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The GRESB real estate assessment
2023 GRESB real estate assessment results
Which companies led the 2023 assessment in Oceania?
The GRESB real estate benchmark
Are there alternatives to GRESB?
What is GRESB?
GRESB (Global Real Estate Sustainability Benchmark) is a mission-driven and investor-led organization that provides actionable and transparent environmental, social, and governance (ESG) data to financial markets. Established in 2009, GRESB has become a leading ESG benchmark for real estate and infrastructure investments across the world. It offers standardized and validated data to assess the sustainability performance of real estate assets and portfolios.
GRESB evaluates the sustainability performance of real estate and infrastructure portfolios and assets, providing standardized and validated ESG data to the capital markets. The GRESB assessments are guided by what investors and the industry consider to be material issues in the sustainability performance of asset investments and are aligned with international reporting frameworks, goals, and emerging regulations.
As well as making a material difference to the operations of commercial buildings and other large buildings, building owners can report on how well they are performing across a variety of metrics to their investors and other stakeholders. GRESB has a much wider scope than initiatives such as NABERS Ratings (National Australian Built Environment Rating System), EPC scores for commercial property, and Green Star. GRESB has also expanded its scope from the built environment to include roads, railways, electricity distribution and communication systems.
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The GRESB Real Estate Assessment
The GRESB Real Estate Assessment is an annual benchmarking exercise that evaluates the Environmental, Social, and Governance (ESG) performance of real estate assets worldwide. It offers a comprehensive framework for investors and property companies to assess their sustainability practices, identify areas for improvement, and measure their performance against peers. The assessment covers a wide range of sustainability topics, including energy consumption, carbon emissions, water usage, waste management, and social responsibility practices.
The GRESB Real Estate Assessment is structured around two main components:
- Management & Policy: This component examines the organization's ESG policies, management systems, stakeholder engagement practices, and ESG reporting. It assesses the integration of sustainability into corporate governance and the strategic decision-making process.
- Performance Indicators: This section evaluates the actual environmental performance of the real estate assets, including energy use, GHG emissions, water consumption, waste management, and building certifications. It also looks at the social aspects, such as tenant engagement and community impact.
Participants receive a GRESB Score, which reflects their overall ESG performance. This score allows for comparison among peers and helps to attract investors who are increasingly considering sustainability criteria in their investment decisions. The GRESB Assessment has gained significant traction in the real estate industry as a tool for driving sustainability improvements and transparency in ESG reporting.
The GRESB Real Estate Assessment is part of GRESB's broader efforts to enhance sustainable investment across real asset sectors, providing a standardized and validated approach to measuring sustainability performance. It serves as a critical tool for investors, asset managers, and other stakeholders to understand and mitigate ESG risks, capitalize on opportunities, and contribute to the global sustainability agenda.
In 2023, GRESB assessed a total of 1,820 real estate entities, 709 infrastructure assets/funds, and 157 mortgage portfolios, marking a significant engagement across these sectors.
2023 GRESB Real Estate Assessment Results
The 2023 GRESB benchmark AU$11.32 trillion (US$7.2tn) of gross asset value across 169,173 assets, 4,323 of those assets in Oceania. Oceania’s 143 participating entities had a gross asset value of AU$635 billion (US$404 billion).
Which companies led the 2023 Assessment in Oceania?
GRESB Global Sector Leaders – Oceania
Standing Investments Benchmark
- Retail: Australian Prime Property Fund Retail, Lendlease
- Retail: Lendlease Global Commercial Real Estate Investment Trust, Lendlease Global Commercial Trust Management Pty Ltd
- Office: Brisbane Square Wholesale Fund (BSWF), Charter Hall
- Healthcare: Vital Healthcare Property Trust, Vital Healthcare Properties Management Limited
Development Benchmark
- Office: Charter Hall Prime Office Fund (CPOF), Charter Hall
- Office: GPT Wholesale Office Fund, The GPT Group
- Diversified – Office/Industrial: ISPT Core Fund, ISPT
- Residential: Scape Australia JV1, Scape Australia Management
- Residential: Scape Australia JV2, Scape Australia Management
- Retail: Scentre Group
- Industrial: The GPT Group
- Healthcare: Vital Healthcare Property Trust, Vital Healthcare Properties Management Limited
- Healthcare: Dexus Healthcare Property Fund, Dexus
GRESB Regional Sector Leaders
Standing Investments Benchmark
- Diversified – Office/Industrial: Australian Core Enhanced Fund (ACE), EG
- Retail: Australian Prime Property Fund Retail, Lendlease
- Office: Brisbane Square Wholesale Fund (BSWF), Charter Hall
- Diversified – Office/Retail: Cbus Property
- Diversified – Office/Retail: Dexus Wholesale Property Fund, Dexus
- Industrial: Frasers Property Industrial Australia Pty Limited
- Diversified – Office/Industrial: Goodman Australia Partnership (GAP), Goodman Group
- Diversified – Office/Industrial: Growthpoint Properties Australia, Growthpoint
- Diversified – Office/Retail: ISPT Core Fund, ISPT
- Residential: Keyton Trust (formerly Lendlease Retirement Living Trust), Lendlease
- Retail: Charter Hall Retail REIT (CQR), Charter Hall
Development Benchmark
- Office: Charter Hall Prime Office Fund (CPOF), Charter Hall
- Industrial: Dexus Wholesale Property Fund, Dexus
- Office: GPT Wholesale Office Fund, The GPT Group
- Residential: Scape Australia JV1, Scape Australia Management
- Residential: Scape Australia JV2, Scape Australia Management
- Industrial: The GPT Group
Find the full list for the 2023 Real Estate Assessment Results.
Intimidated by the data?
Collecting that data, particularly at the asset level, can be complex and time consuming. Each different piece of equipment produces data in its own proprietary format. That needs to be extracted and then normalised to make reporting easier. For many organisations, this can be very challenging unless they have a building management platform that can extract and normalise that data so it can transform into knowledge. This is where CIM's PEAK Platform can be a powerful ally. Its ability to make that asset level data accessible can greatly simplify the provision of data for GRESB assessments.
As explained by GRESB's Head of Asia Pacific, Ruben Langbroek, in our recent webinar on 'The roadmap to Net Zero for commercial property', understanding the potential of your building through adequate data coverage is a key foundational element. Ruben explains:
"If you can measure it, you can manage it and if you can manage it, you can improve it." We've seen that by rewarding data coverage of portfolios in terms of operational performance metrics, energy consumption, greenhouse gas emissions across different scopes, water waste - that indeed the building owners and landlords assessing have been able to improve the performance of their assets just by understanding what's happening, both within the base building as well as in tenant spaces.
But of course then you're not talking just about environmental performance but actually about stakeholder engagement. So how can you collaborate with different tenants to make sure that a) they understand your own ambitions or objectives and then b) to make sure they are aligned and help them with sustainable fit out or fit out ratings by NABERS or anyone else, the use of renewables if possible and just addressing any other emission concerns."
The GRESB Real Estate Benchmarks
GRESB real estate assessments powers two ESG industry benchmarks that GRESB releases annually: Real Estate Standing Investments Benchmark and Real Estate Development Benchmark (they also manage two for infrastructure).
The GRESB Real Estate Standing Investments Benchmark is for portfolios which contain buildings that are currently in operation whereas the GRESB Development Benchmark is aimed at portfolios with new constructions that have yet to be completed and significant renovation projects.
These benchmarks are not created and managed in isolation. They are aligned with globally recognised reporting standards including GRI, PRI, SASB, DJSI, TCFD recommendations, the Paris Climate Agreement, United Nations (UN) SDGs, region and country specific disclosure guidelines and regulations.
As well conducting assessments and providing benchmark information, GRESB provides guidance that explains what each indicator means, how to respond to the surveys and the ability to have individual consultations to review responses and discuss any questions.
The assessment process
Completing a GRESB assessment involves several steps. Here is a general outline of the process:
- Register interest: Register your interest to participate in the GRESB assessment through their website.
- Gather and organise data: Identify the relevant data and information required for the assessment, such as energy consumption, greenhouse gas emissions, water usage, certifications and tenant engagement activities.
- Complete the questionnaire: Access the assessment questionnaire through the online portal provided by GRESB.
- Submit the assessment: Submit the questionnaire within the April 1 – July 1 timeline, through the online portal.
- Verify data: Work with GRESB to review and validate the accuracy of the data provided in the questionnaire
- Receive scores and benchmarking reports: Once the assessment is reviewed and verified, GRESB will calculate your GRESB Score, GRESB Rating and provide the benchmarking reports in October of each year. Each component of the assessment (management, performance and development) carries its own score, which is factored into the entity’s GRESB score and GRESB rating.
The GRESB score
The GRESB score is derived from an annual assessment that evaluates the sustainability performance of real estate and infrastructure investments across the globe. This score is expressed as a percentage, with 100% representing the highest possible level of sustainability performance. The assessment covers a wide array of ESG aspects, including energy consumption, greenhouse gas emissions, water usage, waste management, and stakeholder engagement, among others.
Components of the GRESB Score
The GRESB assessment is structured around two main dimensions:
- Management and Policy: This dimension assesses the organization's ESG strategy, policies, risk management, and stakeholder engagement practices. It provides insights into how sustainability is integrated into the corporate governance framework.
- Implementation and Measurement: This section evaluates the tangible actions taken to implement sustainability policies, including the efficiency of energy, water, and waste management practices at the asset level. It also measures the impact of these actions on the organization's overall sustainability performance.
The GRESB rating
The GRESB (Global Real Estate Sustainability Benchmark) rating is a quintile rating system that categorizes participating entities based on their ESG performance as assessed in the GRESB survey. This rating ranges from one to five stars, with five stars denoting entities that are leading the charge in implementing effective sustainability practices. The GRESB rating is designed to provide investors, stakeholders, and the market at large with a clear, relative positioning of real estate entities' sustainability performance.
The foundation of the GRESB rating lies in the GRESB score, which is an absolute measure of an entity's sustainability performance across various ESG criteria. This score is calculated based on data submitted by entities, covering aspects such as energy consumption, water usage, waste management, and policies on sustainability and stakeholder engagement. The GRESB score is presented as a percentage, with 100% representing the pinnacle of sustainability performance.
The GRESB rating, on the other hand, is a relative measure. It is determined by comparing an entity's GRESB score against those of its peers within the same investment type and region. The rating system divides entities into quintiles based on their scores, with the top 20% receiving a five-star rating, the next 20% receiving four stars, and so forth. This method ensures that the rating not only reflects an entity's individual ESG achievements but also its performance in the context of the broader real estate industry.
Why GRESB is important
Participation in GRESB provides organizations with several benefits:
- Benchmarking: GRESB offers a platform for benchmarking the sustainability performance of real estate investments, providing participants with a clear understanding of their standing against peers and industry best practices.
- Investor Relations: By participating in GRESB, companies and funds can communicate their sustainability achievements and commitments to investors in a structured and globally recognized format. This transparency can enhance investor confidence and attract ESG-focused investments.
- Performance Improvement: The assessment process itself encourages companies to identify areas for improvement in their sustainability strategy and practices. GRESB provides feedback and resources to help participants enhance their ESG performance over time.
- Market Recognition: Achieving a high GRESB score or demonstrating year-on-year improvement can increase a company's visibility and reputation in the market as a leader in sustainability. This can contribute to competitive advantage and stakeholder engagement.
- Regulatory Compliance and Reporting: GRESB aligns with international sustainability reporting frameworks and can help participants navigate the complex landscape of ESG regulations and voluntary reporting standards.
Are there alternatives to GRESB?
When it comes to sustainability assessment and benchmarking in the real estate industry, GRESB has established itself as a widely recognized and influential framework. However, there are a growing number of other sustainability assessment tools and frameworks.
- LEED: LEED is a green building certification program developed by the US Green Building Council. It provides a comprehensive rating system for the design, construction and operation of sustainable buildings. For more information on LEED, check out our blog article: “The LEED Rating System Explained”.
- BREEAM: BREEAM is another widely recognised sustainability assessment method for buildings. It is widely used in Europe and assesses various aspects of building performance, including energy efficiency, water usage, waste management and materials selection. For more information on BREEAM, check out our article: “The BREEAM Rating System Explained”.
- NABERS: NABERS is an Australian government initiative that rates the environmental performance of individual buildings. It assesses factors such as energy efficiency, water usage, waste management and indoor environment quality. It is widely recognised by Australian investors, owners and tenants when evaluating building sustainability, and is gaining a foothold in the UK property market. For more information on NABERS, check out our article: “Everything you need to know about NABERS”.
- CDP: CDP is a global non-profit organisation that focuses on collecting and disclosing environmental data. WHile it is not specific to the real estate sector, CDP provides a platform for companies to report their environmental impact, including carbon emissions, water usage and climate change related risks. For more information on the CDP framework, check out our article: “Navigating ESG reporting frameworks: TCFD, SASB and CDP explained for commercial property owners”.
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