GRESB real estate benchmark merges with GBCI ‘LEED’ certifier: green property bonds considered

Alliance will combine ‘bottom up’ building data with ‘top down’ property manager info.

GRESB, the Amsterdam-based Global Real Estate Sustainability Benchmark, backed by some of the world’s largest asset owners, is merging with the Washington D.C.-based Green Building Certification Institute (GBCI), the organisation that looks after the widely-recognised LEED environmental building standards, in a move it said could enable the combined groups to develop more data-driven, environmental products such as green property bonds. The not-for-profit organisations said the merger would combine GBCI’s data on environmental performance, asset certification, and reporting for the underlying buildings in property investment portfolios alongside the GRESB Survey, which 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. Both outfits will maintain their current structures and locations, although Chris Pyke, Vice President Research at the GBCI will become joint Chief Operating Officer and GRESB hopes to add a US staff member working out of Washington. Nils Kok, CEO of GRESB, said the alliance was actively looking at product areas such as green property bonds, a version of the burgeoning green bonds market, as part of its plans to meld the ‘bottom up’ building data of GBCI with the ‘top down’ manager information of GRESB.
He said the merger would also enable the development of better research on the ‘value-add’ of green buildings in terms of investment performance. Whether green buildings can combine both environmental and financial performance and clearly justify institutional investor commitment is one of the main debates in the industry.

Kok said: “Green property bonds are a real opportunity for us where we could look at the greenness andsustainability of the property bond issuer as well as the use of proceeds of the bond and the validation of the process. Joining forces with GBCI enables us to deliver on the demands of both the property industry as well as the financial markets. This move is a logical next step in providing comprehensive sustainability information to the real estate sector, from individual assets to the portfolio level.”
GRESB was launched in 2010 by responsible investors PGGM, APG and the Universities Superannuation Scheme (USS). APG and PGGM have both taken board seats to maintain the asset owner push of the organisation. Today, GRESB has more than 143 members representing $8.9 trillion, of which 46 are pension funds including Denmark’s ATP, NBIM, the manager of Norway’s Government Pension Fund, Australian Super and the Ontario Teachers Pension Plan. This year, the number of property asset managers reporting sustainability data on their portfolio buildings to GRESB reached a critical mass to represent more than half (52%) of the FTSE EPRA/NAREIT Developed Index, the most widely used global investor benchmark for listed real estate.
The GBCI is the independent certifier for LEED (Leadership in Energy and Environmental Design) environmental standard for the design, construction, operation, and maintenance of green buildings, homes and neighbourhoods. Rick Fedrizzi, CEO of GBCI, said: “Since 2000, GBCI has evaluated and certified more than 10 billion square feet of green building space around the globe, and that number is increasing. We are excited about the possibilities from combining our network, knowledge and skills with GRESB, enabling both organizations to deliver better service and support, research, education and training.”