.jpg)
In this article, we explore the significance of the GRESB score and GRESB rating for commercial property owners, highlighting their importance in demonstrating sustainability efforts. We provide insights on how to improve your GRESB score, enhance your sustainability performance, and attract investors by implementing effective strategies and best practices.
Jump to:
How to improve your GRESB score/rating
How building analytics can help
What is GRESB
GRESB (Global Real Estate Sustainability Benchmark) is an industry-driven organization that assesses and benchmarks the environmental, social, and governance (ESG) performance of real estate portfolios and assets worldwide. The organization has over 200 members, and was started in 2009 to provide financial markets with actionable insights, ESG data and benchmarks. For more information, check out our blog on an overview of GRESB.
What is the GRESB score?
The GRESB score, calculated as part of the GRESB assessment (more information on the GRESB assessment here), is a standardised measure of ESG performance for your property portfolio and assets. It is represented as a percentage (with a 100 percent maximum) and is designed to provide investors and stakeholders with quantitative insight into a real estate entity’s ESG performance in absolute terms, over time and against their peers.
The GRESB score takes into account various aspects such as energy efficiency, carbon emissions, water usage, waste management, stakeholder engagement and governance practices.
What are the components of the GRESB score?
The GRESB Assessment is made up of three components, where the sum of the scores for each indicator adds up to a maximum of 100 points. The maximum score for each indicator is a weighted element of the overall GRESB score. Here is an overview of the three components:
Management component: This set of measures looks at leadership management, policies and processes, risk management, and stakeholder engagement.
Performance component: This component measures an entity’s entire asset portfolio performance, including risk assessment, targets, tenant & community, energy, greenhouse gas emissions, water, waste, data monitoring & review, and building certifications. The GRESB performance component is key in helping owners understand how to make commercial buildings more energy-efficient.
Development component: Looks at an entity’s efforts to address ESG issues during the design, construction and renovation of buildings. This component is applicable to entities involved in new construction and/or major renovation projects.
What is the GRESB rating?
The GRESB rating is based on the GRESB score and is calculated relative to the global performance of reporting entities. It is calculated based on an entity’s quintile position relative to all participants in the GRESB assessment, meaning if an entity is placed in the top quintile it will be a GRESB 5 star rated entity.
Given the GRESB rating is calculated relative to the global performance of all reporting entities, it gives investors and stakeholders a clear view of where entities stand on a global scale. GRESB 5 stars is the highest rating, giving organizations recognition for being an industry leader.
What other measures does the GRESB assessment provide participants?
Scorecard: Assessment participants receive a Scorecard that provides a summary of their overall performance, as well as information on each GRESB aspect. The Scorecard provides information about both absolute and relative performance, as well as high-level information about opportunities to improve ESG performance
Benchmark Report: Participants also receive a Benchmark Report, which provides an in-depth analysis of the sustainability performance of a property company or fund. In addition to the information in the Scorecard, the Benchmark Report contains a detailed question-by-question comparison with peers. This helps participants develop detailed plans to improve their sustainability performance. Participants can also request Customised Benchmark Reports, which provide an alternative comparison and ranking based on a customised peer group selected by participants.
Portfolio Analysis Tool: This tool allows participants to compare their portfolio to a self-selected benchmark, based on region, property type and management style. It provides an aggregated overview of the sustainability performance of a portfolio of property companies and/or funds, which provides significant value for fund managers that participate with a number of entities.
Why are these important?
Having a high GRESB score and GRESB rating is important for several reasons:
- Investor attraction: Investors, including institutional investors and asset managers, are increasingly considering sustainability factors in their investment decisions. A high GRESB score and rating demonstrate a real estate entity's commitment to ESG practices, making it more attractive to investors seeking sustainable investments.
- Risk mitigation: A high GRESB score and rating indicate that an entity is effectively managing ESG risks and incorporating sustainable practices into its operations. This can help reduce potential risks associated with climate change, regulatory changes, resource scarcity, and social factors.
- Cost savings: Emphasising sustainability measures can lead to cost savings through improved energy efficiency, reduced resource consumption, and lower operating expenses.
- Competitive advantage: In an increasingly competitive real estate market, tenants are becoming concerned with the ESG performance of properties they access. By achieving a high GRESB score and rating, property owners can show clients they take ESG seriously, thus attracting a higher demand for their properties.
How can I improve my GRESB rating and GRESB score?
There are several steps that owners of commercial buildings can take to improve their GRESB score and enhance their sustainability performance:
- Energy efficiency measures: Implement energy-efficient measures to reduce energy consumption and improve resource management. This can include installing energy-efficient lighting systems, optimizing HVAC systems, conducting energy audits, promoting water conservation practices, and implementing waste reduction and recycling programs.
- Sustainability policies and strategies: Develop and implement clear sustainability policies and strategies that outline the entity's commitment to ESG practices. This includes setting targets, defining responsible investment practices, and establishing governance structures to oversee sustainability initiatives. Having a well-defined roadmap and demonstrating progress towards sustainability goals contributes to a higher GRESB score.
- Stakeholder engagement: Engage with stakeholders, including tenants, investors, employees, and local communities, to understand their sustainability priorities and concerns. Conduct a stakeholder satisfaction survey that includes questions around health, wellbeing and the satisfaction people have with their workplace or the building (including its amenities and functionalities). The survey should also ask for improvement suggestions and be designed to allow tracking for progress over time.
- Building certifications: Pursue relevant building certifications and standards such as LEED, BREEAM or NABERS. These certifications demonstrate a commitment to sustainable building practices and can contribute to a higher GRESB score.
- Social responsibility and diversity: Implement social responsibility initiatives that focus on community engagement, social inclusion, diversity, and employee well-being. This can include supporting local charities, promoting diversity and inclusion policies and providing employee training and development opportunities.
- Data coverage: Understanding the potential of your building is a key foundational element. In our recent webinar on 'The roadmap to Net Zero for commercial property', GRESB's Head of Asia Pacific, Ruben Langbroek, explained:
"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.
It is important to note that the GRESB score covers all aspects of ESG performance, so entities must improve their performance in social and governance areas as well as sustainability in their real estate portfolios.
Where does building analytics come in?
Data can achieve 19.5 points from a section worth 70 points, with data coverage (meaning the number of square metres in a building that data is available for) making up a significant portion of those points. This is exactly where CIM’s PEAK Platform can help.
PEAK can integrate with various building systems and sensors to automatically collect and aggregate data related to energy consumption, water usage, indoor air quality, occupancy rates, and other relevant metrics. This automation reduces manual data entry, increases data coverage and will improve your GRESB score.
The platform can also help optimize your building’s existing systems to improve energy performance, enhancing sustainability across your portfolio and improving your GRESB assessment performance. Our advanced algorithms and analytics capabilities analyze collected data, down to the equipment level, and identify trends, patterns and opportunities for improvement in building operations and performance. By leveraging these insights, you can make data-driven decisions to reduce your energy usage and enhance sustainability practices.
By utilising the PEAK Platform’s capabilities, entities can enhance their data collection accuracy, gain valuable insights, optimize existing building systems and improve operational and energy efficiency.
Which companies led the 2023 Assessment?
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.
Interested in improving your sustainability?
Our team of experts is here and ready to help! Request a callback, and let’s discuss how we can leverage your data to increase energy efficiency in your portfolio.
