Last year, I wrote about the Global Real Estate Sustainability Benchmark (GRESB), its importance for investors in real estate, and how we use GRESB as a waypoint and as a measure of our progress on environmental, social, and governance (ESG) issues. Today – a quick update….
GRESB has seen an ever-increasing number of participants, and just posted its largest participation ever. More than 850 reporting entities took part in GRESB reporting in 2017, representing 77,000 properties and $3.7 trillion in assets under management.
Additionally, GRESB has been expanding its scope towards the real estate debt world, with the release of its second annual GRESB Debt Assessment in 2017. Participation in the Debt Assessment increased by 39% in 2017. This year’s assessment ranked the ESG practices of 25 participating entities: banks, real estate debt funds, mortgage REITs, and other direct investors. According to GRESB, “the average GRESB Score increased by 16%…signaling that more participants are integrating ESG into their lending approach.” GRESB’s new attention to the debt side of real estate has us thinking about how we may use the GRESB Debt Assessment in the future.
2017 has also been a big year for Principal Real Estate Investors’ efforts to deliver sustainability for our clients’ real estate portfolios. We achieved our second consecutive ENERGY STAR Partner of the Year Award, and we received our first A+ band United Nations Principles for Responsible Investment (UN PRI) rating – the highest score given to participating organizations – building off of two previous A ratings in 2015 and 2016. This helps showcase the importance that the world, and our clients, put on sustainability efforts.
To top it off, Principal Real Estate Investors received Green Star ratings for the fourth straight year, and 4-star rankings for the second straight year for both funds submitted to the GRESB. Both funds received perfect scores in categories related to sustainability management and policy & disclosure, as well as near-perfect scores in the stakeholder engagement category.
With 2018 just over the horizon, we’re looking forward to where GRESB will take real estate sustainability in the future. Their continued success in drawing attention to the importance of ESG issues will help investors around the world unlock the potential that sustainability can bring to this asset class.
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