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8 Tips to Help Real Estate ESG Professionals Finish Strong on GRESB

With just over a month and half left until the 2022 deadline for GRESB, widely recognized as the global standard for portfolio-level real estate ESG reporting, this reputable disclosure is no doubt top of mind for many. You may have heard rumblings from your executive team urging your company to “do GRESB,” or perhaps you are a seasoned veteran reminiscing on your ESG reporting journey. Either way, it’s a natural time to take a step back and orient yourself around what really matters as you push through this final month.  

We’re here to help by reminding you of the greater purpose of all your hard work, and to share some time-tested tips for prioritization that can aid in improving your GRESB score this year and in the years ahead.

GRESB: The ESG Standard for Commercial Real Estate

Before we dive in, let’s remind ourselves of the goal of this important standard and the general topics it covers.

The primary audience of GRESB is investors; the GRESB assessment and score are designed to help investors evaluate the ESG performance of commercial real estate portfolios. Accordingly, the main participants in the GRESB assessment are commercial real estate organizations. While the GRESB standard helps investors manage impact and make strategic decisions, it can therefore also help real estate organizations assess their own performance in the areas that make up ESG.  

The GRESB assessment addresses topics under all three umbrellas of E, S, and G, including diversity, equity, and inclusion and health and wellness, but focuses most heavily on environmental impact and the management and governance of environmental programs. The primary evaluative topics in the environmental category that organizations must report include energy consumption, carbon emissions (Scope 1, 2 and 3), water consumption, and waste diversion.  

Each year, GRESB releases a survey for CRE organizations to fill out and submit by July 1 using performance data from the previous calendar year. GRESB then scores and ranks companies according to their asset classes, ultimately creating a benchmark for real estate portfolios and providing a widely-used point of comparison for investors and capital market participants making real estate investment decisions.

For a complete set of GRESB resources, click here.

Tips for Getting Across the Finish Line

As we approach the July 1 deadline, here are a few tried-and-true tips to help you stay focused and make it to the finish line.

  1. Focus on what you can do this year
    With only a little over a month to go until the GRESB deadline, now is assuredly not the time to conduct an in-depth GRESB gap analysis, only to be overwhelmed with what you don’t have and can’t get. It is fine to take a quick scan of any existing materials, but at this point it’s not wise to overburden yourself with additional detailed tasks that won’t benefit you until the next reporting year. You will have plenty of time once the 2022 reporting season ends to identify those gaps and build your plan for improvement.

  2. Align your priorities with your business – and GRESB
    If you are a first-timer, remember that you can’t do it all in year one. And even if you’re a veteran, your priorities for data collection and reporting should always align first with your organization’s top business priorities. Once you’ve confirmed that they do, you can then further prioritize your efforts based on how GRESB scores each section of the assessment. Not all topics are created equal, so it makes sense to devote the most time and effort to the areas that contribute the most to your score. The most heavily weighted categories are as follows:

  3. Energy Consumption: 20% of your score in the Performance Indicators section, so focusing on energy is well worth your time. Specifically, you should ensure that you have robust, accurate consumption data for the buildings you are reporting on.
  4. Policies: 15% of your total score in the Management section cover ESG policies
  5. GHG Emissions: 10% of your score in the Performance Indicators section
  6. Water: 10% of your score in the Performance Indicators section

  7. Review your reporting boundaries carefully
    Take a quick scan of your portfolio and make sure that you’ve captured all of the buildings you are required to report on. Cross-reference against a list of acquisitions and dispositions, and make sure you are reporting assets you owned and which were operational for any period of time in the reporting year (2021). When in doubt, better to report than not!
  1. Review your data coverage
    Simply put, data coverage is the amount of data you are able to report by square foot area of a building/portfolio, relative to the total floor area of a building/portfolio. Data coverage as a percentage therefore gives you (and investors) a sense for how comprehensively you are measuring and managing your portfolio’s energy consumption. Data coverage is calculated and scored separately for managed assets and indirectly managed assets, but is important to focus on overall because it is one of the most highly-weighted KPIs in the Performance Indicators section.
  1. Prioritize filling utility data gaps for larger buildings (by square foot) first
    Since data coverage is calculated based on total floor area, and not by number of assets, targeting the largest buildings in your portfolio with the greatest floor area will help you increase your overall absolute data coverage score. Within this population, focus on the buildings where you actually pay the bills or have direct access to meter data. This ensures you can focus first on gathering the data you can access rather than having to request authorization for tenant-controlled accounts.
  1. Organize your supporting documents and evidence
    This might sound obvious, but good document management practices are a must (and a saving grace) during this often chaotic period. Make sure you have a centralized, readily accessible location for written responses, supporting evidence, and quantitative data, like the utility data needed to report energy consumption at the asset and portfolio levels, and that folders and files are labeled clearly. A well-organized system you can refer back to will pay dividends this year and beyond.
  1. Set clear internal deadlines for data collection
    Since ESG crosses disciplines and organizational departments, you will undoubtedly have to request data from multiple internal sources. Asset Management and/or Accounting teams may have easier access to bills and established relationships with tenants to request bills. Building Engineers will have access to meter data and other building-specific information. Human Resources will have access to some of your social data.  And your management teams are likely responsible for organizational governance policies. You may have to work with all of these groups to get the information you need to report to GRESB, so it is incredibly important that you dust off your project manager hat and set clear internal deadlines with all the relevant teams. Don’t be afraid to set a firm line or to ask for support from executives in encouraging responsiveness and participation.

Aquicore is proud to partner with GRESB and can help you automate energy data collection across your portfolio to increase your data coverage and make reporting faster and easier. Learn more here.

Final Thoughts

You’re almost there! While the stakes may feel even higher this year as the industry’s focus on ESG continues to grow, keep in mind the old saying, “progress, not perfection.” Push yourself and your organization to do your best, and continue to balance quality and quantity. When you come up for air, take a step back and consider how you can improve your ESG data collection and management processes for easier reporting for next year.

For now, carry on – and look forward to the summer days ahead!