It may seem like the year just got started, but next year is on our mind, especially in terms of corporate reporting. In the past, companies could make CSR reports in any format they liked, but now investors, customers, and employees increasingly demand more transparent and 3rd party verified platforms like GRESB, CDP, and GRI to track and report progress toward company goals for sustainability, GHG emissions, and portfolio performance.
Rankings are increasingly used in investor-facing reports to communicate sustainability leadership along with energy, water, and waste reduction efforts. Financial analysts use the third-party scores as another data point to measure the investment caliber of a portfolio or stock. So the stakes are high.
Putting together accurate, transparent, and engaging reporting is a daunting effort. But every journey begins with a single step! And for reporting, that first step is choosing the right framework. The countless people who are finalizing their GRESB, CDP, and GRI reports now can tell you that it makes a big difference if you get this right.
Not all Frameworks are Created Equal
There are several frameworks to choose from, and there are pros and cons for each. The key is finding the one that’s perfect for your organization. At Paladino we use a variety of frameworks and tailor our approach to each client. And while the frameworks are all flexible, we find there are some specific uses that are better fits than others.
The Top Contenders
At its heart, GRESB is about building portfolios, building performance, and the companies that own them. The Global Real Estate Sustainability Benchmark (GRESB) is a platform that allows large real estate portfolios such as real estate investment trusts (REITs) and funds to voluntarily self-report sustainability policies, practices, and portfolio-wide utility data performance metrics. The reported information is evaluated by GRESB and ranked against other portfolios reporting through the program.
This platform is great if you own multiple properties and intend to improve your sustainability results, energy and water efficiency, tenant programs, and other portfolio aspects year-over-year. A big bonus is the report you receive with your score, which shows how you rank among your peers (other similar companies that report to GRESB). Private companies are good candidates, because GRESB won’t report your ranking to anyone.
For REITs, the value in GRESB above many other reporting systems is that it is industry-specific and addresses multiple asset classes.
CDP is mainly a platform to report on organizations’ carbon emissions. Formerly known as the Carbon Disclosure Program, The CDP is an organization which works with corporations internationally to help them ensure that an effective carbon emissions / reductions strategy is made integral to their business.
You might consider reporting to the CDP if climate risk is a major concern to your leadership and/or investors. This reporting framework rewards thoughtful analysis and planning in addition to disclosing carbon impacts, so a strong legal, operations, and risk management team could put together a stellar response.
Unlike CDP and GRESB, which are tailored to specific types of organizations, GRI is more general and can be widely applied to almost any kind of company. GRI is an international independent standards organization that helps businesses, governments, and other organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption.
If you’re a company that already puts together an annual report, and you’re ready to take it to the next level, GRI can help you add some oomph and credibility; and may prompt you to consider aspects of your business you hadn’t investigated before.
There are other frameworks of course such as SASB, Baldridge, and Balanced Scorecard, and each has its own use and value. Regardless of which framework you choose, try to stick with the same one for at least three years to demonstrate improvement. Comparing scores across platforms is extremely difficult.
We have several resources for anyone who needs help putting together an impressive response.
- Are you ready for GRESB?
- GRESB results show uptick in adoption of sustainability benchmarking
- It’s GRESB season!
- Managing Big Data for GRESB Reporting
- Exciting changes for the 2014 GRESB Survey
- Funding sustainability – Green Bonds on the rise
- A real estate strategy in response to climate change will create business value
At Paladino, we help companies put their best foot forward using reporting platforms like GRESB, CDP, and GRI every day. For help with performance improvement ideas, drafting a response, running the numbers, reviewing your draft response, or managing the whole CSR reporting process, reach out to one of our experts.