Last month we blogged about the increasing adoption of the Global Real Estate Sustainability Benchmark (GRESB) by real estate companies such as REITs, and asked for feedback about reporting challenges. As of April 1, the 2014 GRESB survey is now open, and we’d like to share our findings to make this year’s annual reporting a little easier.
Are you unsure whether you are going to report to GRESB in 2014? Read on for tips that will help you to communicate sustainability to your investors and get ready for future GRESB reporting.
Collecting Performance Data Isn’t Easy
The results are in: one of the biggest GRESB reporting challenges identified by REITs, is collecting detailed utility data from their geographic regions, in the same format, using common metrics, from both the owner-controlled and tenant-controlled portions of their assets.
Not only is there considerable staff effort required every year during the reporting period (some reported 200-300 hours even for relatively small portfolios), many companies also struggle with assembling data requested by GRESB. In our poll, we found that the most common GRESB challenges were:
- Analysis and synthesis of utility data (36%)
- Reporting performance indicators per the GRESB asset classifications and format (27%)
- Communication within organizations to collect data (18%)
- Obtaining utility data from portfolio properties (18%)
Streamline the Reporting Process
Just starting the reporting process can be daunting. Here are our tips to simplify the effort:
- Start as early as possible. You’ll need a few months before the July 1st deadline to collect, analyze, synthesize, and double-check data before entering it into the survey.
- Get the right person on the job. Have a dedicated project manager (either internal or external) manage the utility data collection, analysis, and synthesis process.
- Start with the basics. Make sure you understand GRESB’s requirements, and consider attending the GRESB webinar in April to learn about the survey.
- Once you understand the basic guidelines, determine what really matters. Establish materiality guidelines early, and apply these throughout the analysis.
- Consistency is paramount! At the end of the day, your indicators don’t have to be correct to three decimal places but the process must be consistent. Good questions to ask are, how are we reporting square footages? Are we all using the same units to report water consumption? What assumptions will apply across the portfolio?
- Don’t blindly trust the data! Interview each fund or regional manager to gather context about their assets before diving in.
- No need to reinvent the wheel. Use an existing template or tool that streamlines analysis and synthesis. This will be the most time-consuming step. Don’t ‘wing it’.
- Expect the unexpected. Establish a schedule that leaves time to finalize the survey response. Like most projects where you need to gather data, context and information from multiple sources and stakeholders, reporting to GRESB takes longer than you think.
Keep on Schedule
How long is the process of applying to GRESB? Here’s an example schedule we’ve used to ensure successful GRESB submission in advance of the July 1st deadline:
- Discovery phase: 2-3 weeks
- Analysis phase: 2-3 weeks (can be concurrent with Discovery)
- Synthesis phase: 1-2 weeks
- External Assurance: 1 week (can be concurrent with Synthesis)
- Final check and Submission: 1 week
How to Report Sustainability Value Creation and Risk Mitigation to Investors
Investors are increasingly requesting participation in GRESB. If you’re not responding to the GRESB survey yet, it’s worthwhile to be prepared so you’re not scrambling when the time comes.
Set your company up for successful reporting in the future:
- Gain the support of your company’s leadership team to establish best practices that will enable you to optimize your portfolio’s performance.
- Establish a standardized, company-wide system for regular utility data collection, such as an online bill pay provider platform, and ensure that each region appoints a manager, responsible for uploading monthly bill data. You can only manage what you measure.
Push your organization to move beyond compliance toward optimization:
- Put your sustainability reporting results to work. Use them to identify the best ways to improve.
- Focus on what you can control.
- Identify beneficial tactics that can be operationalized, for long-term effectiveness.
- Determine the best ways to communicate potential paybacks for improvements, both tangible (such as energy savings) and intangible (such as tenant attraction and retention).
Ensure you’re providing the most material information to investors:
- Provide data points that champion your sustainability efforts.
- Outline your policies and best practices.
- Provide results for significant upgrade efforts, particularly for improving underperforming assets.
- Highlight positive outcomes for the properties which your company directly manages.
- Brag a little (or a lot). Emphasize the efforts your organization has made to improve past results.
Want to Know What’s New with the 2014 GRESB survey?
Take a look at our related blog post to read about the main changes in this year’s survey.
Brad Pease, AIA, LEED AP BD+C is Director of the firm’s Signature Buildings Practice.
Lexy Relph, PE, LEED AP, is a Sustainable Business Consultant.