The Global Real Estate Sustainability Benchmark (GRESB) has become a respected standard for real estate owners, asset managers, and developers to report and measure their sustainability performance.
If your company participates in GRESB reporting, this is a big week! Results are coming in and you are finally able to see how your company scored and ranks against its peers.
GRESB reporting requires a lot of work, and it’s worth it. A GRESB report helps property owners and their investors evaluate their sustainability performance against their global peers and it identifies opportunities for improvement. Plus, a REIT’s GRESB score has real top line impact because a high GRESB score is often a key criteria for investor interest and real estate portfolio valuation.
Be careful, though – avoid the temptation to pat yourself on the back for a job well done and shove the report in a drawer, planning to dig into it later to discover improvement opportunities for the next reporting cycle.
Resist the temptation to do nothing!
In year one, it’s ok to celebrate participation and a reasonably competitive score, but that story doesn’t hold as years roll by if your REIT’s GRESB score stays flat. Continual improvement should be top of mind, if your real estate company wants to stay competitive.
According to Director of Sustainability and Corporate Responsibility for Forest City Realty Trust, Jill Ziegler, ”The needle is always moving among our peers, so we need to ensure continuous improvement.” As more users come into the GRESB reporting arena, those who have shown strong performance in the past may find themselves in a lower scoring tier. There is no finish line – every class is graded on a curve.
So you know you should be improving continuously, but knowing what to improve and when can be a difficult web to untangle. Property teams operate differently in various regions; investors ask for different data; and internal priorities for the coming year can be in flux during budgeting season.
How to start improving your 2017 GRESB score now!
There’s never a better time than right now to jump on your GRESB results and start working on improvements. The improvements will benefit your business and its operations with the added bonus of a potentially higher GRESB score next year.
Now is the time to complete ASHRAE energy audits, review policies, back-check the data, and focus on areas where improvement is most feasible.
Carefully consider the GRESB results and use it as a planning tool. As budget season starts, you should prioritize the projects that will get funding and anticipate how they might be part of your REIT’s GRESB score improvement plan.
Every dollar that’s spent on property improvement should reduce operating costs, lower GHG, and improve your GRESB scores!
This is also the right time to evaluate your tools, consultants, and reporting infrastructure. Ziegler says her organization netted several ah-ha’s from the GRESB reporting process. “We quickly learned that having a good data management system is crucial, especially for a diverse national portfolio like Forest City’s which has several asset types. The first year we reported, we were heavily dependent on Excel, but in the 2nd and 3rd years, we revamped our data management system and processes, which saved a lot of time and boosted our confidence in the data. We also memorialized our GHG, energy, and water tracking methodology and reporting processes via an internal Inventory Management Plan, which is a critical reference as we prepare reports and maintain data consistency.”
Whether you are a veteran reporter or new to the game, NAREIT, which is the worldwide representative voice for REITs, indicates that the most targeted improvement areas focus on lighting and controls. Some of NAREIT’s recommendations for improvement strategies that impact operational costs include:
- Review control sequence to simply turn off lights when not needed.
- Address plug load management
- Install vacancy sensors
- Re-lamp to high efficiency output fluorescents or (better yet) switch to LED fixtures
- Convert to LED lighting for site lighting
- Domestic Hot water:
- Install ultra-low consumption water fixtures
- Consider solar thermal systems for hot water
- Install real-time monitoring equipment (wireless technology makes this a cheaper investment now)
Knowledge is power, and that is 100 percent true for corporate reporting. Sustainability Manager at Federal Realty Investment Realty (FRIT), Chris Brown says it best. “Participating in a real estate focused reporting platform like GRESB is a valuable exercise, in that it provides focus on measuring what matters for our business. Collecting quality ESG data supports business decision making, improves cash flows, and helps manage stakeholder relationships in different and beneficial ways.” He continues, “Communicating your sustainability efforts and actions gives important insight about the quality of the management team and our ability to tackle the way we impact the planet.”
Spend some quality time reviewing your GRESB report today, and commit to an improvement. Outline the improvement plan this month, while the information is fresh. The clock on next year’s submission is already ticking, and the implications of your company’s GRESB score extend to the topline, bottom line, and the people who use your buildings. So set stretch goals and achieve results beyond current expectations for next year!
And of course, Paladino is here to help. Contact us any time.
Want to learn more about GRESB? Here are some of our past articles on the topic:
- Are you ready for GRESB?
- GRESB Results show uptick in adoption of sustainability benchmarking
- Managing Big Data for GRESB reporting
- Which CSR reporting framework is right for your company?
- Wellness comes to GRESB