What is GRESB and why should you care about it

December 10, 2023

What is GRESB?

The GRESB real estate assessment

2023 GRESB real estate assessment

Which companies led the 2023 assessment in oceania?

The GRESB real estate benchmark

The assessment process

The GRESB score

The GRESB rating

Why is the GRESB important?

Are there alternatives to GRESB?

What is GRESB?

GRESB (Global Real Estate Sustainability Benchmark) is an organisation that provides assessments and benchmarks that can be used by businesses to compare their performance against their peers and find actionable advice on how they can improve their ESG performance.

Environmental, social and governance (ESG) has become one of the most critical measures of the performance in commercial real estate. Boards all over the world are looking at ESG as they monitor and report on the performance of the assets they are responsible for. In order to track performance, boards require a set of standards in order to give them a baseline and point of comparison.

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.

The GRESB Real Estate Assessment

In 2022, over 1,800 property companies, REITs and developers across the world participated in GRESB’s Real Estate Assessment.

The GRESB Real Estate Assessment is a comprehensive benchmarking tool for real estate companies, funds and portfolios that evaluates ESG across three domains:

Management: This set of measures looks at leadership, strategy, policies, risk management and stakeholder engagement.

Performance: Measures pertaining to ESG performance at the asset level are covered by these metrics.

Development: Recognising that buildings and infrastructure are not static, this set of metrics is concerned with the design, construction and renovation of buildings and how ESG is addressed through these activities.

Assessments are conducted through surveys where participants report on energy, GHG, waste, water and building certification at asset level. Unlike government-mandated audits, like ESOS, All data that is submitted is kept confidential. The data is validated and then used to create industry benchmarks that individual companies can compare themselves against. 

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.

2023 GRESB Real Estate Assessment

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.

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.

eBook: Roadmap to Net Zero for Commercial Property - Download now

The assessment process

Completing a GRESB assessment involves several steps. Here is a general outline of the process:

  1. Register interest: Register your interest to participate in the GRESB assessment through their website.
  2. 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.
  3. Complete the questionnaire: Access the assessment questionnaire through the online portal provided by GRESB.
  4. Submit the assessment: Submit the questionnaire within the April 1 – July 1 timeline, through the online portal.
  5. Verify data: Work with GRESB to review and validate the accuracy of the data provided in the questionnaire
  6. 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

Participants in the GRESB assessment receive scores for each category and indicator based on their performance and data provided. These scores are then aggregated to calculate an overall GRESB score, which is an overall measure of ESG performance represented as a percentage (with 100 percent being the maximum). 

A higher GRESB score demonstrates a stronger commitment to sustainable practices, effective management of ESG risks and opportunities and alignment with industry best practices. The score allows participants to compare their performance with peers, track progress over time and communicate their sustainability efforts to investors, stakeholders and the market.

The GRESB rating

The GRESB rating is based on the GRESB score and is calculated relative to the global performance of reporting entities. GRESB 5 stars is the highest rating, awarding recipients recognition for being an industry leader in ESG. 

The GRESB rating is awarded based on quintile positions relative to all participants in the GRESB assessment, meaning that each year 20% of entities will receive a GRESB 5 star rating. The rating provides investors with differentiation in overall ESG performance of the global property sector. For example, if certain regions systematically perform better, they will have on average higher-rated companies and funds.

Why GRESB is important

Independent assessment and benchmarking for ESG is important. As ESG is a relatively new area of concern for boards - it appeared initially as a UN initiative before becoming a global movement - having a set of verified benchmarks gives boards and other senior leaders in the property industry assurance that the work they are doing is the right work. It also ensures that they are not being overtaken by their competition.

Strong performance against the GRESB benchmarks can also provide property owners with a competitive advantage over their rivals. In an increasingly competitive property market, tenants are concerned with the ESG performance of the properties they access. By undergoing independent assessment, property owners can show clients they take ESG seriously and have an ongoing program to ensure they stay on top of potential issues and are committed to continual improvement.

See how CIM’s PEAK platform can help reduce your buildings' carbon emissions and minimise impact on the environment.

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”. 
eBook: A guide to unlocking operational savings cross a commercial portfolio - download now

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CIM's PEAK Platform is a best-in-class building analytics SaaS technology, improving efficiency, sustainability, and tenant comfort across property portfolios. Discover more by watching a demo.

Chris Joannides
December 10, 2023
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