The latest GRESB survey demonstrates an increasing commitment to reducing energy consumption, writes Philippa Shire

The Global Real Estate Sustainability Benchmark (GRESB) has released its 2013 GRESB Report, based on sustainability data gathered from 543 property companies and funds, providing aggregate information on 49,000 real estate assets across the globe.

Overall, the report shows a rise in sustainability performance of the global real estate industry. In 2013, 119 property companies and funds achieved Green Star status, in recognition of outstanding management and implementation of key sustainability issues.
Australia continues to demonstrate global leadership in sustainability performance as the top-performing region, whereas performance differences between Asia, Europe, and North America are becoming smaller.

This year’s survey indicates that sustainability is now integrated into day-to-day business decision-making in the real estate sector. For example, all participants in the 2013 benchmark confirmed that they undertake sustainability risk assessments compared with 60% in 2012. Over 80% of companies and funds reported that they involve senior management in the reviewing and monitoring of sustainability processes and 70% now have an environmental management system in place to manage their environmental programmes.

GRESB covers a broad range of sustainability indicators. While resource consumption is a
key indicator of sustainability performance, the survey also gathers information on approaches to green building and energy certification, sustainability risk assessments, and indicators related to governance and stakeholder engagement.

GRESB recognises the importance of collecting energy and water consumption data and the importance of monitoring waste management and GHG emissions. The 2013 GRESB Report shows that the real estate sector is reducing its environmental impact, decreasing energy consumption by 4.8% over the 2011-12 period – equivalent to the annual electricity consumption of 163,000 homes. Over the same period, GHG emissions decreased by 2.5%, and water consumption was reduced by 1.2%.

There are strong regional differences in energy reductions. Despite the continued focus of EU regulators on the built environment, Europe lags behind other regions, with only a small decrease in energy consumption (-0.7%). In North America, reductions in energy consumption are the largest globally, with a decrease of -6.6% in energy consumption (1,235 GWh) and -4.8% for GHG emissions (317,600 tonnes).

Asset-level monitoring of sustainability complements portfolio level analysis, and the survey also covers the use of green building and energy certification schemes. The use of these schemes is becoming more common, with 55% of survey participants having certified office assets in their portfolio. Certification in the retail sector is also common, with 34% of participants having certified retail shopping mall assets. In other sectors certified buildings are less common.

There are also strong variations across regions, with certification proving most popular in North America, perhaps due to the strong uptake in use of the LEED certification program, which also appears to be the scheme with the most global influence. Globally the number and variety of certification schemes is broad.

It will be interesting to see whether in Europe the revised EU EPC energy rating scheme leads to any further consolidation and harmonisation in asset-level certification and benchmarking.

It is an often-quoted statistic that the real estate sector is responsible for up to one-third of all global greenhouse gas emissions. As a big emitter, it is likely that the sector will continue to be a focus for regulators over the coming years. This year’s GRESB Report indicates that the sector has made real progress in embedding sustainability into investment decision-making. While there are regional differences, overall the trend towards deeper integration is clear. This momentum is a real opportunity for the conventional and responsible investment worlds to work together to further develop sustainability best practices in the real estate sector.

Philippa Shire is operations manager at GRESB