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Transparency and the business case for ESG in Real Estate

Last month we ran a thought leadership event on ‘Real Estate Sustainability: Planning for 2018 & Beyond’ kindly hosted by our client Schroders.

Two key themes were raised by the speakers and the panellists, which are certainly not mutually exclusive. The first was setting out the business case for ESG in Real Estate and the second was the issue of transparency.


Evolution of GRESB for 2018

Sander Paul van Tongeren, Managing Director of GRESB kicked off with 2018 updates for GRESB. Increased transparency is being introduced through ‘Validation Plus’ applied to a sample of indicators for all participants (as opposed to a sample of participants). Ensuring quality of submissions through greater transparency is essential for the ongoing credibility of the survey.

Sander Paul made it clear that GRESB is increasingly focussing on the asset level.  The GRESB Assessment at the fund level will be strengthened by adding asset level data.

In addition, Sander Paul made it clear that GRESB is increasingly focussing on the asset level.  The GRESB Assessment at the fund level will be strengthened by adding asset level data. This will necessitate the collection of asset level data where the transparency of that data has been evaluated, i.e. has it come from a trusted source, and its quality identified through adequate validation. This is where sophisticated software systems such as SIERA will become fundamental in receiving asset & meter level data with automated validation functionality to ensure the completeness and quality of the data, which will support high scores in GRESB.


Transparency through public disclosure

Ed Gabbitas of EVORA presented the findings of a recent research paper identifying that strong sustainability practices combined with public disclosure are associated with superior investment returns. The award-winning research found that “sustainable” Real Estate Investment Trusts (REITs) benefited from higher rental income and lower interest expenses, resulting in increased cash distribution to shareholders. A lower risk profile was also identified attracting higher premiums to Net Asset Value (NAV). Transparency through public disclosure was found to be a key facilitator of driving improvement.

Overall, a 3% fund return uplift was observed between the lowest and highest GRESB scoring funds.

Ed went on to highlight research to evaluate if strong GRESB performance correlates to enhanced fund returns for non-listed funds. Overall, a 3% fund return uplift was observed between the lowest and highest GRESB scoring funds. These finding are clearly helpful enabling the capital markets to use GRESB as a broad indicator of fund quality in their evaluation.


ESG ratings lead to better financial performance

Murray Birt, Senior ESG Strategist at Deutsche Bank advised there had been more than 2000 academic studies since 1970, seeking to identify if there is a link between ESG and financial performance – clearly not a new endeavour! The findings demonstrated high ESG ratings correlated to better financial performance across multiple asset classes and regions.

Neither this, or the immediate impact of global physical climate change, which Murray also highlighted, have had a major impact on the uptake by the real estate industry, to accelerate energy efficiency in buildings. The answer – improved and increased European wide policy requiring corporate disclosure and greater transparency to promote the setting and delivery of long term objectives to address climate risk.


Social Value and Impact Investing

Finally, Debbie Hobbs, Head of Sustainability at L&G Real Assets presented on the importance of Social Value and Impact Investing, ensuring investments generate a beneficial social impact as well as a financial return. Debbie presented research highlighting that nine out of ten millennials believe the success of a business should be measured by more than just financial performance and 60% of millennials want to join companies that have a societal purpose. Fundamentally transparency of impacts and social engagement is becoming a necessity, both in the way funds invest and corporates run their businesses.

60% of millennials want to join companies that have a societal purpose.

Anecdotally, we have recently been recruiting for a number of positions at EVORA, and remarkably, so far, every candidate interviewed has highlighted EVORA Giving, which focusses on our social side of sustainability, as a key element that has attracted them to apply to EVORA.


Transparency and the business case for ESG

So, going back to our two key themes. Firstly, transparency is clearly the new buzz word and for many good reasons it should help bring quality, clarity and progression of the ESG agenda.

[clickToTweet tweet=”A decade ago I saw sustainability almost as a leap of faith for many – now I see it as a leap of common sense. ” quote=”A decade ago I saw sustainability almost as a leap of faith for many – now I see it as a leap of common sense. “]

And what about the link between ESG and fund performance? – well research, which has been ongoing since the 1970s, has shown that there is direct correlation. Will that put the debate to bed? I doubt it. But as I said in my closing remarks at the event, a decade ago I saw sustainability almost as a leap of faith for many – now I see it as a leap of common sense. So let’s stop putting our energies into trying to prove its worth and instead make our buildings and the world we live in more sustainable.


If you have any questions about the event or would like to speak to us about how we can support you with your GRESB submission for 2018, please get in touch with the team.

 


GRESB Premier PartnerAs 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.

Changes to GRESB 2018 Real Estate Survey Part 2 – The Detail

Last week, my colleague Paul Sutcliffe penned a blog briefly setting out the headline changes to the GRESB 2018 Real Estate Survey.  Having had a bit more time to digest these updates, below I provide a detailed look at how the survey has changed this year. I also outline some key practical considerations.

Unlike Paul’s blog, this one is very much aimed at those working closely with the GRESB RE survey. For those that fit this bill (btw, lucky you/us!), please do read on and don’t hesitate to get in touch if you would like to discuss any of these changes further.


Entity and reporting characteristics – Composition of the entity’s standing investments during the reporting period (RC5.1)

Change: It will no longer be possible to report in units. Rather all property types will need to report in sq. ft. or m2.  

EVORA comment: This may present a challenge to many respondents as for certain property types, floor area surveys are often not available (e.g. hotels, student accommodation and car parks). In some instances, there may be other sources of information that can be used. For buildings (i.e. not car parks), this can include the EPC certificate. In most cases an area is also likely to be stated on insurance documents. Where necessary, entities may need to make assumptions to convert units into areas. For this, we suggest looking to country-specific planning regulations, which may have minimum space requirements – e.g. for car parks.


Management – Inclusion of ESG factors in annual performance targets of employees (2017: Q6)

Change: An additional sub-question has been added to this indicator, asking whether performance against these targets have ‘financial’ and or ‘non-financial consequences’. The list of possible ‘employee’ types has also been reduced from nine down to four (remaining options: ‘All employees’; ’Board of Directors’; ‘Senior Management Team’; and, ‘Other’). A requirement for a supporting evidence upload has been added.

EVORA comment: According to the pre-release, the scoring of this question has not changed, suggesting that the new ‘financial’ / ‘non-financial consequences’ differentiation is for information only. Therefore, we do not anticipate this question causing additional stress for respondents compared with last year. However, this change does hint at a wider trend seen across the ESG industry towards favouring a link between sustainability performance and financial incentives. Perhaps this is something we will see GRESB adopt in future versions of the survey.


Policy and Disclosure – Policies in place that address governance issues (2017: Q9)

Change: The list of governance issues that could be covered by an entity’s policies has been expanded; new options include data protection & privacy, fiduciary duty, fraud, political contributions, and whistleblower protection. The number of points awarded to this question has increased, from 1 to 2 points.

EVORA comment: Our expectation is that for larger reporting organisations few if any of these options will present a significant challenge. However, for smaller investment houses we wonder if for one or more of these new selections it may be difficult to provide the necessary documentary evidence to demonstrate that such issues are covered by a formal policy. We note that the full question includes an extensive list of options and it is not necessary to select all in order to obtain full marks. For anyone with particular concerns, we suggest doing a gap analysis against the full question.


Policy and Disclosure – *NEW INDICATOR* – Monitoring diversity (i.e. C-suite, Board, Management Committee)

Change: A new indicator has been added that asks if and how respondents monitor diversity amongst its governance bodies. The indicator will not be scored and will be for reporting purposes only in 2018.

EVORA comment: As with the previous indicator, we anticipate that larger (particularly listed) respondents will already be doing some or all of this – e.g. for certain countries / organisations this may already be a legislative requirement (e.g. EU non-financial reporting directive). For other, likely smaller, entities this indicator may require additional work and raise questions around the sensitivity of this information. We recommend engaging the relevant stakeholders (e.g. C-suite, HR department) as early as possible to work through any sensitivities and, if determined appropriate, a strategy for collecting this information. It is worth noting that for GRESB the pattern is often that new questions are introduced as ‘optional’ or for ‘reporting purposes only’ in year one, but from year two or three, they often become scored.


Policy and Disclosure – *NEW INDICATOR* – Commitments to ESG leadership initiatives

Change: A new indicator has been added that asks which third-party standards or groups respondents are members of / signatories to (e.g. IIGCC, PRI, RE 100, science based targets, TCFD, UNGC). The indicator will not be scored and will be for reporting purposes only in 2018.

EVORA comment: We have mixed feelings about this indicator because as worthy as these initiatives are, we feel that many are more appropriate for larger organisations that typically have more resources available to manage membership/alignment to these schemes. As mentioned above, ‘reporting purposes only’ questions often become scored in subsequent years.

Please note: We have experience support client’s alignment to various such initiatives and would be very happy to provide you with a complementary briefing on the opportunities and challenges presented by each of these initiatives. Contact us.


Policy and Disclosure – *NEW INDICATOR* – Process for communicating ESG-related misconduct, penalties, incidents or accidents

Change: A new indicator has been added that asks if respondents have a process for communicating ESG-related misconduct, penalties, incidents or accidents and if so, which stakeholders are included in the process. The indicator will not be scored and will be for reporting purposes only in 2018. However, according to GRESB this information may be used “as criteria for the recognition of 2018 Sector Leaders”.

EVORA comment: We anticipate that this indicator will be acceptable to most respondents.


Risk and Opportunities – Asset-level environmental and/or social risk assessments of standing investments during the last three years (2017: Q15.2)

Change: This indicator now requires reporting of ‘percentage (%) portfolio covered’ for each type of risk assessment. This indicator also now requires reporting of the third-party standard to which risk assessments are aligned (e.g. ISO 31000). Responses will be scored according to the issues selected and their respective % portfolio coverage. The open text box will no longer be scored and alignment to a third-party standard will not be scored (only required for reporting purposes).

EVORA comment: We can understand the rationale for this change, however, we have concerns over the additional reporting burden this will present for entities with larger portfolios. We note that some options are likely to be easy to determine a % coverage e.g. ‘GHG emissions’ and ‘regulatory risk’. Conversely, other options may require asset-by-asset consideration, such as ‘contamination’ and ‘flood risk’.


Risk and Opportunities –  Implementation of measures during the last four years to improve waste management (2017: Q19)

Change: This indicator remains the same as last year, however, it will be scored (whereas last year it was for reporting purposes only). This indicator will attract a maximum of one point.

EVORA comment: We agree with the principle behind this update, which increases the importance of and therefore focus on implementation of waste management improvement measures. This brings waste and resource management in line with the energy and water versions of this question and further shifts the overall balance of GRESB towards measuring / incentivising green ‘walk’, as well as ‘talk’.


Stakeholder Engagement – Employee and tenant satisfaction surveys (2017: Q34.1 & Q37.1)

Change: An additional sub-question has been added to this indicator, asking if and what ‘quantitative metrics’ were included in the surveys (e.g. overall satisfaction score). This new sub-question will not be scored and will be for reporting purposes only in 2018.

EVORA comment: This is a logical evolution to this question and should be borne in mind by anyone designing a satisfaction survey. Ultimately, it should improve quantification of what has historically been a largely qualitative issue.


Stakeholder Engagement – Monitoring of compliance with sustainability-specific requirements in lease contracts (2017: Q39.2)

Change: An open text box has been added to enable GRESB to further validate the approach taken by respondents to monitoring compliance with green lease clauses. Last year, this question was for reporting purposes only; however, this year it will attract a maximum of one point.

EVORA comment: In our view, this is another logical evolution to the survey. However, we do note that the process behind tracking green leases may not provide sufficient information on the number, depth and strength of green clauses in place.


Stakeholder Engagement – *NEW INDICATOR* – Engaging with supply chains to ensure ESG requirements are met

Change: A new indicator has been added that asks if respondents engage with supply chains to ensure ESG requirements are met. If ‘yes’ is selected, respondents are asked to describe the process in an open text box. The indicator will not be scored and will be for reporting purposes only in 2018.

EVORA comment: We anticipate that this indicator will be acceptable to most respondents and note an overlap with a subsequent question on monitoring supply chain compliance with ESG requirements.


Stakeholder Engagement – *NEW INDICATOR* – Stakeholder grievance mechanism

Change: A new indicator has been added that asks if respondents have a formal process for stakeholders to communicate grievances. If ‘yes’ is selected, respondents are asked to select from a list of ‘characteristics’ of the grievance process (e.g. rights compatible, transparent) and stakeholders that the process applies to (e.g. community, contractors). The indicator will not be scored and will be for reporting purposes only in 2018.

EVORA comment: As with most of the other new indicators, we anticipate that larger respondents will already be doing some or all of this. For other, likely smaller, entities these processes are less likely to be formalised and therefore demonstrating compliance may require additional work.


Performance indicators – Landlord versus tenant data collection and coverage (2017: Q25.1 & 27.1)

Change: Although tenant energy/water consumption data is still requested, GRESB have committed to reducing the weighting it receives within the scoring and benchmarking of the ‘data coverage’ element of responses. Correspondingly, they will shift the emphasis onto data coverage of the landlord-controlled energy and water supplies.

EVORA comment: We fully support this update and have been lobbying GRESB on the issue for a while. For us it makes complete sense to focus scoring on what the landlord has control over, rather than their tenant activities, which they often have little ability to influence (particularly for certain property/portfolio types – e.g. industrial/logistics, FRIs).


Performance indicators – Like for like data coverage area (2017: Q25.1 & 27.1)

Change: Respondents will now have to report on the size of the ‘like for like’ portfolio reported within the energy and water consumption data tables.

EVORA comment: We support this update and note that this should not add additional reporting burden for those using a good asset-level data collection and validation software tool, such as SIERA.


Performance indicators – Like for like consumption trends (2017: Q25.1 & 27.1)

Change: The scoring of reported energy and water consumption trends for the ‘like for like’ portfolio has changed. Last year all three points available for this indicator were attributed to the direction and scale of the consumption trends. From this year, one point will be awarded for data availability and only two points attributed to the consumption trend.

EVORA comment: This change should provide investors with greater clarity on the proportion of the portfolio that is driving change. However, as the like-for-like consumption trend is the only truly ‘performance based’ indicator, in our view, stealing points from the consumption trend aspect and giving them to data coverage is not entirely progressive.


Performance indicators – Scope 3 emissions (2017: Q26.1)

Change: Reporting of Scope 3 greenhouse gas (GHG) emissions has become mandatory. In the context of GRESB, Scope 3 emissions include those associated with energy consumption in tenant areas and/or indirectly managed assets. From this year, Scope 3 emissions will be included in the scoring and benchmarking of responses, both in terms of data coverage and the ‘like for like’ consumption trend.

EVORA comment: We understand the principle behind this update, however we question the intention to score the Scope 3 like for like consumption trend, as well as data coverage. This is because, as mentioned above, generally tenant energy consumption and therefore GHG footprint is beyond the landlord’s control. As above, we note that this should not add additional reporting burden for those using a good asset-level data collection and validation software tool, such as SIERA.


Building Certifications – Green building certificates during design/construction/renovation or operation (2017: Q30.1 & 30.2)

Change: There is an expansion to the scope of these questions to include a requirement to provide certification levels/scores achieved (in addition to the overall schemes applied). This element will not be scored in 2018; it will be for reporting purposes only.

EVORA comment: We are supportive of this update and again, note that this should not add additional reporting burden for anyone using a good asset-level data collection and validation software tool, such as SIERA.


To find out how EVORA can help you to navigate GRESB, whether you are a first timer or an experienced respondent, then please get in touch.

 


GRESB Premier PartnerAs 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.

 

Changes to GRESB 2018 Real Estate Survey Part 1 – The Headlines

The GRESB pre-survey was published today (15th February).  As expected, a number of changes have been made to both the question-set and the process.

Over the course of the next couple of days we will review these changes in detail, before coming back to you with a more comprehensive summary in a separate blog. For now, please see the headlines below.


Changes to the questions for GRESB 2018

  • Enhanced validation – The three tier validation process (All Participant Check; Validation Plus; and, Validation Interviews) continues, however, from this year the All Participant Check will be extended and will be applied to all responses for a select number of questions (previously only 25% of responses were subject to this level of check).
  • Reduced reporting burden – There are a reduced number of mandatory open text boxes (but with more opportunity to provide context).
  • Green building certificates – There is an expansion to the scope of the Green Building Certificate questions, including a requirement to provide certification levels/scores achieved (in addition to portfolio coverage).
  • Scope 3 – Mandatory reporting of scope 3 emissions is introduced, covering emissions associated with tenant areas and/or indirectly managed assets.
  • Like for like consumption – There is a requirement to define the floor area associated with like-for-like portfolios.
  • Asset level data – GRESB continues its increased focus on data quality, by making additional points available for respondents submitting asset-level energy, carbon, water, waste data.
  • Health and wellbeing – 2018 will be the final year of the Health & Wellbeing module.
  • Resilience – A new resilience module is launched.

Changes to the process

  • Fee – There will be a participation fee introduced for non-members. This will not be applicable to first time participants submitting under the ‘Grace Period’ or participants from non-OECD countries.
  • Scorecards/Benchmark Reports – All participants will receive a Scorecard and Benchmark Report for all of their submissions.
  • Response Check – The Response Check is available on request from April 1 to June 8, 2018 subject to available resources.

The changes have been implemented to improve accuracy of data collection and to push the industry further towards sustainability performance improvement.  EVORA already supports its clients in both of these areas. Our expert sustainability consultants and engineers advise clients across the piece – from strategy through implementation to reporting. Furthermore, we use our proprietary software platform SIERA to collect and validate client data at meter and asset level.


What next? Tips to get you started

If you are involved in the GRESB process, we recommend that you start planning for the submission process now. Some practical tips to get you started:

  • Changes to GRESB – Review the new question set as soon as possible. Consider the changes (there is an overview at the start) and how you will develop your response to address these –  now.  GRESB 2018 includes text boxes to provide additional context to your answers – how and where will you use this option?
  • Changes to your entity – For previous participants consider last year’s results – responses should truly reflect the processes, procedures and performance of the funds and portfolios you manage.  Was anything missed from previous submissions?  Have you changed any processes and procedures relevant to the GRESB survey?
  • Evidence – Identify what evidence is required (including, but not limited to, audits and assessments, implementation of improvements, performance data and building certification). Establish how this can be collected and liaise directly with property management teams.
  • Plan, Do, Deliver – Establish and follow a detailed submission plan.

As mentioned, we are in the process of reviewing the new question set in detail and will publish more information shortly – so keep an eye out for updates.


To find out how EVORA can help you to navigate GRESB, whether you are a first timer or an experienced respondent, then please get in touch.

The full survey can be found here.

 


GRESB Premier PartnerAs 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.

GRESB 2018 Top Tips. Part 2 of 2

Looking to boost your GRESB 2018 score but not sure where to start? Never fear, as here at EVORA we have conducted extensive analysis of results and come up with some tips and tricks for picking up points.

Read Part 1 ‘What have we learnt from the GRESB 2017 results?here.

Visit our GRESB support service page.


GRESB 2018 Top Tips

1. Get an EMS

An Environmental Management System (EMS) is an organisation-level framework for the review, evaluation, and improvement of environmental performance. When aligned with the ISO 14001 standard, an EMS is immediately worth 2.5 points on the GRESB survey. Furthermore, an EMS helps you plan and direct environmental action to areas of the business where it will have the biggest effect, which will in turn generate further GRESB points. If you don’t have one already, our experts here at EVORA can help you develop an EMS uniquely tailored to the wants and needs of your organisation.

2. Data Data Data!

The methods for data collection and the extent of data coverage are huge elements of your final GRESB score, so getting a well-organised process in place is crucial for good performance. Table 1 summarises where data matters in the GRESB survey and how EVORA can help:

GRESB Analysis Fig 4

Table 1: The points available in GRESB 2017 for data capture and management

We are still waiting to hear if there will be any changes to the scoring for GRESB 2018, but we can guarantee that data capture and management will have a huge part to play again.

To find out more about our specialist data management software, visit the SIERA page or give the office a call on +44 (0)20 3266 7333 and we will be happy to tell you more.

3. Get Audited

Conducting technical building assessments is a great way to improve environmental performance, and another opportunity to rack up GRESB points. GRESB does not fully disclose the scoring system for the technical building assessment question, but by analysing client data we have developed a strong understanding of the scoring model used in the 2017 survey, based on the percentage coverage (by lettable area) where audits have been completed:

GRESB Analysis Fig 5

Table 2: Approximate scoring categories for GRESB Q16: Completion of Technical Building Assessments by floor area coverage

Whilst the overall question is scored out of 4.5, each category of assessment has its own limit to the points that can be achieved, and is then subdivided into four scoring categories based on portfolio coverage.

An important point to note is that we found no instances where a portfolio had some coverage but scored no points. This means an assessment of any type conducted anywhere, even on the smallest of assets, will immediately get you GRESB points.

[clickToTweet tweet=”This means assessment of any type, anywhere, even on the smallest assets, will get you GRESB points!” quote=”This means an assessment of any type conducted anywhere, even on the smallest of assets, will immediately get you GRESB points”]

Furthermore, such assessments actively seek to identify opportunities for efficiency improvements. These opportunities not only helps you to save on utility bills, but can improve your scores on GRESB Questions 17 and 18, which relate directly to the implementation of energy and water efficiency measures. Our team of experts is experienced in the completion of all kinds of audits, so get in touch to learn more about what we can do for you.

4. Get Certified

With a global average score of just 46, the Certification & Energy Ratings section is the GRESB aspect where there is most room for improvement. It is also something we know all about here at EVORA.

The scoring for Question 30 (regarding green building certificates) is a little complex, but essentially the portfolio coverage of New Construction and Operational certificates are benchmarked against that of other entities in your region within each GRESB property type, and you end up with a score for each property type of either 2, 4, 6, 8, or 10. All the scores are then weighted based on Gross Asset Value, and combined into a final question score out of 10. A full description of how the scoring was done can be found in the GRESB Reference Guide, or alternatively get in touch and we’ll be happy to explain it in full.

GRESB Analysis Fig 6

Figure 3: Points Scored vs New Construction certificate coverage for European offices in GRESB 2017

The key take-away is that there are real opportunities to pick up lots of points here. This is because the current low level of certification in real estate portfolios worldwide means that the benchmarking procedure used bottom-loads the scoring. As a result, even small amounts of certification coverage in your portfolio can score well, particularly if you have a combination of both New Construction and Operational certificates. Figure 3 focuses specifically on New Construction certificates amongst European offices, a particularly well certified property type, and shows that less than 50% certification coverage would have scored 8 out of 10 for this property type in GRESB 2017. Other property types benchmark even lower, so require even less coverage to rack up points.

[clickToTweet tweet=”BREEAM In Use, as one of most widely recognised certification schemes in the world, is ideal choice” quote=”BREEAM In Use, as one of the most widely recognised and respected certification schemes in the world, is an ideal choice”]

Of course, as certification becomes more popular worldwide this will drive up the benchmark percentages, but don’t let that dissuade you from an excellent opportunity to improve your GRESB score. BREEAM In Use, as one of the most widely recognised and respected certification schemes in the world, is an ideal choice, and is a service that we can provide. Get in touch to learn more.

Changes for the 2018 survey

Because of the constant shifting nature of sustainability and the real estate industry, GRESB reviews its survey each year and tends to make some changes to the scoring system. These are yet to be announced but, as a premier partner, EVORA is at the heart of the process, has a strong idea of how it will evolve, and is keeping tabs on GRESB releases on our clients’ behalf. Check out this blog by our Founder & Director Ed Gabbitas on GRESB’s ongoing review as an example.

We look forward to supporting you through GRESB 2018!

For enquiries regarding GRESB support or any other of our services, give our office a call on +44 (0)20 3266 7333, or email us at info@evoraglobal.com.

 


GRESB Premier PartnerAs 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.

What have we learnt? GRESB 2017 Analysis. Part 1 of 2

The GRESB 2017 results show that comprehensive support from EVORA significantly improves performance, helping you maximise and showcase your environmental credentials and add value to your portfolio.

Visit our GRESB support service page.


The GRESB 2017 cycle is officially over. The points have been tallied, the reports released, and the winners named. But there’s no resting up here at EVORA; we are already hard at work helping our clients prepare to do even better in GRESB 2018. This blog will show you how the support of our team of experts has boosted GRESB 2017 performance for our clients, and share some tips and tricks we have devised ahead of 2018.

GRESB Analysis

Figure 1: Overall GRESB score in 2017

In the 2017 cycle, EVORA provided a comprehensive ESG development and GRESB support programme for 26 real estate funds, and the results speak for themselves. Whilst the average score in GRESB 2017 was 63, clients that received comprehensive support from EVORA averaged 67.

GRESB Analysis 2

Figure 2: Comparing the change in GRESB score for funds that took part in both 2016 to 2017

Furthermore, whilst GRESB participation is driving increases in sustainable performance across the board, reflected in the year-on-year GRESB average score increase of 3 points, EVORA is pushing its clients to another level, averaging an increase of 8 points amongst those who took part in GRESB 2016 (Figure 2). One fund we worked with also came first in its peer group, showing that EVORA can help even the most ambitious clients realise their goals.

GRESB Analysis 3

Figure 3: Comparing the average GRESB Aspect scores to that of our clients

Not convinced? Let’s break this down a little further. The GRESB survey is divided into seven key aspects, which are then combined to give the overall GRESB score. Using these categories as indicators, Figure 3 shows how our clients managed to improve considerably more than other GRESB participants. The strong results were driven in particular by high scores on the Monitoring & EMS and the Certification & Energy Rating aspects; key areas of expertise in our consultancy team here at EVORA. Furthermore, our vast experience producing GRESB submissions means we can help you collate all the relevant evidence and script your text box answers to ensure you get every point you deserve, the benefit of which can be seen in the strong Management and Policy & Disclosure aspect results.

[clickToTweet tweet=”Our experience producing GRESB submissions means we can help collate evidence and script text answers” quote=”Our vast experience producing GRESB submissions means we can help you collate all the relevant evidence and script your text box answers”]

Still not convinced? Not sure GRESB is worth the investment? Well, not only does sustainability and resource efficiency reduce operational costs in assets, now environmental and social responsibility are increasingly common demands from investors. GRESB is the world’s leading benchmark for these issues, and a good score will go a long way to proving your commitment to tackling ESG challenges to both investors and the wider public, helping to protect and enhance the value of your portfolio.

Contact us for more information about how we can help with GRESB 2018

Look out for part 2, coming soon!

 


GRESB Premier PartnerAs 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.

Understanding the GRESB 2018 Fee Structure for Real Estate Assessment

Since its inception in 2009, GRESB has been ‘free’ at the point of use for entities submitted by non-member fund managers or property companies. From 2018, non-members in selected markets[1] will be required to pay a fee of EUR3,500 or USD4,100 per entity (i.e. per submission). Fees for members have also shifted upwards by around 20% depending on the number of entities participating.

[1] The fee will apply globally with the exception of companies and fund managers incorporated or headquartered in Latin America, Africa and parts of Asia where ESG reporting and GRESB coverage are less established

Visit our GRESB support service page.


Why are fees being introduced and upped?

GRESB sets out three main reasons for the introduction of a fee:

  1. Market coverage and recognition: GRESB has clearly captured the ESG benchmarking market for the Corporate Real Estate market and now holds a position that they believe is strong enough to command (higher) fees across all reporting entities. The change will undoubtedly cause some to grumble and as such, investors, now more than ever, need to enforce the expectation / requirement of open disclosure by the vehicles in which they invest.
  2. Member benefits and increased analytics: Following receipt of GRESB results, applying a feedback loop to review performance ratings achieved across the seven GRESB Aspects and two Dimensions is a vital step for planning future sustainability programmes.  Under the new fee system, the Benchmark Report will be provided to all participants (the price of this in 2017 was €2,750, which goes someway towards the overall €3,500 fee for a single entity submission). At EVORA, we develop sustainability roadmaps for all our clients (using Benchmark Reports) to help them plan effective programmes that deliver value to their funds and enhance GRESB ratings.
  3. A smooth reporting process to lessen the burden of reporting: This will be welcomed by many I am sure! Our clients already benefit from SIERA’s seamless asset level reporting and we have recently incorporated further features to make year-round reporting, and scoring, even easier and more transparent.

[clickToTweet tweet=”We develop sust. roadmaps for clients to help plan programmes that deliver value to funds and enhance GRESB ratings.” quote=”We develop sustainability roadmaps for all our clients (using Benchmark Reports) to help them plan effective programmes that deliver value to their funds and enhance GRESB ratings.”]


The fees

From 2018, entries for non-members will be EUR 3,500 or USD 4,100 per entity, payable once annually. The participation fee does not apply to Developer Assessment participants or for first-year participants who report under the Grace Period.

The range of members fees are increased from EUR 3,250 – EUR 15,900 up to EUR 4,000 – EUR 20,500 (roughly a 20% increase). Full details are shown in the table below.

[clickToTweet tweet=”It will be cost effective to become a member if you’re a fund manager/property company submitting more than 1 entity” quote=”Put simply, it will be more cost effective to become a member if you are a fund manager or property company submitting more than one entity”]

Put simply, it will be more cost effective to become a member if you are a fund manager or property company submitting more than one entity. There will, however, be instances where the membership fee cannot be split across multiple entities and it may therefore introduce a new cost for certain fund managers.

Additionally, GRESB has also introduced a charge of EUR 100 or USD 115 if you require an invoice for payments not made via a credit card.


What Next?

In truth, not much has changed in regards to the GRESB submission process. The increased cost of completing the survey will, however, raise more questions on the value of GRESB. This is where EVORA helps our clients to establish meaningful, practical and, importantly, value driven programmes that improve funds and asset ESG performance.

Contact us to find out how we are helping clients to meet investor, tenant, and other stakeholders demands for more sustainable, greener and healthier buildings.


GRESB Premier PartnerAs 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.

GRESB Results 2017: How SIERA Delivered Immense Efficiencies

The GRESB Results 2017 are out and the EVORA team is eagerly reviewing the scorecards and reports to see how our participating clients fared. Early indications are that the news is generally excellent. EVORA will have a presence at the results event in London next week, so we look forward to joining the other attendees to get GRESB’s view on the overall direction of travel.

Visit our GRESB support service page.


As one of the members of EVORA’s GRESB delivery team, I’ve been reflecting on the journey we took over the summer months to get to this point.

From a numbers perspective, it’s interesting to me that the effort to collate, validate and aggregate many and often disparate data points gets distilled down to a handful of scores across the main GRESB Aspects. The process of data gathering is a necessary function and can take a lot of time, but it’s important that participants and their delivery partners allow for time to understand the materiality of the data in each of the Aspects in relation to their business strategies. However, this is easier said than done when delivery times can often get compressed near the submission deadline. So it’s even more important that there are tools that drive efficiency in the data gathering and validation process so that we can take a step back from the detail to understand what the data is showing us.

[clickToTweet tweet=”@GRESB #data gathering can take a huge amount of time. The good news is that much of it can be automated with #SIERA.” quote=”GRESB data gathering can take a huge amount of time. The good news is that much of it can be automated.”]

For us as a delivery team, our system SIERA was vital in being able to provide the efficiencies we needed to be able to manage the sheer quantum of data that we were handling. The number of GRESB submissions that we were directly involved with delivering increased from last year by 57% to 36 in 2017. As many will appreciate, the sharp end of the data processing often relates to asset level data as this is more granular, so usually more assets means more data. To put this into context, in these direct submissions, we saw an 84% increase to just shy of 1000 assets collectively that without SIERA we would likely have found far more time consuming to manage.

New to SIERA? This video explains the software in less than 2 minutes.

SIERA is one of the systems that is helping with the shift away from manual entry to more automated transfer of data to the GRESB portal. Our Managing Director, Chris Bennett, wrote previously on how a more seamless transfer of data is welcome but it’s important we have visual clarity of the data being submitted. I’d like to explain a little more how SIERA helped provide both visual clarity but also massive efficiencies.

First of all, we had replicated GRESB’s Asset Level interface in SIERA so we could automate the transfer of not just the Performance Indicators but also a key set of qualitative asset level question responses and building characteristics. This meant that when we were happy with the data we could simply upload the SIERA template directly into the GRESB Portal and populate the Portfolio data, thus entirely removing the need to manually enter data into the GRESB Asset Spreadsheet.

This integration is only possible because SIERA’s database structure is fully aligned to GRESB’s data requirements. Even GHG calculations and waste volumes by disposal route are automatically calculated, which further reduces the chance of human error.

[clickToTweet tweet=”EVORA’s @sierasoftware significantly reduces the risks of human error when it comes to @GRESB’s #data requirements.” quote=”SIERA software significantly reduces the risks of human error when it comes to GRESB’s data requirements.”]

In 2017 we took SIERA beyond the Asset level interface to drive further efficiencies by automatically calculating the responses to a number of percentage coverage-related questions. Again, this was only possible due to SIERA’s ability to hold broad range of data types. For example, SIERA can store and profile EPC data for any EU region which meant that SIERA could automate the response to Q31, saving vast amounts of time using what would otherwise likely be spreadsheets. SIERA also replicated question RC 5.1 utilising the property characteristic information SIERA holds, which helped to align responses to the Performance Indicators.

The examples that I have highlighted in this post demonstrate how SIERA helped to save countless hours of data input which we typically estimated to be around a 70% time saving. EVORA is continuing to expand the question responses SIERA can auto-calculate and survey Aspects that can be more efficiently answered, so we look forward to being able to support on even more GRESB submissions in 2018.


Questions? Come and meet us at the GRESB Results 2017 Launch event in London on 13th September. To book a demonstration of SIERA, please don’t hesitate to get in touch.

 


GRESB Premier PartnerAs 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.

2017 GRESB Results: Future developments for enhanced portfolio sustainability performance

I, like many others, will be excited to receive the 2017 GRESB results when they are released tomorrow, 6th September. The rating approach, often simplified by how many Green Stars have been achieved, veils the trials, tribulations and efforts undertaken over the past year (or longer in many cases) to prepare for and complete the survey.

Visit our GRESB support service page.


Whilst I eagerly await gratifying news on how our clients fared for their past efforts, I am certainly more enthusiastic about collaborating on future programmes that will deliver value to their portfolios through making buildings productive, profitable and resilient to change.

In a previous blog, I introduced how the framework of an Environmental Management System (EMS) structured according to ISO’s Plan-Do-Check-Act methodology, is central to implementing successful real estate sustainability strategies that also result in better than peer average GRESB results.

In this blog, I introduce how insights into future developments of the GRESB survey will also provide that same win-win result of enhanced portfolio sustainability performance and GRESB ratings.


The Performance Indicator – a three-layer approach

The Performance Indicator (PI) ‘aspect’ is one of seven aspects in the GRESB survey. It holds joint top weighting, at 25%, with the Stakeholder Engagement aspect. Arguably, it is the Performance Indicator aspect that can best portray (to investors) how portfolios are performing and, importantly, contributing towards meeting the ambitious international targets set in the Paris Agreement. The PI aspect allows participants to set out their long-term sustainability targets together with quantitative disclosures on data coverage, like-for-like change and intensity values (KPIs) for energy, water, waste and carbon impacts.

A concern, however, is that the current approach does not provide investors with sufficient comparability of portfolio performance. This concern is underpinned by the fact that the current GRESB scoring approach rewards data coverage more highly than like-for-like change (concerning only year-on-year change, which certainly has limitations), but moreover, that no points are awarded for long-term changes to portfolio intensity values, such as kilowatt hours per metre square of lettable space. Only the methodology used to calculate intensities is scored, rather than the change in intensity values over time. The reason for this is likely due to a lack of data transparency and potential accuracy issues that stem from portfolio level, rather than asset level, reporting.

[clickToTweet tweet=”GRESB is willing to introduce an additional scoring element for accurate asset level data.” quote=”Current discussions indicate that GRESB is willing to introduce an additional scoring element for participants that can disclosure transparent and accurate asset level data.”]

GRESB recognises these issues and has set out to address them through a series of benchmarking committees, which EVORA participants in. Current discussions indicate that GRESB is willing to introduce an additional scoring element for participants that can disclose transparent and accurate asset level data. I expect GRESB to introduce their three-layer approach to Performance Indicator scoring in the 2018 or 2019 survey. This approach is set out below:

  1. All assets are evaluated on Transparency, based on data availability
  2. Only assets with high transparency levels can be evaluated on data Quality, given the external forms of data assurance or internal capabilities of data analysis (asset level data checks)
  3. Only assets with high data quality can be evaluated on Performance, most likely driven by like-for-like and intensities values.

Enhanced scoring methodology

GRESB is seeking to enhance its scoring methodology with the objective that only assets with high quality data are benchmarked to ensure fairness. This strategic change may assist in providing investors with more certainty on sustainability performance and comparability between portfolios.

[clickToTweet tweet=”GRESB is seeking to enhance scoring methodology with objective that assets with high quality data are benchmarked” quote=”GRESB is seeking to enhance their scoring methodology with the objective that only assets with high quality data are benchmarked to ensure fairness”]

Requesting asset level data will undoubtedly increase the reporting burden for a number of participants – most notably those who painstakingly enter portfolio level data directly into the portal.

Data can already be submitted at the asset level, either via an API link or the Asset Level Interface. However, this function is not used by all participants and furthermore, if you do not have the benefit of a sustainability software platform, such as SIERA  (which seamlessly updates the PI sections using the Asset Level Interface), then data collection and analysis will remain a manual, laborious task.


So why bother?

As mentioned above, the reward of additional points will be a sufficient driver for many. However, GRESB aside, let’s not forget that to make any notable impact on the performance of a portfolio, it is essential to have asset level data (or preferably meter level data) available in a format that can be easily accessed, interpreted and communicated to Asset and Property Management Teams in order to effectively manage sustainability impacts across a portfolio.

For more information on using data management systems to enhance portfolio performance see here.

Whilst some may see this change as GRESB introducing additional challenges and reporting burdens, I applaud their ambition in seeking to drive change in the real estate industry through promoting the availability and disclosure of investment grade asset-level data.

I applaud their ambition in seeking to drive change in the real estate industry through promoting the availability and disclosure of investment grade asset-level data.

It is important to reiterate that reporting asset, or even meter level data, doesn’t have to be a burden. Many participants, including all our clients benefitted from using the direct interface provided by SIERA to seamlessly update the required field in the Performance Indicator section and additionally, to review opportunities to make their buildings productive, profitable and resilient to change.


What’s next?  Plan-Do-Check-Act

Reverting to the Plan-Do-Check-Act methodology, I recommend that Fund, Asset and/or Property Managers review if they can effectively understand and manage sustainability impacts at asset and meter level using existing programmes. Where there is any doubt, I encourage stakeholders to:

  • Plan – start early and identify what you can meter already and what you would like to meter
  • Do – implement an appropriate metering strategy according to the value proposition of doing so
  • Check – utilise the powerful Monitoring & Targeting, and reporting tools provided by SEIRA
  • Act – use the investment grade data obtained through SIERA to drive improvements across your portfolio(s)

If you’d like to talk to us about your GRESB results, or about SIERA, we will be at the London results launch on 13th September. Please don’t hesitate to get in touch to arrange a meeting or a demo.


GRESB Premier PartnerAs 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.

110 Seconds To Understand How SIERA Sustainability Software Can Help You

Watch Our New Video Now!

Watch our new animated explainer video for SIERA, which gives you a high-level overview of everything our innovative sustainability software solution can do for you.

Depending on where you are and how convenient it is to watch a video, you can:

1.     Watch the video with the sound on – recommended

2.     Watch the video with the sound off – the captions will allow you to follow along

3.     Read the video script, which is pasted below for your convenience

We hope you enjoy the video and that you will want to learn more by attending one of our webinar demonstrations or getting in touch to book a one-to-one demo.

Thanks for watching!


SIERA Sustainability Software – the right choice for your business


Video Script

Every year, environmental management becomes more complex and reporting requirements become more stringent.

Which is why the sustainability experts at EVORA came up with SIERA – a unique and innovative software solution.

Not only does SIERA make all your sustainability reporting easy – it also enables you to quickly identify energy savings in your buildings.

[clickToTweet tweet=”SIERA makes sustainability reporting easy and enables you to identify energy savings in buildings” quote=”Not only does SIERA make all your sustainability reporting easy – it also enables you to quickly identify energy savings in your buildings”]

Never before has collecting and validating your environmental data been so easy. Whether it’s automating data collection, or dragging and dropping your data from Excel files, SIERA makes a complex process simple.

The intelligent modelling capability covers a range of regulatory and voluntary reporting requirements, quickly and intuitively.

In fact, SIERA saves our clients up to 70% of their time spent on GRESB reporting.

SIERA also gives you an overview of your property and portfolio performance, helping you mitigate regulatory risk and prioritise improvement opportunities.

SIERA’s ground-breaking Energy Monitoring and Targeting module automatically alerts you to energy efficiency opportunities.

Savings are easy to identify and can be achieved without any capital expenditure.

[clickToTweet tweet=”SIERA gives an overview of property/portfolio performance, helping mitigate regulatory risk” quote=”SIERA gives you an overview of property and portfolio performance, helping you mitigate regulatory risk and prioritise improvement opportunities”]

Whether you’re seeking a hands-on solution, or a fully managed service with EVORA’s expert consultants – SIERA is the right choice for your business.

SIERA is already managing over 4,000 properties and is being rapidly adopted by large organisations across the globe.

Isn’t it time you used SIERA too?


 To learn more about SIERA and discover how it can save you time, stress, and money, please get in touch today to arrange a demonstration.

 


GRESB Premier PartnerAs 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.

Six weeks in the life of an EVORA Data Analyst

The EVORA team has grown by 108% since May last year. Jenny, our new EVORA Data Analyst tells us what the first six weeks of EVORA life have been like.


Straight into GRESB deadline season

I joined as an EVORA Data Analyst at an extremely busy time of the year, it was the business end of the GRESB window, which resulted in me being plunged into the deep end from my first day. After my initial induction where I learnt more about EVORAs recent expansion I began on my first (of many!) GRESB tasks. GRESB was a completely new concept to me, and the amount of data which needed to be collected and analysed was mind-boggling, but thankfully we had SIERA to take a lot of the pain away. Whilst being given responsibility on the first day can be a little bit daunting it was great for me as the usual first day nerves didn’t have time to take hold. The main problem was the fact that it was the hottest day of the year and everyone in the office was melting!


CRC – allowances, annual reports and data audits

With GRESB behind us just a couple of weeks after joining, the CRC deadline was then looming. At University, I had briefly studied the CRC so I knew the basic principles and the intention of the legislation. However, I wasn’t aware of the amount of data which needed to be collated and the amount of money our clients pay for allowances in order to ensure compliance. Calculating the allowances, compiling annual reports and completing data audits resulted in me taking a lot on board in a short space of time – which was a steep learning curve. I was shocked to discover that following the 2018-19 reporting year the government are scrapping the CRC. Whilst it may be considered overly burdensome with regards to the time taken to collate the data and general administration – it at least keeps energy on the business agenda. Whilst adding extra monies onto electricity and gas bills (after 2019) is going to result in a similar amount of monies going into the government purses it doesn’t exactly have the same impact on business as ordering £200,000 worth of carbon allowances!

I was shocked to discover that following the 2018-19 reporting year the government are scrapping the CRC. Whilst it may be considered overly burdensome with regards to the time taken to collate the data and general administration – it at least keeps energy on the business agenda


SIERA – collate and analyse vast data sets quickly and easily

In addition to the GRESB and CRC deadlines, quarterly performance reporting has become a huge part of my daily life at EVORA. With the assistance of SIERA I collate and analyse vast data sets of electricity, gas and water consumption across various assets for multiple clients. The most rewarding part is when the performance reports we produce directly help to focus the facilities and building managers on the areas which matter. For example, we recently issued a quarterly performance report to a building manager which highlighted poor gas performance. Within an hour, emails had been sent to tenants asking about their heating requirements and the M&E engineer was investigating potential issues with the boilers. Without our reports – none of that would have happened, they might have just noticed that their bill was a bit higher for the quarter. I find this part of my job extremely fulfilling as these reports directly help our clients to discover their inefficiencies, improve the performance of their assets and ultimately save money.

[clickToTweet tweet=”It’s rewarding when performance reports directly help facilities/building managers on areas which matter” quote=”The most rewarding part of this is when the performance reports we produce directly helps to focus the facilities and building managers on the areas which matter.”]

When I mentioned at the start of this blog that I joined EVORA at a particularly busy time of the year I was wrong. I don’t think there ever is a quiet time of the year at EVORA! I have joined EVORA at an exciting time; the recent rapid expansion of the company demonstrates just how in demand our services are. I can’t wait to get stuck into the next task sent my way (potentially Environmental Management System work or shadowing an energy audit). Here’s to the next six weeks!


You can keep up to date with vacancies at EVORA on our social media channels: Twitter, LinkedIn and Instagram.