At the 2016 GRESB Results Global Launch in London, Nils Kok, GRESB CEO and founder, iterated the importance of operating an Environmental Management System (EMS) to implement practical and tailored sustainability solutions.
This is a position that we at EVORA fully support and have seen deliver notable improvements for our clients through protecting and enhancing the performance of their real estate assets and funds.
An EMS is structured according to ISO’s Plan-Do-Check-Act methodology.
A defined approach is required to understand issues, such as risk and opportunity, that are relevant to your business and real estate portfolio (PLAN). Actions will need to be taken to mitigate risks and implement opportunities (DO). A robust and structured methodology is required to measure the impact of these actions and track progress against targets (CHECK). Our proprietary software, SIERA, proved immensely beneficial in supporting the CHECK element of an EMS by reducing errors and improving efficiency in uploading Performance Indicator data through GRESB’s automated data uploader. Finally, adaption and enhancement of your strategy should be considered based on the outcome of your programmes (ACT).
GRESB addresses several key areas of an EMS within their survey such as management responsibilities, communication, training, objectives and, importantly, the results they are delivering. Developing an EMS therefore seems an appropriate approach to score well in GRESB.
We supported 41 GRESB submissions this year and as a result we have pooled a great selection of results from a broad range of clients and funds. This includes several clients, including Schroder Real Estate and Deutsche Asset Management, where we have operated an EMS over a number of years.
Impact of an EMS on GRESB Score
Overall, GRESB scores for our clients with an established EMS* were 14% higher than the GRESB average. This compares to an overall score 5% lower than GRESB average for funds without an EMS. Better than average performance was achieved in each of the seven GRESB aspects for funds with an EMS, whereas funds without an EMS only scored better than average in two aspects.
The results for our clients are conclusive; if you have an established EMS you are more likely to score better in GRESB than peers who do not have an EMS.
Chasing GRESB points will result in a satisfying Green Star. However, managing risk and enhancing asset value is a fundamental fiduciary duty of a fund manager. Therefore, we looked at quantitative evidence to identify whether the presence of an EMS was delivering results, as recorded through GRESB benchmark reports. The findings were impressive:
- Average annual like-for-like energy reduction of 10%
- Annual like-for-like energy reduction of 17,697MWh
- Estimated annual energy saving of £1.3m
- Carbon reduction of 9,040 tonnes.
Identifying the value of GRESB on fund performance is a complex task with many different interpretations on ‘value’. However, the results we have seen demonstrate two things:
- If you have an established EMS, you will perform better than the GRESB global average
- An EMS can and is delivering very notable improvements (to the tune of £1.3m) for our clients.
(* We consider an established EMS to be one that is fully aligned with or certified to ISO14001 and which has been operating for at least two years.)
To learn more about implementing an Environmental Management System, SIERA, or how we can support you with GRESB, please get in touch.
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