With investors putting more and more value on sustainability of assets in the real estate world, the Global Real Estate Sustainability Benchmark (GRESB) is becoming a critical tool for remaining competitive.
But before diving in with GRESB, you’ll need to understand what your organization will need to get the full value out of it. Here are answers to some of the basic questions you might have about GRESB.
What exactly is GRESB?
For commercial real estate (CRE) businesses, GRESB is a reporting tool for providing environmental, social, and governance (ESG) data on their portfolios to investors.
GRESB was founded in 2009 by pension managers that recognized the industry lacked the tools for measuring the impact of ESG efforts on real estate portfolios. It has since become an industry-driven organization with more than 250 members that use that data to manage risk in their real estate investments.
Why should I care?
GRESB is becoming massively popular in the CRE space. The 2016 GRESB real estate assessment covered more than 66,000 assets across 63 countries, totaling $2.8 trillion in gross asset value. That means investors will increasingly expect CRE businesses to show strong results in their GRESB reporting.
And with growing research showing that investors are making important investment decisions based on ESG data, your ability to score well with GRESB may play a key role to your organization’s long-term success.
Furthermore, GRESB research shows that participants enhance their performance over time, meaning earlier adopters tend to outperform the global rating average.
I already use ENERGY STAR and LEED. How is GRESB any different?
Building-level certifications like ENERGY STAR and LEED are extremely valuable, but as public-facing validation of energy efficiency efforts, they’re an entirely different ball game. In fact, GRESB actually provides credit for the independent verification of ENERGY STAR, LEED, or other external sustainability reporting. An article published to the GRESB website last year laid out the growing value of these kinds of certifications in the industry.
"The green building industry is making waves, and with progress like this it is becoming impossible for anyone in or affected by the real estate industry not to notice," the article reads. "As brands like GRESB, LEED, USGBC, GRI, and CDP become increasingly recognizable and organizations continue to adopt sustainable practices, firms who don't join the movement will be less competitive among their peers."
Remember—GRESB is about showcasing your efforts to investors. Any evidence of your organization's energy efficiency efforts is going to be valuable.
What do I need to do?
Every year, GRESB collects data on the performance of CRE businesses that aligns with investors' expectations on key sustainability issues. The assessment evaluates these companies' performance in management, monitoring and environmental management systems, and performance indicators—such as energy and greenhouse gas emissions—among other factors. That means your ability to identify, address, and report progress on the key challenges and opportunities in your buildings’ energy efficiency will play a critical role in your GRESB assessment results. You’ll also need to understand what ESG efforts are material to your business—a critical factor that, when ignored, can actually have a negative impact on your organization’s financial valuation.
The GRESB Real Estate Assessment typically runs from April 1st, when the GRESB Portal opens, until the reporting deadline on July 1st. You can see some of the results from the 2016 GRESB Real Estate industry assessment here.