Spike of 30% in property manager sustainability reporting as investor push grows: GRESB report 2012

All major property associations now on board with benchmark.

The level of reporting of sustainability information by global property fund managers has risen dramatically on the back of growing investor pressure, according to the 2012 Global Real Estate Sustainability Benchmark (GRESB) survey, which recorded a rise of 30% in responses in just one year. The number of real estate asset managers responding to the survey rose to 443 in 2012, up from 340 in 2011. It means the survey now covers 36,000 buildings worth $1.32 trillion compared to $928bn (21,000 buildings) in 2011. One major reason for the growth in reporting has been the take up of GRESB by global real estate industry associations, which grew from 3 member groups in 2011 to 8 in 2012, covering all the major bodies. Another has been the dramatic growth in member organizations that drive GRESB and push property managers to report. Members of the organization almost doubled in number last year from 19 to 35, and their capital did double from $1.7bn in 2011 to $3.5bn in 2012. Notable asset owner joiners in the last year included Norges Bank Investment Management (NBIM), which manages the huge Norwegian Government Pension Fund Global, and Bouwinvest Real Estate Investment Management (REIM), one of the largest independent real estate investment managers in the Netherlands with €5.7 billion in assets.
Other existing asset owner backers include ATP Real Estate in Denmark, Australian Super and Local Government Super from Australia, MN Services, the Dutch pension fund manager, and the Ontario Teachers Pension Fund in Canada. It indicates a global groundswell of investors pushing for more clarity over the environmental transparency and responsiveness of their property assets to legislative moves towards greener buildings. GRESB was kicked off in 2010 by three of the largest European institutional investors, Dutch pension management giants APG and PGGM andthe Universities Superannuation Scheme in the UK. The three clubbed together to set up a global benchmark of the greenest listed property management companies to gee up poor reporting levels in the sector. The survey now asks property managers to disclose a series of sustainability responses. These are: management and strategy, policy and disclosure, risks and opportunities (such as the UK’s recently introduced Energy Act which will make it illegal to rent buildings that do not reach certain energy standards by 2018), environmental management systems, performance indicators, building certifications, and social developments. GRESB’s 2011 public report supplied a top 10 global list of top-performing real estate managers for sustainability, which does not appear this year. Instead, the report names the top-performing manager in each major region per real estate sector: retail, office, industrial, residential, other and diversified.
The 2012 report says 88% of responding property companies and funds now have dedicated resources to manage the sustainability performance of their assets, while 92% of firms entrust a senior manager with overall responsibility for the issue. For 81% of managers, energy consumption is the main policy focus with 60% of respondents now collecting and reporting energy consumption data compared to just 34% in 2011. Nonetheless, GRESB said the coverage was patchy with 52% of respondents having energy data for less than 10% of their portfolio. GRESB said the number of ‘Green Stars’ property managers, which are the top performing sustainability firms, increased from 65 in 2011 to 82 in 2012. However, it also noted that 40% of the property companies and funds reporting were still considered as “Green Starters,” with limited disclosure of sustainability performance for investors.