GRESB benchmark hits US$4.8trn as it pushes for asset-level reporting

Further participation in the GRESB Real Estate Benchmark has seen coverage grow by 22%, covering 1,229 portfolios encompassing more than US$4.8trn (€4trn) in assets under management.

GRESB, which provides global environmental, social and governance (ESG) benchmarks for real assets, said the growth showed “an industry responding decisively to the accelerating investor demand for comparable ESG data”, despite the challenges of the COVID-19 crisis.

For the first time, GRESB introducted mandatory asset-level reporting to improve data quality and a new reporting structure that places more weight on the performance component – comprising information collected at the asset and portfolio levels – leading to a “benchmark-wide score reset”. As a result, the average GRESB score fell from 70 to 72 (out of a possible 100).

GRESB said the asset-level data reporting – covering more than 96,000 assets – made it possible to “provide granular calculations of energy, greenhouse gas [GHG] emissions and water use intensities by entity and property type”.

GRESB is part of the Carbon Risk Real Estate Monitor (CRREM) project, and early analysis shows that average GHG intensity of European participants exceeds the CRREM 2C pathway by 2035, and the 1.5C pathway as early as 2027.

“We will be engaging closely with the industry to agree on the development of the calculation methodology for future years,” GRESB said.

Last week, GRESB announced it had become independent of the Green Business Certification Inc, and at the time co-founder and managing director Sander Paul van Tongeren said it represented “a new era for GRESB with deeper industry involvement”.

Listed property companies continue to outperform the private sector, but their lead has shrunk when compared with previous years – the average GRESB score for standing investments is 71 for listed and 70 for private.

Offices continues to perform the best in terms of average GRESB scores, but the other property types are closing in the sector’s lead.

Regionally, Oceania is still ahead, with an average GRESB score of 77, while the Asian real estate sector comes in second, with 72, followed by Europe, at 69.5, just slightly ahead of the Americas at 69.

Once again, Europe leads the world in transparency with the highest number of new entities participating in the benchmark, while the Americas cohort remains the largest in dollar terms globally. Americas is also the only region where the average score for the private sector (70) is higher than the listed sector (67).

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