by Brianna Crandall — September 26, 2018 — Global Real Estate Sustainability Benchmark (GRESB), the global environmental, social and governance (ESG) benchmark for real assets, just released the global results for the 2018 GRESB Real Estate Assessment. GRESB is said to define the standard for sustainability performance in real assets, providing standardized and validated ESG data to more than 75 institutional investors. The global results are highlighted below along with the North American results. Detailed results for additional areas of the world are also available on the GRESB website.
REGIONAL
Overall regional highlights include:
- Average year-on-year energy consumption for the Asia real estate sector fell by 6.0% — more than in other regions and significantly exceeding the 2.5% worldwide average reduction. Like-for-like greenhouse gas (GHG) emissions were down 3.8%, with water consumption falling 0.8% in the region.
- For a remarkable eight years in succession, the Australia and New Zealand real estate sector has outperformed other regions in sustainable performance. In 2018, the region achieved an average GRESB Score of 76 (2017: 73), compared with a global average of 68.
- With the largest numbers of entities reporting to GRESB, the Europe real estate sector is, once again, delivering ESG transparency at scale. With European companies and funds reducing global gas emissions by 5.6%, Europe maintains its leadership position compared to other regions. Similarly, with a 2.2% fall in water consumption, the average water consumption reduction for European participants outperforms the other regions.
- The North America GRESB cohort is still the largest in dollar terms globally.
GLOBAL
A record 903 real estate companies, funds and developers reported to GRESB this year, covering more than 79,000 assets across 64 countries. This is said to highlight the increasing transparency and measurement of ESG performance across the global real estate sector. Adding the Public Disclosure Dataset, GRESB reportedly has full coverage of the major listed real estate indices.
Notable in this year’s benchmark is the increased asset-level reporting on environmental, social and governance (ESG) data by more real estate companies and funds than ever before. Close to 50,000 assets were reported at the asset level, more than doubling the 2017 number and giving a high-level set of detailed ESG data and insights for the real estate investment market.
Sander Paul van Tongeren, co-founder and managing director at GRESB, stated:
Participation in GRESB has grown again in 2018 as investors seek standardized and validated ESG data to assess the sustainability of their real estate assets. This investor interest, backed up with accurate performance benchmarking, is empowering the spread of sustainable best practices across the world. We congratulate all participants in the 2018 GRESB Assessments. Their efforts are shaping the future of sustainability leadership for the sector.
The global average GRESB Score increased again, reaching 68 (out of 100), with listed entities retaining their lead over the private sector. Increases were seen across all regions: Asia, Europe, North America and Australia/New Zealand.
The sector achieved an important 4.9% reduction in greenhouse gas emissions year-on-year, accounting for Scope 1, Scope 2 and Scope 3 emissions (associated with tenant operations). In addition, 2018 saw a 2.5% average reduction in energy consumption and a 0.5% decrease in water consumption globally.
According to Mahesh Ramanujam, chairman, GRESB Board of Directors, and president and CEO, Green Business Certification Inc. (GBCI):
The 2018 GRESB results are proving that expectations have fundamentally changed in the real asset sector and investors are increasingly asking for greater transparency about the ESG performance of real asset portfolios. We are pleased by the continued increase in participation this year as it is clear that ESG is gaining prominence and becoming common practice. We congratulate all participants in the 2018 Assessments for the critical role they are playing in creating a world with more sustainable buildings and infrastructure.
2018 GRESB Global Sector Leaders
This list of Global Sector Leaders recognizes the real estate companies and funds taking measurable steps to incorporate sustainability into their operations and communicate their performance to investors and other stakeholders.
- Healthcare, Non-listed — Achmea Dutch Health Care Property Fund, Syntrus Achmea Real Estate and Finance
- Office, Non-listed — Australian Prime Property Fund Commercial, Lendlease
- Retail, Non-listed — Australian Prime Property Fund Retail, Lendlease
- Hotels, Non-listed — Bouwinvest Dutch Institutional Hotel Fund N.V., Bouwinvest REIM
- Residential, Non-listed — Build to Rent (1), Legal and General Property Investment Management
- Diversified, Office/Industrial, Listed — Castellum AB
- Developer, Listed — China Resources Land
- Residential, Listed — Equity Residential
- Industrial, Listed — Frasers Logistics & Industrial Trust
- Diversified, Office/Retail, Non-listed — Hines Master Fund Management Company S.a.r.l. on behalf of Hines Real Estate Master FCP-FIS, Hines
- Hotels, Listed — Host Hotels & Resorts, Inc.
- Diversified, Non-listed — J.P. Morgan U.S. Core, J.P. Morgan Asset Management
- Diversified, Office/Residential, Non-listed — J.P. Morgan U.S. Value Add, J.P. Morgan Asset Management
- Office, Listed — Kilroy Realty Corporation
- Other, Non-listed — Leisure Fund Property Partnership, Legal and General Property
- Developer, Non-listed — Lendlease One International Towers Sydney Trust, Lendlease
- Diversified, Listed — Nomura Real Estate Master Fund, Inc.
- Diversified, Office/Retail, Listed — Stockland
- Other, Listed — Swire Properties Limited
- Diversified, Office/Industrial, Non-listed — Triovest Realty Advisors Inc., Triovest Realty Advisors Inc.
- Industrial, Non-listed — UBS German Logistic Fund, UBS Global Asset Management
- Retail, Listed — Unibail-Rodamco
NORTH AMERICA
In 2018, GRESB scored and benchmarked the environmental, social and governance (ESG) performance of 220 North American real estate funds and companies. While the number of European entities participating in the 2018 benchmark is larger, at US$ 1.5 billion in total Assets Under Management, the North American GRESB cohort is still the largest in dollar terms globally.
The North America real estate sector improved its sustainability performance again this year, with the regional average GRESB Score breaking the 70 mark, up from 64 in 2017. This is higher than the global average (68) and second only to Australia and New Zealand (76).
However, when it comes to energy consumption, greenhouse gas (GHG) emissions and water consumption, the average year-on-year reductions posted by the North American sector fell behind global averages. North American entities reported a 1.8% reduction in energy consumption (compared to a 2.5% global reduction); GHG emissions are down 2.9% in the region (globally, emissions are down 4.9%), and water consumption increased by 0.3%, compared to a global fall of 0.5%.
A full 42 companies and funds in North America completed the new voluntary Resilience Module, which is more than in any other region and a sign that the sector is quickly waking up to the importance of managing long-term resilience risks. These efforts are not surprising given rising interest from institutional investors and the growing costs of unusual weather-related damage in the US and around the world.
Dan Winters, GRESB head of Americas, remarked:
The collective industry leadership exhibited by the record number of GRESB participants in North America reinforces the real estate industry’s strong ESG momentum and continued progress. With overall sustainability scores increasing once again the industry is getting on with the job of improving sustainability performance and communicating this to investors.
Neil Pegram, director of Americas, pointed out:
Property managers from outside of the USA, in Canada and Mexico, also showed improvements. There was an increase in both average scores and the number of participants from Canadian entities, who have long showed leadership in the region.
Sander Paul van Tongeren stated:
Participation in GRESB has grown again in 2018 as investors seek standardized and validated ESG data to assess the sustainability of their real estate assets. This investor interest, backed up with accurate performance benchmarking, is empowering the spread of sustainable best practices across the world. We congratulate all participants in the 2018 GRESB Assessments. Their efforts are shaping the future of sustainability leadership for the sector.
Mahesh Ramanujam added:
The 2018 GRESB results are proving that expectations have fundamentally changed in the real asset sector and investors are increasingly asking for greater transparency about the ESG performance of real asset portfolios. We are pleased by the continued increase in participation this year as it is clear that ESG is gaining prominence and becoming common practice. We congratulate all participants in the 2018 Assessments for the critical role they are playing in creating a world with more sustainable buildings and infrastructure.
2018 GRESB Sector Leaders from North America
This list of Sector Leaders recognizes the real estate companies and funds taking measurable steps to incorporate sustainability into their operations and communicating their performance to investors and other stakeholders.
Global
- Residential, Listed — Equity Residential
- Hotels, Listed — Host Hotels & Resorts, Inc.
- Diversified, Office/Industrial, Non-listed —Triovest Realty Advisors Inc.
Global and Regional Sector Leaders
- Diversified, Non-listed — J.P. Morgan U.S. Core, J.P. Morgan Asset Management
- Diversified, Office/Residential, Non-listed — J.P. Morgan U.S. Value Add, J.P. Morgan Asset Management
- Office, Listed — Kilroy Realty Corporation
Regional Sector Leaders
- Industrial, Listed — FIBRA Prologis
- Residential, Non-listed — GS Chelsea Co-Investment, LP, Greystar Real Estate Partners
- Office, Non-listed — Lionstone Hermes Real Estate Ventures, Lionstone Investments
- Diversified, Office/Retail, Non-listed — Oxford Properties Group (OMERS), Oxford Properties Group
- Retail, Non-listed — PLA Retail Fund II, PGIM Real Estate
- Retail, Listed — The Macerich Company
For more information, view the 2018 GRESB Real Estate results snapshot PDF or the 2018 GRESB Real Estate results page. Announcements of results for Asia, Australia/New Zealand and Europe, as well as global infrastructure, are also available on the GRESB website.
