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Real estate managers reporting sustainability data reaches 50% of world’s biggest property index: 2014 GRESB results

Manager focus on sustainability implementation rising, says benchmark report.

The number of property asset managers reporting sustainability data on their portfolio buildings to the Global Real Estate Sustainability Benchmark (GRESB) has reached a critical mass, representing more than half (52%) of the FTSE EPRA/NAREIT Developed Index, the most widely used global investor benchmark for listed real estate. GRESB, which launched five years after it was kicked off by Dutch responsible investors PGGM and APG and the UK’s Universities Superannuation Fund, said participation had now become “standard practice” for most of the world’s real estate fund managers and listed property companies. It said there has been a more than 220% increase in responses since 2009 with 637 (543 in 2013) listed and unlisted property funds now submitting data, covering 56,000 buildings with an aggregate value of $2.1 trillion. GRESB scores property managers out of 100 based on eight major sustainability data reporting aspects such as management involvement, policy and disclosure, performance indicators and stakeholder engagement. Looking at the overall aggregate reporting score of the responding property investors, GRESB said it had increased by 9 points between 2013 and 2014 to reach 47 out of 100, mostly driven by property managers increasing their levels of actual implementation. Regionally, the overall performance of property companies and funds in Asia increased most significantly, up 23% since the 2013 report to reach 46 points. Property funds in Australia/New Zealand still lead in overall sustainability performance, with a score of 61. The average score in North America is 44 and the average score in Europe is 47. Listed property companies obtained on average a seven points higher average score (52 out of 100) than private funds. However, the improvement in data reporting only led to a relatively small decrease in energy and water use and carbon emissions by property funds over the year. GRESB said that collectively in 2013 the commercial real estate sector reduced its energy consumption by about 0.8%, carbon emissions fell by 0.3%, and water consumption fell by 2.3%.GRESB said asset owners were using its data as part of property fund manager selection and due diligence criteria as well as material for manager engagement.
The value of sustainability data and information in property rental and sale values is contested, although manager respondents to GRESB said that evidence was growing. Phil Clark, Head of Property Investment for AEGON Group’s Kames Capital, said: “We believe that there is sufficient data available to show that sustainability, and especially environmental matters are increasing their impact when forecasting investment returns. Being part of GRESB helps build our knowledge of these matters amongst like-minded investors that share that view.”
GRESB publishes a global list of the top ranking global ‘leaders’ on sustainability reporting, which is below:

Company Name – Fund Name – Property Type – Region

  • Bentall Kennedy Group – Bentall Kennedy Group North America – Diversified – Global
  • Steen & Strom – AS Steen & Strom AS – Retail – Global
  • UBS Real Estate KAG mbH – UBS (D) – German Logistics Property Fund 2 – Industrial – Global
  • Lend Lease – Australian Prime Property Fund Commercial – Office – Global
  • Invesco Advisors, Inc – Invesco San Jacinto Core Fund, L.P. – Residential – Global
  • Host Hotels & Resorts, Inc. – Hotels – Global
  • HCP, Inc. – Healthcare – Global
  • Ventas, Inc. – Other – Global
  • ISPT – Divers – Office/Retail – Global
  • Workspace – Diversified – Office/Industrial – Global
  • GECINA – Diversified – Office/Residential – Global

Link to the 2014 GRESB results