Smart, Standardised ESG Performance Through GRESB
Environmental, social, governance (ESG) is an imperative measure of performance – as made evident from a growing number of countries with mandated ESG reporting. However, greenwashing, poor-quality reporting, and patchy disclosures make smart processes an important tool to cut through the rhetoric for meaningful, actionable reporting.
GRESB is a body that is working for uniformity, transparency, and widespread adoption of ESG around the world for real estate and infrastructure. GRESB is an independent organisation that aims to standardise ESG reporting through validated performance data and benchmarks. This improves business intelligence, engagement, and regulatory reporting for stakeholders.
According to a 2022 study, 89% of investors consider ESG as part of their investment approach. For investors, buildings that are resource-efficient and sustainable present undeniable financial benefits and resilience around a changing world and shifting regulation.
In the race to 2050 and net-zero – and as regulations tighten around climate change and social priorities – digital transformation and the use of smart technologies are fundamental in guiding sustainable ESG practices in built environments. In this blog, we look at GRESB assessments and ESG reporting. We also outline how smart technologies like those from Smarter Technologies Group simplify complex data collection and analysis for meaningful changes around ESG goals.
What does GRESB stand for?
GRESB was initially an acronym for ‘Global Real Estate Sustainability Benchmark’. In 2015, they extended their focus to include real asset infrastructure and so GRESB became their name rather than an acronym.
What are the three components of GRESB?
A GRESB assessment evaluates ESG performance against three components: management, performance, and development. The methodology applied is uniform across different jurisdictions, property types, and investment vehicles. It also works with existing frameworks like GRI and PRI.
The assessment provides participants with business intelligence on their ESG standing, compares performance to industry peers, and creates an ESG roadmap. For investors, this assists in weighing up and monitoring ESG-related risks and opportunities within their portfolios.
GRESB assessments are guided by issues that are material to investors – and engagement is key to their relevance. According to the 2023 Real Estate Standard and Reference Guide, GRESB’s 2022 real estate benchmarks covered more than 1800 property companies, REITs, and investment funds and assets. GRESB represents $8.6 trillion in assets.
Within the components, GRESB assessed myriad metrics including energy consumption, water usage, waste management, carbon emissions, and environmental policy.
What is the difference between GRI and GRESB?
The Global Reporting Initiative (GRI) is one of the international frameworks that GRESB most frequently engages with. GRESB and GRI are also aligned on environmental topics. The GRI standards are broader in scope than GRESB’s for the purposes of assessments. Additionally, some topics in the GRESB standards are sector-specific and so are not covered by GRI.
What does the GRESB score mean?
A GRESB score is performance represented as a percentage. A high GRESB score indicates a robust ESG framework. This is attractive to investors, is a strong marketable point, and is indicative of resilience around tightening regulations and business contexts. GRESB assessments also identify ESG risks and opportunities. GRESB also sets industry benchmarks with proactive steps to reduce risk.
GRESB ESG reporting and smart technologies
Preparation for a GRESB assessment can be a resource-intensive and time-consuming undertaking. It involves complex data from multiple sources and pertaining to sustainability concerns. In operations with multi-site locations, uniformity of data collection for accurate reporting is a challenge.
Data is critical to meaningful ESG reporting within the GRESB context. To report on focus metrics, the more granular the better.
The first step is to set a reporting framework and ensure the reliability of data for collection and reporting. Smart Technologies Group’s smart building technologies collect complex data, which is securely sent to a remotely-accessible, cloud-based SmarterView dashboard.
Through a network of smart sensors, pressure pads, and gateways, whole-operations data is collected in real time. This data can then be analysed for consistent reporting. When it comes to ESG strategy, IoT smart technologies are powerful digital tools for data-driven decision-making
Many factors are considered under the environmental dimension of ESG for GRESB. However, overarching metrics include greenhouse gas emissions, energy consumption and efficiency, and water consumption and waste.
Data insights drive digital transformation around environmental practices and policies in many ways. Smart energy, sub-metering, and smart water management, for example, simplify the monitoring and identification of potential savings and guide changes for minimal disruption and maximum efficiency.
More responsive buildings also reduce wastage. By adopting automated processes around lighting and heating, these areas can be optimised around occupancy and prevailing conditions for boosted efficiencies.
Data monitoring and optimisation can be implemented throughout entire supply chains to mitigate waste in as many ways as possible – and according to sector. ESG changes can be mapped and monitored over time with detailed accuracy and with comprehensive reporting abilities.
The GRESB Social Risk and Resilience Module takes the social dimension of ESG beyond physical and financial risk. This module is strongly aligned with the TCFD and includes a combination of risks. Social risks that came out in 2020 included things like crime, workplace health and safety, cybersecurity, and physical security. This is in addition to the human impact of environmental risk, anthropogenic hazards, and points of social vulnerability.
Smart technologies have the potential to positively impact issues around social risks. Real-time data monitoring, with pre-programmable alerts for undesirable changes, inspire high-level reaction to risks. As connected environments, smart buildings and smart cities hold many benefits around safety and wellbeing of citizens.
In buildings, these benefits include everything from fire safety to air quality monitoring and legionella auto flush capabilities to prevent illness. The cybersecurity features of zero-trust models also afford protection to building occupants around cyber threats and data breaches.
Smart technologies have potential benefits for GRESB reporting for governance. Cybersecurity and data protection are a couple of areas of input here. Of additional consideration are the role of real-time data reporting on transparency, as well as evidenced risk management, values alignment, and the alignment between policies and practice.
Work with Smarter Technologies Group for ESG and GRESB
IoT smart building technologies from Smarter Technologies Group are the simple, scalable way to maximise the value of real assets and real estate assets. With a wave of mandatory and voluntary ESG reporting regulations evolving around the world, use building data for ESG monitoring and reporting. Contact Smarter Technologies Group for more information.