More than $5.7trn (€4.91trn) of property assets are being covered by GRESB, after participation in its real estate sustainability benchmark rose by 24% – the highest-ever yearly percentage increase since it began more than 10 years ago.
The number of entities participating in the GRESB Real Estate Benchmark also rose to its highest level ever (1,520), contributing data on 117,000 individual real estate assets.
Growth has been driven mainly by participation in Europe – the region saw a large increase for the second year in a row and now accounts for nearly half of the entire benchmark. GRESB attributed this to investor interest in ESG data and emerging regulations in the region.
After falling last year, in part due to the introduction of a new reporting structure, average GRESB scores rose in 2021 from 70 to 73 for standing investments.
The benchmark showed unprecedented reductions in utility usage, with like-for-like reductions in energy consumption, greenhouse gas (GHG) emissions and water usage nearly threefold from previous years. These reductions were most pronounced in Asia, which saw decreases in energy consumption (8%), GHG emissions (10%) and water consumption (11%).
Charles van Thiel, director of real estate at GRESB, said: “The industry continues to make impressive strides, deepening its commitment to ESG transparency and focusing on improving sustainability performance.”
The aggregate value of assets covered by GRESB’s newer infrastructure benchmark is a fraction of the real estate benchmark’s coverage: $343bn at the fund level and $738bn at the asset level.
But participation in the GRESB Infrastructure Fund Assessment this year grew by 26% to 149 funds completing the management component and by 41% to 106 funds completing both the management and performance components.
The infrastructure fund assessment now covers more than 30% of the IPE Real Assets Top 100 Infrastructure Investment Managers, which itself covers €1.29trn of assets under management.
Participation in the GRESB Infrastructure Asset Assessment grew by 31% to cover 558 assets. Most assets are based in Europe, but there was growth in participation numbers in the Americas (105 to 142) and Asia (21 to 31).
The average percentage of individual assets within funds reporting to GRESB continues to grow and has now reached 83%. GRESB said this increase showed that infrastructure managers were moving closer to asset-level reporting. By sector, renewable power saw the highest growth in participation (65%), followed by environmental services (64%), transport (44%) and network utilities (27%).
On average, overall GRESB scores and component scores increased from 5 to 15 points. At the fund level, 13 entities scored the maximum 100 for the management component, while only two saw score decreases. For assets, the average GRESB score increase was 10 points, largely coming from the performance component.
The infrastructure assessment also highlighted areas in need of improvement. Diversity showed little to no improvement across funds and assets: the average fund had an employee gender ratio of 40:60, between women and men, and only 28% of funds’ governance and management roles were filled by women.
GRESB also found that fund managers often set Scope 1 and 2 GHG targets for at least one asset in their fund (57%), but only 23% of funds participating in the assessment had an asset in their portfolio with a net-zero target. Even fewer (9%) had set science-based targets.
Fund managers representing just over 40% of all reporting assets became signatories to the Net Zero Asset Managers commitment in December 2020. GRESB said it expected the number of net-zero targets to spike in the coming years, as assessment reporting began to reflect these commitments.
“The infrastructure industry continues to make significant progress in its approach to ESG, with GRESB participation growing year over year,” said Sebastien Roussotte, CEO of GRESB.
“We are proud to see the industry deepen its commitment to ESG transparency and continue improving overall performance.”