The 2015 Canadian GRESB Results are in and the 11 Canadian organizations that submitted the survey fared quite well. Oxford and Bentall Kennedy continue to show leadership, placing 1st in their respective categories and the list of first time GRESB submissions continues to grow (This year Triovest reported for the first time). Still, several more organizations have submitted through the grace period (the survey is submitted but the results are not public) and plan to submit survey responses in 2016.
Changing the Landscape:
It was noted at the 2015 Canadian Results Release that GRESB has transformed the landscape that energy efficiency will be operating as organizations are now looking beyond 1 or 2 year paybacks, to 5 and even 10 year paybacks – Organizations are becoming more forward looking in terms of sustainability, energy efficiency, health and wellness, the list goes on – These features will pay dividends not only in emerging regulations like building labelling in Toronto, but also current and future GRESB submissions.
While Canada fared better than North America as a whole, Australia and New Zealand still remain the global leaders. Looking at the individual aspect score breakdowns (see end for full results) provides additional insight into where the participating Canadian CRE organizations strengths lie.
Canadian firms have robust management strategies in place to address ESG concerns (Scoring 83 vs the global average of 71), however it is clear that with regards to performance indicators, there is much room for improvement (Cdn. Scored 51 vs the global avg. of 38).
Operationalizing management practices from the top down is difficult, especially when sustainability specific staff managing national operations at any CRE organization is limited. Yet progress is possible and had been made in several areas – with Canada fairing strongly in Risks & Opportunities, and greatly outperforming the globe on the topic of stakeholder engagement with a score of 74 vs the global avg. of 53.
Measurement improvements will be the next key issue to improve upon in 2016 and this fits hand-in-hand with performance. You don’t manage what you don’t measure so benchmarking and monitoring programs are important in setting a precedent for performance improvements. Both the measurement and performance areas will provide Canadian CRE organizations with an opportunity to show continual improvement to stakeholders in 2016.
Moving Forward: How GRESB is changing the industry
Moving forward, although GRESB will adjust scoring in the measurement category to account for such high scores across the board in 2015, performance and measurement are likely to be good indicators of how leading firms continue to lead, while also bringing to light emerging leaders in the CRE industry.
The Global Real Estate Sustainability Benchmark [(GRESB) more at– www.gresb.com] has emerged as the dominant reporting framework for the real estate portfolio performance in North America. Specific questions go into greater depth than what is available through CDP and scoring is based on a geographic peer-based ranking system where organizations score within 4 quadrants, ranging from Green Starters to Green Stars. From the asset owner standpoint – GRESB aligns with UN PRI – which in Canada includes over 26 Asset owner signatories.
The emphasis on ESG performance metrics for investors has added an additional layer of transparency of how Property Management firms operate and the environmental management practices in place throughout a portfolio. Analysts are increasingly incorporating ESG factors into financial models for companies under coverage to assess and predict performance. Additionally, performance can be assessed and tracked against the annual GRESB Survey Results.
The implications have trickle down effects at the property level. This can range from corporate energy, water, waste or GHG mandates to corporate wide targets. Support from large pension fund investors for investment in energy efficiency measures with longer perspective paybacks is also something that may become more.
The Performance Indicators Section covers the actual operational and performance aspects within a portfolio. With regards to data, GRESB supports Energy Star Portfolio Manager data transfer for GRESB submissions. The second aspect of Performance indicators is data coverage – which would include real time data availability and sub-metering systems in place as well as overall availability of data. With one of the weakest scores in the 2015 survey results, there is a lot of room for improvement in the Performance Indicators section (This is second only to Building Certifications).
As GRESB rapidly cements itself as the standard for real estate portfolio ESG performance assessment, around the world, we can expect to see increasing emphasis on energy management efforts.
Special appreciation to Kyle Pinto for his work in putting the above article together.
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Canadian Aspect Scores vs Global Average
Management: CDN: 83, Global. Avg: 71
Policy and Disclosure: CDN: 76, Global Avg: 57
Risks and Opportunities: CDN: 81, Global Avg. 71
Monitoring and EMS: CDN: 64, Global Avg. 57
Performance Indicators: CDN: 51, Global Avg. 38
Building Certifications: CDN: 48, Global Avg. 36
Stakeholder Engagement: CDN: 74, Global Avg. 53
New Construction and Major Renovations: CDN: 52, Global Avg. 38
Source: GRESB 2015 Results Release Presentation, Chris Pyke, COO GREB. Sept 15, 2015.
This entry was posted on October 8, 2015 by Kyle Pinto. Kyle is in charge of Sustainability Strategy and Implementation and heads our sustainability service offerings.