The global real estate sector as measured by the investor-backed Global Real Estate Sustainability Benchmark (GRESB) cut its greenhouse gas emissions by more than 3% in 2014.
GRESB, launched in 2009 after it was kicked off by Dutch responsible investors PGGM and APG and the UK’s Universities Superannuation Scheme. Investor members include leading pension investors such as APG, Local Government Super, Cbus, Sweden’s AP funds and Norges Bank Investment Management to name a few. The initiative has backing from top global real estate houses, real estate industry bodies and property firms like CBRE, Cushman & Wakefield and JLL.
In its latest survey, released today (September 2), it has emerged that on average the sector achieved a 3.04% reduction in GHG emissions, a 2.87% cut in energy consumption and a 1.65% reduction in water use. “We’re impressed by these numbers,” GRESB CEO Nils Kok told Responsible Investor.
Another finding is that onsite renewable energy generation surged to 445GWh from 296GWh before – though it still only represents 0.5% of total energy consumption. A feature of the report is that sustainability has become more integrated; some 93% of real estate companies and funds incorporate sustainability into business objectives, GRESB says.
But some in the market “still flat out refuse” to complete the survey, Kok said in an interview, suggesting it was because they aren’t doing anything on sustainability.The survey had 707 respondents from property companies and private equity real estate funds – representing 61,000 assets and $2.3trn in asset value.
GRESB has started to focus more on health and well-being in buildings, looking at issues such as air quality, light and recycling. Kok pointed to various studies that are starting to show how sustainability can pay off in real estate.
INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, released a study last year looking at transparency and performance using GRESB data. The paper was co-written by Maarten van der Spek, Senior Strategist at PGGM.
And, earlier this year, the Carbon War Room think tank released a study, also using GRESB data, which it said found a link between the sustainability of buildings and the stock market performance of real estate investment trusts (REITs). It was called The Financial Rewards of Sustainability: A Global Performance Study of Real the Estate Investment Trusts.
Meanwhile, Sweden-based real estate investment firm Catella has predicted
the European market for sustainable property funds will grow to around €850m by mid-2016. Its Market Tracker for September is called Sustainable Real Estate Funds and Head of Research Thomas Beyerle said there is a lack of uniform standards in building assessment and certification and no “universal seal of approval for sustainable real estate funds nor a benchmark for peer-group comparisons”. GRESB home page.