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2018

Developer

Assessment

Contents

About GRESB

GRESB is an industry-driven organization transforming the way capital markets assess the environmental, social and governance (ESG) performance of real asset investments.

GRESB data and analytical tools are used by over 70 institutional and retail investors, including pension funds and insurance companies, collectively representing over USD 17 trillion in institutional capital, to engage with investment managers to enhance and protect shareholder value.

For more information, visit gresb.com. Follow @GRESB on Twitter.

About the GRESB Real Estate Assessment

The GRESB Real Estate Assessment is the global standard for ESG benchmarking and reporting for listed property companies, private property funds, developers and investors that invest directly in real estate. The Assessment evaluates performance against seven sustainability aspects, including information on performance indicators, such as energy, GHG emissions, water and waste. The methodology is consistent across different regions, investment vehicles and property types and aligns with international reporting frameworks, such as GRI and PRI.

The GRESB Real Estate Assessment provides investors with actionable information and tools to monitor and manage the ESG risks and opportunities of their investments, and to prepare for increasingly rigorous ESG obligations. Assessment participants receive comparative business intelligence on where they stand against their peers, a roadmap with the actions they can take to improve their ESG performance and a communication platform to engage with investors.

About the GRESB Real Estate Developer Assessment

Besides the GRESB Real Estate Assessment for property companies and fund managers that focus on the management of standing investments, GRESB provides a stand-alone GRESB Developer Assessment for organizations that focus on development activities. The Developer Assessment evaluates the ESG performance of these organizations, focusing on policies, strategies, and measurable actions related to new construction and major renovation projects.

The following organizations should fill out the GRESB Developer Assessment:

The GRESB Real Estate Developer Assessment contains a subset of indicators from the GRESB Real Estate Assessment, plus the 14 indicators in the New Construction & Major Renovations (NC&MR) Aspect.

The role of the GRESB benchmark

GRESB’s global benchmark uses a consistent methodology to compare performance across different regions, investment vehicles and property types. This consistency, combined with our broad market coverage, means our members and participants can apply a single, globally recognized ESG framework to all their real estate investments.

The GRESB Developer Assessment is structured around 5 Aspects and contains approximately 40 indicators. The indicators follow a plan-do-check-act logic and are designed to encompass the wide variety of property companies and funds included in the benchmark.

While GRESB provides an overall GRESB Score for each participant, it recognizes that this is only a single element within a range of results reported in the benchmark. The key to analyzing GRESB data is in peer group comparisons that take into account country, regional, sectoral and investment type variations.

GRESB is committed to facilitating the inclusion of its ESG metrics in investment decision-making processes and encouraging an active dialogue between investors, fund managers and companies on ESG issues. GRESB updates its Investor Engagement Guide on an annual basis to assist GRESB Investor Members in their engagement with managers.

Grace Period

GRESB offers participants reporting for the first time the option to not disclose their first year Assessment results to their investors. This "Grace Period" allows participants a year to familiarize themselves with the GRESB reporting and assessment process without externally disclosing their results to GRESB Investor Members.

While Grace Period participant names are disclosed to GRESB Investor Members, Investor Members are not able to request access to Grace Period participant results.

Participants will receive a GRESB Scorecard and have the opportunity to purchase a Benchmark Report for a more in-depth analysis of sustainability performance and a detailed indicator-level comparison with peers.

First time participants wishing to opt for the Grace Period can select the option from the settings section in the Assessment Portal.

Who can see my data?

Data is submitted to GRESB through a secure online platform and can only be seen by current GRESB Staff or authorized personnel from GRESB’s parent company, i.e.,GBCI, Inc. (“GBCI”). GRESB benchmark scores are not made public. Data collected through the GRESB Real Estate Assessment is only disclosed to the participants themselves and:

No other third parties will see the data. GRESB Investor Members must request access to a participant’s benchmark results and scores, allowing the participant the control to either accept or deny this request.

Timeline and Process

The GRESB Assessment opens in the Assessment Portal on April 1, 2018. The submission deadline is July 1, 2018, providing participants with a three-month window to complete the Assessment. This is a fixed deadline, and GRESB will not accept submissions received after this date.

The GRESB validation process starts on June 15 and continues until July 31, 2018. We may need to contact you during this time to clarify any issues with your response.

Results are published in September and are distributed as follows:

For an overview of key dates and activities for the 2018 Assessment cycle, please see the Assessment timeline.

Response Check

A Response Check is a high-level check of the Assessment response prior to final submission. It helps to reduce errors that may adversely impact the Assessment results and ensures the submission is as complete as possible.

The Response Check is available for request from April 1 to June 8, 2018 subject to available resources. We strongly encourage participants to place their request as early as possible.

Fund Manager and Company Members are able to request a complimentary Response Check for one entity as one of their membership benefits.

Guidance & Support

The Assessment Portal is accompanied by indicator-specific guidance, available under the “Guidance” tab that explains:

In addition to the guidance in the Portal, each Assessment is accompanied by a Reference Guide. The Reference Guide provides general introductory information to the Assessments and provides a report-format version of the indicator-by-indicator guidance that is available under the Guidance tab in the Portal. The Reference Guide will be available on March 1, 2018.

The GRESB Assessment Portal has the following tools and functionality to help ensure an efficient and accurate submission:

GRESB works with a select group of Partners who can help participants with their Assessment submission. To learn more about the services offered by GRESB Partners, please refer to our Partner Directory.

Participants are able to contact the GRESB Helpdesk at any time for support and guidance.

GRESB Assessment Training Program

GRESB Real Estate Assessment Training is designed to educate participants, potential participants and other GRESB stakeholders (managers, consultants, data partners) on ESG management and reporting through the GRESB Real Estate and Developer Assessment.

The training is divided into two sessions – Introductory and Advanced – to reflect the level of experience with GRESB:

Both programs are delivered via face-to-face group sessions, in select locations across all regions with GRESB participation, including Europe, North America and Asia Pacific. See dates and locations for GRESB Assessment Training.

Starting in October 2018, GRESB will run Data Insights Training sessions focussing on the interpretation of the Assessment results and the reporting and benchmarking tools available to Investor Members, Fund Manager and Company Members.

2018 GRESB Developer Assessment Changes

GRESB works closely with it’s members and broader industry stakeholders to ensure the Assessment addresses material issues in the sustainability performance of real estate investments. Following an extensive industry engagement through the GRESB Advisory bodies, the 2018 GRESB Developer Assessment only introduces minor changes, which are also aligned with GRESB Real Estate Assessment.

High-level comments

Assessment development process focused on creating alignment between the different GRESB business lines and recognizing topics that are directly aligned with investment rationale

Alignment in terminology, interpretation of indicators, document structure and process standardization is important, especially for managers with investments in multiple asset classes. One of the direct outcomes relates to the renaming of the Developer Assessment indicators to associate with each Aspect (e.g. DQ1 of the Management Aspect becomes MA1, DQ8 of the Policy & Disclosure Aspect becomes PD1). In the long term, this provides more flexibility in adding or removing indicators without affecting the entire Assessment structure.

The desire for better alignment between GRESB Assessments also led to the amendment of indicators in the Management, Policy & Disclosure, Stakeholder Engagement sections which address the management and policy dimensions of a reporting entity.

The 2017 indicator naming is listed on the right side of each 2018 indicator. In a case when a 2018 indicator is not the same as the one in 2017 but follows the same principle, there are parentheses added to the 2017 indicator naming.

Reduced number of scored open text boxes and new portal functionalities for a faster reporting process

The 2018 Assessment developments are designed with the purpose of scoring performance in a way that encourages improvement in ESG performance (measured, tested performance). Allowing participants the option to provide context to their answers is important and will continue to happen via non-scored open text boxes used for reporting purposes in the Benchmark Report.

Updated selection methodology for Validation Plus scope

The validation process continues to be structured in three layers: All Participant Check (APC), Validation Plus (VP) and Validation Interviews (VI). Starting 2018, the random selection of 25% participants for a more detailed check of all supporting evidence will be replaced by a selection of 100% participants being checked on the same subset of indicators. This will allow GRESB to apply a consistent level of scrutiny on all participating entities. Detailed information on the validation process will be included in the Reference Guide.

Increased transparency on scoring and Assessment methodology

In response to multiple requests for additional information on scoring and methodology, GRESB publishes the 2017 Real Estate Scoring document on the Assessment Portal. This document is shared with participants in good faith and can be used by participants as an additional source of information on the Assessment. Please note that the 2018 scoring methodology can differ partially or completely for certain indicators.

Health & Well-being Module enters its final year

The GRESB Health & Well-being module is entering its third and final year alongside the Real Estate Assessment. After two years of successful voluntary participation in the module coupled with encouraging results, human health is among the top trends expected to shape the real estate industry in the near future. The final year of the GRESB Health & Well-being Module will build on information accumulated over the past years to further develop material indicators for potential integration in the 2019 Real Estate Assessment. In February, 2018, GRESB and the Green Health Partnership have convened an Industry Working Group (IWG) to review and comment on the proposed changes on the 2018 Module indicators.

New! Resilience Module

Resilience has emerged as an important topic for real estate and infrastructure investors and the companies, funds and assets they invest in. With the frequency and cost of natural disasters increasing around the world, the topic will remain on the agenda for years to come.

In order to provide our Investor Members with more transparency about the resilience of real estate and infrastructure companies, funds and assets, GRESB is introducing a new Resilience Module for the 2018 Assessment cycle. The new Resilience Module will be available as an optional supplement for 2018 GRESB Assessments, including Real Estate and Infrastructure, and is informed by the Industry Working Groups hosted in January, 2018.

The table below has more information on the changes:

Entity and reporting characteristics

RC2

Add "Millions" in the question text to emphasise the number input should be in millions and implement answer check (i.e.,warning, signal, flag)

Rationale for change: A frequent mistake made in 2017, which required individual follow-up with many participants during the summer.

Impact of change: Additional portal check.

RC-NC1.2, RC-NC2.2

Additional question on portfolio characteristics to ensure complete reporting

Rationale for change: Ensure participants report on their entire real estate portfolio and do not report on a selected subset.

Impact of change: A simple Yes/No question, followed by additional context to provide assurance for participants that portfolios are fairly benchmarked.

RC-NC3

Replace "United States" in the dropdown list of countries by the full list of US states

Rationale for change: The climate on the West Coast is very different from the one on the East Coast. Knowing the location of the assets by state would allow GRESB to break down the peer groups into more specific parts, similar to the sub-regions in Europe (e.g. Benelux).

Impact of change: Expand the dropdown. Participants need to calculate their regional allocation of assets in more detail.

Management

MA1(DQ1)

Open text box no longer scored, but used for reporting purposes

Rationale for change: In 2017, 95% responses received Full points or Partial Points. Most participants are able to explain their sustainability objectives, following the standard validation requirements for the answer. This change is in line with our effort to shift more weight from the management to the quality and implementation of sustainability objectives.

Impact of change: Reduced reporting burden. The total points assigned to this indicator remains 2p.

New option added: Health & Well-being

Rationale for change: Health & Well-being is a cross-cutting issue borrowing elements from the entire spectrum of environmental, social and governance indicators. Human health is among the top trends expected to shape the real estate industry in the near future and an increasing number of real estate companies define their strategy around it. We do not expect all GRESB participants to define their development strategy around health & well-being, but we would like to identify the ones who do.

Impact of change: This section is not used for scoring, but is relevant for the validation of the supporting evidence.

MA2(DQ2)

“Investment partners (co-investors/JV partners)” is added to the options list. The “Other” answer option has been removed

Rationale for change: Investment partners/JV partners is a frequently provided “Other” option. All the other answers provided by participants were duplicated of the already listed elements or a duplicate of the sustainability taskforce addressed in MA4.

Impact of change: It is not possible to pre-fill the indicator in 2018. No impact on score.

MA4 (DQ4&DQ5)

The open text in Q5 is integrated into Q4 and is used for reporting purposes only

Rationale for change: In 2017, 96% participants answered “Yes” in DQ5, confirming they have a formal process to inform the most senior decision-maker on the sustainability performance. 98% of these answers received “Full points”, demonstrating that when applicable, internal communication on sustainability is done in a structured way. This indicators presents little opportunity for differentiation from a scoring perspective, but is an important piece for defining the context of the submission.

Impact of change: The open textbox is incorporated into MA4 but will not be scored.

MA5 (DQ6)

Restructured indicator coupled with the request for supporting evidence

Rationale for change: Specific provisions for rewards, penalties, or support reflect the entity’s strategic priorities and provide the foundation for accountability of senior management and responsibility for employees. In 2017, 90% of participants confirmed that their organizations include sustainability factors in the annual performance targets of the employees. The updated indicator unpacks that claim to determine how incentives are created for the achievement of ESG targets and who benefits from them.

Impact of change: A more structural approach to ESG targets. No changes on scoring.

Policy and Disclosure

Adjusted the order of indicators within section

Rationale for change: The order was counterintuitive; starting with the indicators on disclosure and followed by the ones on policy. Restructured the section into fewer indicators that follow a simple flow: policies on E, S, G, and disclosure methods.

Impact of change: Better flow of indicators.

PD1 (DQ8)

Option “Building safety” is removed

Rationale for change: In the context of this indicator, the answer is often interpreted in the same way as “Environmental attributes of building materials”. The provision of policy clauses on asset-level structural characteristics that can harm tenant safety is captured in the option “asset-level safety (for tenants)” in PD3.

Impact of change: Indicator is still pre-filled, no impact on scoring.

PD2

Elements of DQ9, DQ10, DQ11 are combined into an indicator addressing policies on social issues

Rationale for change: Overlapping elements across indicators.

Impact of change: Better Assessment structure through individual indicators on each of the E/S/G pillars. PD2 receives 2p.

PD3 (DQ9)

Update issues for policy/policies on governance (this change is related to the previous one)

Rationale for change: The list of items classified as E/S/G issues was not consistent with the definitions of other reporting guidelines.

Impact of change: List of governance issues has been updated to reflect the most material governance issues for an efficient operation of the entity. The maximum points available for this indicator is increased from 1p to 2p.

PD4

Indicator on board diversity

Rationale for change: Research shows that companies with higher board diversity are more likely to have strong financial performance and fewer instances of bribery, corruption, conflicts of interest and fraud. The aim of this newly created indicator is to zoom into the diversity topic and improve alignment with the GRI, EPRA (GRI102-24 / 103 / 405-1 / 405-2) and PRI standards (IFD20, SG10, LEI10).

Impact of change: The indicator is not scored and only used for reporting purposes in 2018.

DQ10

Remove the indicator

Rationale for change: DQ10 is overlapping with the updated PD2.

Impact of change: Easier reporting.

DQ11

Remove the indicator

Rationale for change: Q11 is overlapping with the updated PD2.

Impact of change: Easier reporting.

PD6

Indicator on company’s commitment to ESG leadership standards or group

Rationale for change: The public commitment to sustainability through affiliation to internationally recognised initiatives contributes to the organization’s credibility and strengthens investor confidence.

Impact of change: The indicator is not scored and only used for reporting purposes in 2018.

PD7

Consolidate two reporting indicators (PD14 and PD16) on ESG misconduct, penalties, incidents or accidents

Rationale for change: Easier reporting and a better flow of indicators.

Impact of change: This indicator is not scored and only used for reporting purposes. However, this information may be used as criteria for the recognition of 2018 Sector Leaders.

Risk and EMS

ME1

DQ17.1 and DQ17.2 merged into one indicator RE4

Rationale for change: Consolidation of the Assessment and validation process.

Impact of change: Easier reporting, no impact on scoring.

Stakeholder engagement

DQ18

Remove the indicator

Rationale for change: The baseline information for this indicator changed.

Impact of change: In 2017, 97% participants indicated they monitored the implementation of their employee policies.

SE1 (DQ19)

Restructured answer options

Rationale for change: Requirement for better analytics capabilities.

Impact of change: Better analytics, no impact on scores or data collection process.

SE2.1 (DQ20.1)

Expand scope of indicator to include survey quantitative metrics

Rationale for change: Surveys are the most frequently used methods for receiving feedback from employees. They can be an effective means of engagement and if designed properly, an important source of information to be used for increasing the satisfaction levels of the tested groups. In view of this, the outcomes of the surveys need to be translated into unambiguous and easily interpretable customer satisfaction score that can be compared over time or between different sectors.

Impact of change: The new section is not scored and only used for reporting purposes in 2018.

SE 4.2 (NEW)

Indicator on supply chain engagement

Rationale for change: The intent of this question is to identify if the reporting entity effectively engages with its suppliers in order to deliver sustainable goals communicated in the previous question. The indicator addressed the Check component in the Plan - Do - Check - Act structure defined by ISO.

Impact of change: Indicator not scored in 2018, used for reporting purposes only.

DQ22

Removed the indicator from Developer Assessment

Rationale for change: Stainability-specific requirements in standard lease is not always applicable to development projects; hence, this indicator is remoevd from the Developer Assessment.

Impact of change: None.

New construction and major renovation

NC1

Open text box no longer scored, but used for reporting purposes

Rationale for change: (Alignment with MA1/DQ1) In 2017, 96% responses received Full points or Partial points. Most participants are able to explain their sustainability strategy, following the standard validation requirements for the answer. This change is in line with our effort to shift more weight from the management to the quality and implementation of sustainability strategy.

Impact of change: Reduced reporting burden. The total points assigned to this indicator remains 1p.

New option added: Green building certification

Rationale for change: The added option was a frequently reported Other answer in 2017.

Impact of change: No impact on score.

NC5.1

Update on wording so that the indicator is clear and answer options are mutually exclusive

Rationale for change: Wording was updated to improve terminology, and to ensure the answer options are mutually exclusive.

Impact of change: No more double scoring for participants that require certification at a specific level. No impact on score.

NC5.2

Participants can also report on projects that are registered to obtain a green building certification

Rationale for change: Green building certifications are often only awarded after NCMR projects are completed, and pre-certifications are not available for all building certificates. This change enable participants to report on projects that have registered at an official directory of green building certification scheme but not yet obtained the final certificate.

Impact of change: Adapted approach to the use of green building certifications in new construction and/or major renovation projects during the reporting period. No impact on score.

NC7.1

The percentage of projects with renewable energy is used for scoring

Rationale for change: This enable participant to get recognition on their effort in promoting renewable energy in new construction and/or major renovation projects. And it provides a better differentiation between sustainability best practices.

Impact of change: The percentages of all reported renewable projects are added up and capped at 100%, and the total percentage is taken into account in the scoring. It is calculated linearly.

NC7.2

Evidence is removed

Rationale for change: The mandatory open text box provides sufficient information for validation. Removing the mandatory upload can reduce the reporting burden.

Impact of change: No impact on scoring.

NC8, NC11

Participants no longer need to provide evidence for “common water efficiency measures” and “common occupant health and well-being measures”

Rationale for change: Both indicators cover a lot of information, which makes it difficult to provide evidence for each checkbox. To shift the validation focus to the subcategory of "Requirement for planning and design" will concentrate the validation effort and reduce the reporting burden from the participants.

Impact of change: Reduced reporting burden. No impact on scoring.

NC12.1

Shifted the focus of this indicator from health and safety to safety. New options added

Rationale for change: Emphasize the difference between safety and health.

Impact of change: It is not possible to pre-fill the indicator in 2018. No impact on scoring.

NC14

Open text box no longer scored, but used for reporting purposes

Rationale for change: To shift the validation focus on the uploaded document, to emphasize the quality and implementation of community impact monitoring.

Impact of change: Reduced reporting burden. No impact on scoring.

Entity & Reporting Characteristics

Entity Characteristics

Reporting Characteristics

Development portfolio composition

Management

Sustainability Objectives

2017 Indicator

2 points , MP, G

3 points , MP, G

Sustainability Decision Making

2017 Indicator

2 points , MP, G

1 point , MP, G

3 points , MP, G

Policy & Disclosure

ESG Policies

2017 Indicator

3 points , MP, G

2 points , MP, G

2 points , MP, G

Not scored , MP, G

Sustainability Disclosure

2017 Indicator

4 points , MP, G

2 points , MP, G

Not scored , MP, G

Not scored , MP, G

Not scored , MP, G

Risks & EMS

Governance

2017 Indicator

1 point , IM, G

2 points , IM, G

Environmental & Social

2017 Indicator

2 points , IM, E

Environmental Management Systems

2017 Indicator

3 points , MP, G

Stakeholder Engagement

Employees

2017 Indicator

2 points , IM, S

1.5 points , IM, S

1 point , IM, S

1 point , IM, S

0.5 points , IM, S

Suppliers

2017 Indicator

3 points , MP, G

Not scored , MP, G

New Construction & Major Renovations

Sustainability Requirements

2017 Indicator

1 point , MP, G

3 points , MP, G

1.5 points , MP, G

Materials and Certifications

2017 Indicator

2.5 points , MP, E

2 points , IM, E

5 points , IM, E

Energy Efficiency

2017 Indicator

3 points , MP, E

3 points , IM, E

1 point , IM, E

Water Conservation and Waste Management

2017 Indicator

2 points , MP, E

2 points , MP, E

Supply Chain

2017 Indicator

2 points , MP, S

2 points , IM, S

Health, Safety and Well-being

2017 Indicator

2 points , MP, S

1 point , MP, S

1 point , IM, S

Community Impact and Engagement

2017 Indicator

1.5 points , IM, S

1.5 points , IM, G