
 
GRESB was developed in response to the demand for sustainability data from institutional investors about property companies and private equity real estate funds.  GRESB integrates a range of information to understand fund-level management and performance, including governance, stakeholder engagement, and environmental performance indicators.  GRESB’s scoring and synthetic analytics provide investors with rich, actionable information about the ESG attributes of their entire property portfolios.  

In October 2014, GRESB merged with the Green Building Certification Institute (GBCI).  GBCI is best known as the certifying body for LEED® and, more recently, an expanding set of brands including WELL, PEER, and Sustainable Sites.  Following the merger, GRESB continues to operate from its headquarters in Amsterdam, while benefiting from GBCI’s expertise and global infrastructure.  GRESB maintains its focus on informing real estate investors with high quality, actionable information on ESG attributes and performance of global property portfolios. 
 
The GRESB process centers on its annual benchmark survey.  This assessment engages portfolio managers to share information on many aspects of ESG, including governance, stakeholder engagement, and operational performance.  Aggregating data on energy, water, and waste is one of the most important and challenging parts of the GRESB survey.  This year the submission process has been streamlined with new partnerships to automate the flow of data from property managers to GRESB.
 
thinkstep, formerly PE INTERNATIONAL has developed innovative new information technology that helps its clients efficiently aggregate data from multiple sources and transmit it automatically to GRESB.  This automated process reduces the complexity of combining complicated assets into the aggregated, portfolio-level view required by GRESB.  It saves time and helps GRESB provide high quality data to investors.  You can learn more about thinkstep’s support for GRESB respondents here.   
 
You can learn more about GRESB by participating in an upcoming training.  Events are scheduled for cities around the world, including Amsterdam, Melbourne, Paris, New York, Washington, DC, London, and SingaporeLearn more about how you can add GRESB to your professional toolkit.  

By Chris Pyke, COO GRESB