September 9, 2016
The global real estate market is showing signs of improvement across all areas of environmental, social and governance performance (ESG) including a 1.2 percent reduction in energy consumption, 2 percent reduction in GHG emissions and close to 1 percent reduction in water use. It is also placing greater focus on occupant health and well-being. This is according to the latest data compiled by GRESB, a benchmarking organisation for real estate companies and funds which evaluates sustainability practices in the global real estate sector. In the results for the 2016 GRESB Real Estate, Developer and Debt assessments, which analyses the sustainability performance of more than 1,100 real estate portfolios of both private equity and listed companies, Australian entities outperformed all other regions with an average score of 74, which is 14 points above the global average; and office companies and funds outperformed other property types with an average score of 66.
“The 2016 GRESB data demonstrates that the global real estate sector is working to manage its carbon footprint, build resilience in the face of climate change and respond to more stringent environmental regulations,” said Nils Kok, CEO of GRESB.
“In 2016, 90 percent of property companies and funds reporting to GRESB are integrating carbon management strategies into their investments. These actions have contributed to a 2 percent annual decrease in carbon emissions, the equivalent of taking 704,464 passenger cars off the road.”
A record 759 real estate companies and funds participated in the assessment, representing more than 66,000 assets across 63 countries, with a value of $2.8 trillion. Entities reporting to GRESB for seven consecutive years outperform their peers by an average of 12 points across all aspects of ESG. As a result, the overall GRESB Score increased by 11 percent to 60.
“GRESB ESG performance data and trends matter because they show that, on average, property companies and fund managers are acting to improve sustainability performance. Leading companies and funds are being rewarded with more efficient and more desirable properties — which may ultimately translate into better financial performance,” says Jennifer Young, principal, the Townsend Group.
Now in its seventh year, the GRESB Real Estate Assessment has established itself as a roadmap to high sustainability performance and low carbon emissions for the real estate sector, assessing more than 1,100 real estate portfolios since its inception.
Commented Philip Hirst, JLL’s Director, Upstream Sustainability Services, which hosted the launch of the report: “GRESB has become the primary sustainability benchmark for the listed real estate sector and JLL is central to this initiative; sitting on its technical committee, hosting the results launch and advising our clients on the benchmark.
“This year GRESB introduced a health and wellbeing module to reflect the massive growth in interest in this topic amongst investors and real estate companies, further reinforcing the value of this survey to our clients and the opportunities that JLL has to become the leading advisor on health and wellbeing in buildings.”
For more details on the global results check the 2016 GRESB Global Snapshot.