This document aims to outline the scoring methodology of the 2018 Debt Assessment. It is shared for information purposes in an effort to increase transparency around the Assessment, Methodology and Scoring processes.
How to read this document?
The GRESB Debt Scoring Document provides a visual breakdown of each indicator score included in the 2018 GRESB Debt Assessment. Since it does not include the reporting requirements of indicators, we recommend to read this document in conjunction with the 2018 GRESB Debt Reference Guide, available on our website at www.gresb.com/resources.
Each indicator included in the GRESB Debt Scoring Document is presented in a consistent manner to reflect the 2018 GRESB Debt Reference Guide. In addition to this, numbers documented in red on the left side of each scored indicator have been added to provide the scoring breakdown of that indicator, as well as explanation underneath. Where there is a blue bracket on the left side of each scored indicator, it reflects a diminishing increase in scoring approach being applied, which is described further in the below sccoring section.
Numbers provided on the most left represent the fraction of the total number of points for that indicator that contributing to the overall indicator score, and apply to all options contained within their respective bracket (when applicable).
In addition, numbers provided within brackets represent the fraction of the total number of points for that indicator contributing to the overall indicator score.
Finally, symbols "x" outside (or inside) brackets acts as a multiplier depending on the value associated to it.
"x" can either refer to a validation decision (ex: based on a supporting evidence uploaded by the participant), a percentage number entered by the participant, or a quartile. What this multiplier applies to is documented in the narrative underneath each indicator in the Reference Guide.
Total score of indicator MA1.1 amounts to 2.5 points (p). These 2.5 points are split between:
- Granularity level: three mutually exclusive radio buttons.
- The first accounts for 1/3 of 2.5 points.
- The second = 2/3 of 2.5 points.
- The third = 3/3 of 2.5 points.
- Validation Status of the each Text Box under each radio button. It serves as a multiplier to fraction noted next to each Text Box.
- Full Points = 2/2
- Partial Points = 1/2
- No Points = 0
- Validation Status of the Evidence reported in MA1.1. It serves as a multiplier to all points achieved under the selected radio button.
- Accepted = 2/2
- Partially Accepted = 1/2
- Not Accepted/Not Provided = 0
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Scoring Methodology and Peer Grouping
The scoring model is based on an automated system, deployed via a technology platform designed for GRESB by a third party that specializes in data analysis software development. Following data validation, scoring is completed without manual intervention.
The GRESB Debt Assessment is structured into 6 sustainability Aspects. The weighted combination of points achieved in first five aspects generates the overall GRESB Score. The sixth, Sector-specific Aspect, is not used for the GRESB Score but will be reported separately as a Sector score. This Reference Guide provides detailed insight into the points available for each indicator, and the weighting of Assessment Aspects.
The sum of the scores for each indicator adds up to a maximum of 70 points; the overall GRESB Score is expressed as a percentage – from 0 to 100. To provide additional understanding of performance, the score is divided into two dimensions: Management & Policy (MP) and Implementation & Lender Practices (IL). These scores are visualized using the GRESB Model.
Management & Policy is defined as 'internal processes evidenced by sustainability policies and management procedures adopted by the company, fund or lending unit and connected to one or more actions.' The maximum score for Management & Policy is 32 points – this is 46 percent of the overall GRESB Debt Score, and expressed as a percentage.
Implementation & Lender Practices is defined as 'one or more actions taken to implement specific lending activities and/or the ongoing monitoring of loan portfolio performance indicators.' The maximum score for Implementation & Measurement is 38 points – this is 54 percent of the overall GRESB Score, and expressed as a percentage.
For indicators where you can select one or more sub-options, GRESB awards points cumulatively for each individual sub-option and then aggregates to calculate a final score for the indicator. For many indicators, this final score is capped at a maximum, which means that it is not necessary to select all answer sub-options in order to receive full points. Open text boxes (where participants answer through a descriptive text) may receive full, partial or no points. Points are awarded for valid responses, based on the quality of the responses.
||Policy & Disclosure
||Risks & Opportunities
||Not part of the GRESB Score
||Not part of the GRESB Score
Each of the six Aspects have specific weights and number of points associated. Maximum number of points per Aspect that participants can achieve is equal to the sum of points for underlying indicators. Number of maximum points and Aspect weights are available in this table:
The scores for Management & Policy (MP) and Implementation & Lender Practices (IL) are visualized using the GRESB Model. Depending on the points achieved along each MP and IL axis, each participant falls within one of the four quadrants.
The GRESB Rating is an overall measure of how well ESG issues are integrated into the lending practices of institutional lenders and real estate debt funds.
The rating is based on the GRESB Score and its quintile position relative to the GRESB universe. It is calculated relative to the global performance of all reporting entities - lender type and geography are not taken into account.
The calculation of the GRESB Rating is based on the GRESB Score and its quintile position relative to the GRESB universe, with annual calibration of the model. If the participant is placed in the top quintile, it will have a GRESB 5-star rating; if it ranks in the bottom quintile, it will have a GRESB 1-star rating, etc.
Allocation to E, S, G
GRESB allocates each indicator to one of the three sustainability dimensions – Environmental, Social or Governance
- E – indicators relate to actions and efficiency measures undertaken to monitor and decrease the environmental footprint of the loan portfolio.
- S – indicators relate to the entity’s relationship with, and impact on, its stakeholders including the direct social impact of its activities
- G – indicators relate to the governance of sustainability including organizational policies, operational procedures, and overall approach to sustainability by the entity and/or organization.
Peer group allocation
Each participant is assigned to a peer group, based on the participants’ lending actions and geographical location, as reported in EC3. To ensure participant anonymity, GRESB will only create a peer group if there is a minimum of five peers in the group.
Peer group assignments do not affect an entity's score, but determine how GRESB puts participant’s results into context. The peer group composition is determined by a simple set of quantitative rules and provides consistent treatment for all participants. Peer group participants will see only Fund Manager / Organisation name in the list of peer group constituents.
GRESB requests details on Entity Characteristics [EC] and Reporting Characteristics [RC] to construct these groups for proper benchmarking and comparison opportunities.