GRESB 2015 Results: Global Real Estate Industry Significantly Reduces Carbon Footprint

Dan Winters

Today marks the release of the 2015 GRESB Results where the key finding is the uptick in implementing energy efficiency measures by the global real estate sector leading to a decrease in green house gas emissions.

The data is based on an assessment of 707 property companies and private equity real estate funds representing 61,000 assets and USD 2.3 trillion in asset value. The report contains new insights regarding the energy and sustainability performance of the global real estate industry while documenting a 3% reduction in greenhouse gas emissions in 2014, a 50% increase in on-site renewable energy generation and a 19% improvement in overall ESG performance.

This is good news.  The global real estate sector is increasingly integrating environmental, social and governance considerations into corporate policies and business strategy.  More important, the data demonstrates that corporate policy statements and investment strategies are backed by actual implementation of energy and water efficiency programs, and result in demonstrable  sustainability performance improvements.

GRESB 2015 Global Report Highlights:

  • Greater Transparency: 707 companies and funds, representing USD 2.3 trillion and 61,000 assets – an 11% response increase from 2014
  • Better Environmental Performance: on average, the sector achieved a 3.04% reduction in GHG emissions, 2.87% reduction in energy consumption, and a 1.65% reduction in water use
  • Significant Uptake in Renewable Energy: on-site renewable energy generation of 445GWh in 2015 (0.5% of total energy consumption) from 296GWh in 2014

Australia and New Zealand continue to significantly outperform other regions with an average GRESB Score of 69 – compared to a global average of 56.

The GRESB United States Snapshot shows continued year-over-year improvements with solid increases in both management and policy, and implementation and measurement.  While the global sustainability performance of the real estate sector improved across all areas of ESG performance, the U.S. market lags when compared to global peers coming in last in multiple measures of ESG engagement and management practices.  Much work remains and I’m confident many U.S firms will analyze their GRESB 2105 Benchmark Results and begin implementing measures to improve business processes and portfolio risk profiles.

Trends in GRESB data show that sustainability goals and ESG disclosure are now firmly part of mainstream global business practice: 93% of property companies and funds that participate in GRESB incorporate sustainability into business objectives.

With extreme weather events and shifting weather patterns threatening economies and the built environment, 54% of all property companies and funds have policies in place that address climate risks. In addition, the real estate sector increasingly recognizes the health, safety and well-being of occupants, the community, and the supply chain as sources of both risk and opportunity.

This year marked yet another high-water mark for GRESB participation.  The recent reductions in energy, carbon and water consumption achieved by the commercial real estate sector are impressive, yet in absolute terms the sector’s environmental impact is significant and more work remains to be done.

Dan Winters
Dan Winters is GRESB's Head of North America