GRESB has launched its 2020 Real Estate Assessment. GRESB is the leading global Environmental, Social and Governance (ESG) benchmark for the real estate and infrastructure industries. It is a voluntary assessment scheme covering USD 4.5 trillion worth of assets. It gathers data at an asset level and allows for benchmarking against peers. The reports produced at the end of the process make recommendations to improve ESG performance.
The submission deadline for the 2020 assessment is 1 July. Compiling accurate data, information and evidence for the GRESB submission can be time consuming so participants in the process would be advised to try to put systems in place to make this easier.
If you are seeking to make improvements in the ESG sphere, you may consider doing the following:
- Keep data on an asset level. In particular, the assessment asks for consumption data covering both “Landlord Controlled” and “Tenant Controlled” areas (where a particular asset may comprise both landlord and tenant controlled areas). Note that this is different to previous years, where individual asset were labelled either “Managed” or “Indirectly Managed”.
- Review your ESG targets, commitments, policies and procedures and ensure that these are truly embedded in your organisation, at all levels.
- Review your leases so that they include ESG provisions. Most modern leases have simple sustainability clauses requiring the information-sharing, but this could go further, covering wider ESG concerns, setting joint landlord/tenant performance standards, and setting standards relating to fit-out and refurbishment.
- Incorporate ESG provisions in development agreements reaching further than planning conditions.
- Carry out ESG due diligence on acquisitions. Raise enquiries to obtain essential ESG data.
In terms of the assessment itself, there are three sections:
- Management: Each participant will need to complete this section. It asks questions at an entity level about your ESG commitments, objectives, policies and stakeholder engagement. It also questions how ESG decisions are made and filtered through your organisation and supply chains. It asks questions about risk management (both environmental and broader, including “socio-economic”, which would include pandemics) both for existing assets and on acquisitions.
- Performance: You only need to answer this section if you hold standing investments. They ask for information at an asset level about risk assessments, implementation of efficiency measures, tenant engagement (including green leases and fit out/refurbishment controls), building certifications (which include BREEAM and WELL Building Standard) and energy ratings (which include EPCs). They ask for data on energy and water consumption (including renewable energy) and waste management and ask whether this is independently verified.
- Development: You only need to answer this section if you have development projects which are either on-going or which have completed during the year. It asks how ESG strategies feed into the design and construction phases of new developments, including decisions over site selection. It requires information about materials and design features. It also asks about waste management during construction and stakeholder engagement, particularly health and wellbeing on site.
Earlier this year CMS became GRESB’s first law firm partner. If you would like further advice on or support with the process, please contact us at CMS.