It’s encouraging that the recently released 2013 Global Real Estate Sustainability Benchmark Survey (GRESB) disclosed that companies are responding to demands from investors to become more accountable in incorporating sustainability into their business practices.
The North American real estate industry showed a sharp increase in adoption: not only did the number of respondents increase by more than 60% over 2012, almost one-third were ranked as Green Stars, scoring high in policy, implementation, and measurement.
However, there is still room for improvement. The number of Green Star companies is higher in Europe and Australia, where there has been greater commitment to participating in GRESB since its inception.
GRESB = Accountability
Investors are increasingly requiring companies to report to GRESB as a way to demonstrate accountability for incorporating sustainability into business practices.
Phil Clark, Head of Property Investment for AEGON Group’s Kames Capital, was quoted in a GRESB news release, “We believe that there is sufficient data available to show that sustainability, and especially environmental matters, are increasing their impact when forecasting investment returns. Being part of GRESB helps build our knowledge of these matters amongst like-minded investors that share that view.”
By standardizing the type of information that companies collect and report, investors can compare a company’s sustainability efforts and impact. For the real estate industry, GRESB provides a comprehensive and buildings-focused platform to ensure that the relevant information is clearly communicated.
The GRESB survey requests information on a wide array of sustainability issues, including policies and best practices; proven program results; and detailed and consistent utility data collection and analysis.
Top-scoring companies must be accountable in all aspects of the business, from management-driven policies and objectives, to building management and operations.
Hard Work Pays Off
GRESB reporting necessitates a substantial level of effort by respondents each year. As we discussed in an earlier Abundance blog post, the 2013 reporting requirements added some complexity.
GRESB assumes companies will have fully integrated their reported practices into business operations and policies. Companies that have systematized sustainability into their organizations – particularly in terms of utility data collection, measurement, and analytics, as well as policy development and implementation – will have had an easier time preparing their survey responses this year.
Companies without comprehensive sustainability programs had to invest additional effort to collect and process all the required information. This likely included stakeholder engagement at all levels of the organization, multi-regional coordination with building and property managers, extensive data collection and processing, and deciphering of the GRESB survey questions.
Over two or three stressful months of survey data aggregation, companies can invest hundreds of hours and thousands of dollars to prepare the responses, but an improved score or Green Star ranking makes it all worthwhile.
As Nils Kok, GRESB’s Executive Director detailed in a recent blog post, investors can be reassured that Green Star companies have proven themselves to be well-protected against environmental volatility, making them ideal candidates for investments.
Think Beyond Reporting
The GRESB survey must be completed annually. If you’re already panicking about the next reporting period, consider GRESB as more than just a make-work exercise; it’s an opportunity to implement meaningful and impactful sustainability initiatives. Our suggestions:
Examine the areas where your company could improve.
- Do those areas align with corporate priorities?
- Are there any potential quick-wins?
- Are there any red flags that need to be addressed immediately?
- Could the score have been improved with better communication?
Review the best practices proposed in the survey questions and re-examine your responses.
- Are there elements that could be easily incorporated into business operations right now?
- Is there an opportunity to establish objectives and goals for a variety of metrics?
- Can policies already in place on an ad-hoc basis be systematized?
- Are you fully reporting value creation and risk mitigation to your investors?
Prioritize the business elements to streamline future reporting, improve next year’s score, or increase your company’s impact.
- Are your regions already implementing great practices, some of which could be rolled out company-wide?
- Is cross-company communication a major roadblock?
- Should upgraded utility data tracking and measurement be a focus?
- Do you have a plan for performing data analytics?
Celebrate your success.
- If your score improved, or you are a Green Star, communicate your achievement internally and externally.
For more information about GRESB, please see our related posts: