GRESB: Half of world's 'Green Stars' are in Europe

Fifty-three European property companies and funds were designated as ‘Green Stars’ in this year's GRESB report, almost half of the total number worldwide. Read more about the report's findings below.

Legal and General Property has emerged as one of the leading Green Stars in Europe in the 2013 annual report published by the Global Real Estate Sustainability Benchmark based in Amsterdam.

The London-based property subsidiary of the UK insurer topped three sector rankings in the private fund segment: industrial, diversified and diversified office/residential. CBRE Global Investors topped two European sector rankings in the private fund category this year with its Dutch office fund and Dutch residential fund. Unibail-Rodamco emerged as the green leader of the European listed retail sector.

European stars
In total, GRESB designated 53 European property companies and funds as ‘Green Stars’ this year - almost half of the total number of Green Stars worldwide. Some 61% of European participants are in the Green Talk quadrant, which is considerably higher than the global average of 50% while 20% are still considered ‘Green Starters’. The aggregate benchmark results demonstrate a clear and upward trend in sustainability performance of property companies and funds. In 2013, the average overall GRESB score in Europe came to 44, a 12% increase on 2012.

Within the two dimensions that make up the total score, there has been a 17% improvement in the European score for management & policy, and a 10% increase for implementation & measurement. Currently, more than 50 institutional investors, representing on aggregate $6.1 trn of institutional capital, use the GRESB benchmark results in the various stages of the investment management and engagement process, with a clear goal to optimize the risk/return profile of their real estate investments.

The annual GRESB report also provides insights into the sustainability performance of the real estate industry in other parts of the world. The GRESB database has grown worldwide to include 543 property companies and funds, covering almost 49,000 assets in 46 countries on all continents. As in previous years, the response rate to the GRESB survey is highest in Europe, with 292 participants in 2013, a 16% increase compared to 2012. This year, the benchmark includes 245 non-listed entities and 47 listed property companies, compared to 211 non-listed entities and 40 companies in 2012. Most participants are based in the UK (101), the Netherlands (37), Germany (21), France
(20) and Sweden (12).

But while the European property sector leads worldwide in reporting, it lags in actual reduction of energy consumption, the report found. Importantly, the 2011 to 2012 like-for-like change in energy consumption and GHG emissions was only marginal in Europe, with a decrease of 49,600 MWh (-0.7%) and 19,300 metric tonnes (-0.2%) respectively. Reductions in other regions are considerably higher, demonstrating the need to further improve the efficiency of existing assets in Europe, the authors concluded. Change in water consumption was more noticeable, with a like for like reduction of 583,000 cubic metres (-2%).

Monitoring consumption
Improving the monitoring of resource consumption remains an important issue in Europe, the authors said. Currently, over half of all European participants (59%) use automatic metre readings to monitor energy consumption for an average of 50% of their portfolios, but many property companies and funds still collect data through manual-visual readings.

On another positive note, stakeholder engagement is an increasingly common practice among European property companies and funds, the report found. More than half of participants actively engage with their tenants in different forms, particularly through tenant engagement meetings and by providing the tenant with feedback on energy and consumption as well as waste generation. In total 18% and 12% of participants achieve full portfolio coverage for these programmes respectively.