At a time when Australian business is readying for the introduction of mandatory climate-related financial reporting under the Australian Sustainability Reporting Standard (ASRS), other sustainability reporting frameworks are also requiring greater rigour in disclosure. For companies and asset owners operating in the property space, investors are seeking to derisk investments with reliable and accurate assessments of ESG performance. As a result, the Global Real Estate Assessment Benchmark (GRESB) reporting framework is also evolving.

Preparing a high-quality dataset for GRESB submission is a challenging undertaking. Not only does GRESB require participants to report detailed data across a wide range of environmental metrics; property companies and funds must also report on their entire portfolio. Ensuring the accuracy, consistency and quality of the data collected from a variety of sources is time-consuming and benefits from ongoing data stewardship.

But the rewards for reporters are also significant. Arguably too, the efforts made to organise and streamline data gathering also support future reporting requirements for ASRS and other sustainability reporting programs.

This article steps you through the process of reporting to GRESB, the complexities involved, and the value that can be unlocked.

What should I know about data collation for GRESB?

GRESB’s methodology validates ESG performance data, sets peer benchmarks and allows for easy comparison across different regions, investment vehicles, and property types. While GRESB’s benchmark scores make evaluation of ESG performance easier for investors, navigating the submission process can be challenging.

Although the supplied GRESB asset spreadsheet provides guidance, it does not cover the complexity that comes with developing a robust dataset - especially the collection and aggregation of asset-level data, which can be a pain point for many businesses. Drawing data that is high quality is key to a successful GRESB submission process.

Figure 1: An overview of GRESB' submission process: as seen in 2024 Real Estate Standard and Reference Guide [1]

GRESB generates two benchmarks addressing different ESG components

Since real estate and infrastructure entities can hold standing investments or development projects, GRESB generates two benchmarks. Entities report to one or both as described in GRESB’s Real Estate Standard and Reference Guide[2]:

• Real Estate Standing Investments Benchmark analyses how the reporting entity has performed on all ESG dimensions. This benchmark examines management and performance components.
• Development Benchmark measures ESG performance during the design, build, and renovation stage of real estate or infrastructure projects. This benchmark looks at the management and development components.

Portfolio-wide requirements increase data complexity

GRESB requires that real estate investors and asset management funds report on their whole portfolio. To clarify, this means reporting on all underlying assets in the portfolio, regardless of ownership percentage. For example, a joint venture, even though the entity does not have direct operational control over the asset(s), is still required to be reported upon. Reporting on the whole portfolio also means that both landlord controlled, and tenant-controlled areas should be included.

This distinction has been made for the following aspects of the performance component: energy, greenhouse gas emissions, water, and waste. With this approach, GRESB recognises that landlords have little to no control over the purchase of utilities for the asset. Datasets must also include all assets held during the reporting year, even if they were only owned for part of the year having been sold or purchased.

Data collation is followed by data validation

After uploading the asset spreadsheet, the data validation process starts. The GRESB portal has real-time error detection, that covers automatic validation, asset location validation and outlier detection. These errors are flagged for participants to check their input data and make necessary corrections. This is no simple exercise. Corrections may require rigorous data analysis to find the underlying discrepancies. This year, Energetics assisted a number of our clients with their GRESB reporting, totalling over 1150 assets across more than 40 funds. Our consultants have spent many hours gathering and verifying data covering consumption, emissions, floor area and vacancy rates.

But from the outset, with the right processes, rigour, and understanding of what is required, reporters can improve their performance in the GRESB benchmarks. Energetics knows how to prepare the data and address any errors. We can help you improve and drive value.

GRESB is based on voluntary disclosure, so what does it offer?

Reporters receive a final benchmark score and insights into their sustainability performance, based on a range of scoring table[3]. The benchmark score is an overall measure that represents how well ESG issues are integrated into the management of the company or the fund.

Achieving a high score and outperforming your peers is the goal. It suggests that your portfolio is more investable as it is better managed from a sustainability perspective and is more likely to remain unaffected as policy changes and the climate worsens.

Reporters receive peer benchmarking which offers insights into how well the entity is performing relative to similar entities in the real estate or infrastructure sector. A score breakdown and detailed description of the score across all ESG dimensions is also provided. As a result, entities can better understand where they’re performing well and areas for improvement, all of which supports the reporter’s profile within the investment community. To understand the reach into the investment community GRESB states that, “More than 170 institutional investors, with over USD 51 trillion AUM, use GRESB data to monitor their investments, engage with their managers, and make decisions that lead to a more sustainable real asset industry”[4].

A robust dataset is the basis for turning strategy into action

In 2023, entities reporting in Oceania performed well, with both GRESB benchmarks scoring above the global average. Participation in the region has also increased by 23%[5].

Australia’s high sustainability standards are pushing the rest of the market to speed up, resulting in sustainability at scale. CEO, Green Building Council of Australia, Davina Rooney, “…some of the world’s best practice in sustainable real estate and infrastructure is found here in Australia”[6]. Reporting under GRESB attracts investor attention; it all starts with high-quality data.

Energetics has been advising and supporting some of Australia’s largest, most complex businesses on sustainability reporting and data management for 40 years. For the fourth year in a row, we have assisted a major real estate client, with 30+ funds, with the GRESB process, from gathering their data (that spans across multiple sectors), to analysing and assisting with addressing technical errors.

Aside from data stewardship, Energetics can support businesses across all aspects of the GRESB journey, from project management of the submission, advising on the quality of evidence against the criteria, to responding to all three components. Together, we partner with our clients to ensure GRESB submissions are straightforward, transparent and defendable.