Essential Guide to GRESB - 3 Key Benefits
Whether you're experienced or new to the sustainability side of things in the real estate industry, you probably heard GRESB mentioned a lot. Between all the acronyms already used in the real estate industry (ESG, REIT, EMEA), it can be easy to forget about it. But, GRESB is a crucial one that you should keep in mind. GRESB stands for Global Real Estate Sustainability Benchmark. Since 2015 they have become one of the main (amongst many) organisations setting the standards for ESG performance. GRESB is aiming to appeal to asset managers, owners of real estate and property developers. So, let's check out the basics of GRESB and take a brief look into the benefits and reasoning behind it.
What is GRESB?
Founded in the Netherlands in 2009, GRESB has become the go-to authority for many asset managers and owners. Their assessment provides a consistent framework for asset owners and property managers to measure ESG performance. They do this based on self-reported data that they check, score and peer benchmark. Every year a survey is sent out asking about all things sustainable. Everything is asked about from water to carbon output, which is why it’s so important to track data efficiently and consistently. They even ask about how you treat your employees. All of these and more are key to getting.
Benefits of GRESB
The investment market is increasingly more interested in the sustainability of their assets. Meaning the more sustainable your asset is, the more investors will be willing to invest. It’s also becoming more straightforward and more profitable to be more eco-friendly than ever before. Not to mention if you don’t you’re putting a great deal of capital at risk. With GRESB representing over 1,000 property development companies, REITs, funds and developers, their asset value is increasing every time they improve their GRESB score. In 2019 alone, over 100,000 assets, valued at more than $4.5tn assets under management participated in the GRESB survey. Each year the participant number grows, as more people start to realise the benefits of a GRESB score.
2. Cut Costs
We believe what gets measured gets improved. By benchmarking their energy usage every year, participants can measure how they can enhance their GRESB score each year. Tracking your energy usage has never been easier thanks to ZiggyTec, you can track your utilities and access live data 24/7. Helping you to find any inefficiencies or leaks that shouldn’t be there.
3. Economy + Environment = Win-Win
Measuring your ESG ratings can not only benefit you financially, but it can also help the environment. Real estate is one of the most significant contributors to CO2 emissions. Putting off millennial investors to a certain extent. But if companies create pans to help fight climate change and become more sustainable, then Millenials will invest as it aligns more with their goals. Also, by prioritising sustainability, it puts your capital at less risk. Investment groups like the Investment Group are giving their companies under their management a 3-year deadline to get their climate crisis plans in place.
How do you get a GRESB Score?
The GRESB survey is like a test with 3 different parts.
Within the 3 parts, there are quantitative and qualitative reports; however, not all of the question will apply to you. With some specifically for developers that won’t apply to property managers.
In every component, there are ‘Aspects’ which are like sections in a test. Within each of these aspects are several questions about your business. There are various types of questions;
Fill in the blank questions
GRESB will use your response to these questions to give you your score. A large amount of the test is based on your quantitative data, such as the Performance Component, which makes up around 70% of your final score. So if you’re not tracking your energy usage, make sure you start sooner rather than later!
What does the Survey look like?
You can find all of the resources for GRESB on their website. There are several surveys, so it’s about finding the one most relevant for you.
GRESB is Here to Stay
GRESB has grown to become one of the leading authorities when it comes to ESG. By niching down to the commercial property industry, they have passed out older institutions and become the go-to authority.
Numerous other authorities in the US and UK offer some competition such as GRI (The Global Reporting Initiative), CDP (formerly the Carbon Disclosure Project), and DJSI (Dow Jones Sustainability Indices), BREEAM and LEED.
It’s hard to know what the landscape of ESG benchmarking is going to look like in the future. One thing is for sure that it’s becoming an increasingly important issue for property and asset owners, regulators, investors and consumers, which is why transparency is so important.