GRESB launches real estate debt survey, rates lenders on ESG

Global Real Estate Sustainability Benchmark (GRESB) has launched its first debt survey, with participants including Aviva Investors, DRC Capital, Hermes Investment Management, M3 Capital Partners, Mesa West Capital, Pramerica, TH Real Estate, UBS and Walton Street.

The funds have more than $5bn (€4.6bn) in assets under management and cover 127 senior (52%), subordinated (38%) and whole (10%) loans, split 70/30 between Europe and the US.

Participants were scored on six areas: policy, risks, management, due diligence, opportunities and monitoring.

GRESB said the survey showed growing appreciation for the importance of environmental, social and governance (ESG) information for fixed income investors, with respondents scoring highest on their social issues (65), followed by environment (43) and governance (38).

The average debt score was 42.

The Amsterdam-based body said its survey provided investors in debt funds, as well as debt fund managers, with a new platform for systematic assessment, objective scoring and peer benchmarking of sustainability information.

Sara Anzinger, real estate debt and fixed income manager at GRESB, said: “Given the outsized role lenders play in providing capital for real estate investment, we want to encourage their engagement in the sustainability debate, not only because investors value participation and transparency but because lenders can begin to utilise ESG data to better manage downside risks.”

John Gellatly, head of Europe at Aviva Investors’s real estate multi-manager team, added: “We are pleased GRESB has developed a new sustainability assessment for real estate lenders, which will provide greater insight into the ESG performance of real estate debt funds.”

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