One of the more notable changes that GRESB has introduced for the 2018 survey is their approach for verifying participant’s answers.
Starting in 2018, GRESB (or more accurately, their parent company GBCI), will perform a deep dive (termed Validation Plus) on all participants for a subset of questions and indicators. Previously, the approach was to select 25% of participants for a detailed review of an entire response.
GRESB Verification – why do we need it?
The rationale for validating responses is simple to comprehend. If unchecked, there is a risk that some respondents may stretch the truth and overplay an entities performance and/or practices for ESG management. Checking all participants on the same subset of indicators creates a more level playing field, which should be to the benefit of sustainability leaders who can easily demonstrate and disclosure their performance. However, the check is still very light touch as, typically speaking, only one document needs to be uploaded to indicate how ESG is implemented / managed across a fund; one example of good practice may be the exception and not the rule for some.
[clickToTweet tweet=”Validation is not in place to trip people up or create unnecessary burden. It is an action that GRESB must take to ensure the ratings it gives to participants are credible.” quote=”Validation is not in place to trip people up or create unnecessary burden. It is an action that GRESB must take to ensure the ratings it gives to participants are credible.”]
Validation is not in place to trip people up or create unnecessary burden. It is an action that GRESB must take to ensure the ratings it gives to participants are credible. Why is this important? From the outset, GRESB has stated it is an investor driven organisation. If investors are being fed inaccurate information, then they may not be able to accurately identify good ESG strategies from mediocre or non-existent ones. Investor confidence will suffer as a result and GRESB will fizzle out.
It was fascinating to learn about Danone’s (the yoghurt people) announcement in their Financial report issued last month. In it they stated an agreement for “tying financing cost and environmental and social performance”. The interest paid on their €2billlion credit facility, syndicated by 12 international banks no less, would be impacted upwards or downwards on the basis of ESG performances, as measured by independent third parties. Additional factors other than ESG are also considered.
WOW! Wouldn’t this raise the bar for GRESB submissions if an entities credit rating and / or credit facility was linked to the number of Green Stars GRESB issued each year!
GRESB verification – Top Tips
So how can you ensure your GRESB response is accurate and that evidence submitted is accepted by GRESB?
We set out below, our six top-tips.
- Read the guidance document – GRESB is transparent on the scoring requirements for each indicator. Participants should familiarise themselves with the guidance document to ensure they understand what is required for each response.
- Get advice – if you don’t have the time or inclination to read the 264 page guidance book, get expert help from EVORA. We have had visibility of 98 assessments so far and as such have significant experience. I’m looking forward to passing the century mark this year (and most probably the double hundred!)
- Focus on data integrity – the Performance Indicator section now carries the highest weighting of any section (termed Aspect by GRESB) at 25.6%. Asset level data is at the heart of this section and data transparency and accuracy is key. Look out for my colleague Chris Bennett’s blog on how SIERA delivers on data integrity.
- Communicate early– GRESB is a comprehensive multi-disciplinary survey. It is highly unlikely that one person will have the answer to all questions. Participants should be aware of internal and external stakeholders they need to involve in the process and communicate requirements to them early.
- Take time over evidence – sourcing evidence, signposting content via the Upload Template, and preparing / splitting / merging pdfs takes time. It is worthwhile taking the time to keep accurate records, as this can help deliver efficiencies for future years. It is also worthwhile taking time to ensure that signposting GRESB to relevant evidence is accurate. This includes hyperlinks and ‘deep link’. Broken links are the responsibility of the participant and will be interpreted as the absence of evidence.
- A global benchmark? Finally, your assessment response must be submitted in English. For a Global benchmark this seems a little harsh for the many non-English speaking participants and I know from experience that it is a major frustration. Uploaded evidence does not need to be translated entirely. However, a thorough summary of the content, sufficient to convey that each requirement has been met, should be provided in English. This will add time and /or cost for many participants.
Following my advice will ensure your ESG strategies are assessed accurately by GRESB. I have seen many responses (not completed by EVORA!) marked down for not following guidance.
We are hosting a webinar on 19th April titled How to overcome GRESB challenges and achieve your best score. Join us to hear insights on how to save time, reduce complexity and align GRESB ratings with your sustainability strategy.
As a GRESB Real Estate Premier Partner, we are perfectly positioned to provide GRESB support. View our official Premier Partner profile.
We can work with you to complete the submission and understand your scoring, as well as develop a sustainability plan that will improve your future GRESB performance and align with your organisation’s key environmental objectives.