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2019

Asset

Assessment

Contents

Disclaimer: 2019 GRESB Infrastructure Assessments Pre-Release

The information in this document has been provided in good faith and is provided on an “as is” basis. While we do not anticipate major changes, we reserve the right to make modifications prior to the official start of the 2019 reporting period on April 1 and the official release of the 2019 Infrastructure Assessments. We will publicly announce any such modifications.

Introduction

About GRESB

GRESB is the environmental, social and governance (ESG) benchmark for real assets. Working in collaboration with the industry, GRESB defines the global standard for sustainability performance in real assets providing standardized and validated ESG data to more than 75 institutional investors, representing over USD 18 trillion in institutional capital.

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

Overview of GRESB Infrastructure Assessments

GRESB Infrastructure Asset Assessment

The GRESB Infrastructure Asset Assessment (Asset Assessment) provides the basis for systematic reporting, validation, objective scoring and peer benchmarking of ESG management and performance of infrastructure assets around the world. Both single and multi-facility assets can participate and the process leads to deep data insights for investors, fund managers and asset operators.

The Asset Assessment is organized around seven Sustainability Aspects. These aspects are broken down into indicators addressing asset-level plans and policies, implementation actions and operational performance.

GRESB Infrastructure Fund Assessment

The GRESB Infrastructure Fund Assessment (Fund Assessment) provides the basis for systematic reporting, validation, objective scoring and peer benchmarking of ESG management and performance of infrastructure funds around the world.

The Fund Assessment contains 13 indicators focused on management and investment processes. These indicators address foundational ESG plans and policies, leadership and accountability, engagement strategies, communications processes and other factors.

Supplement: Resilience

The GRESB Resilience Module is an optional supplement to the GRESB Real Estate and Infrastructure Assessments. It evaluates how real estate and infrastructure companies and funds are preparing for potentially disruptive events and changing conditions, assessing long-term trends, and becoming more resilient over time. The Module is motivated by two key factors:

The Resilience Module can optionally be completed along with the Asset Assessment.

The role of the GRESB benchmark

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

GRESB results provide a practical way to understand ESG performance and communicate that performance to investors and other stakeholders. GRESB provides overall scores of ESG performance - such as the GRESB Score and GRESB Ratings - as well as detailed aspect-level and individual indicator-level scores. The key to analyzing GRESB data is in peer group comparisons that take into account country, regional, sectoral and investment type variations. This richer analysis enables fund managers, companies and asset operators to understand their results in the context of their investment strategies and communicate this to their investors.

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

Timeline and Process

The GRESB Infrastructure Assessments open in the Assessment Portal on April 1, 2019. The submission deadline is July 1, 2019, 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, 2019. We may need to contact you during this time to clarify any issues with your response. Results are published in September 2019.

For an overview of key dates and activities for the 2019 Assessment cycle, please see the Assessment timeline.

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

GRESB Assessment Training Program

GRESB Infrastructure Assessment Training is designed to help participants, potential participants and other GRESB stakeholders (managers, consultants, data partners) improve their ESG reporting through the GRESB Infrastructure Assessments.

Training is 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 2019 GRESB Assessment Training.

2019 GRESB Asset Assessment Changes

GRESB works closely with its members and broader industry stakeholders to update our Assessments annually to improve reporting and data accuracy, minimize reporting burden and stay up to date with contemporary ESG developments.

The main areas of development for the 2019 Assessment include refinements to the materiality approach, standardization of performance indicators and the improved Fund-Asset table functionality. These updates align with the longer term development of the Assessment, support our efforts to improve data quality and reflect the evolution of the infrastructure industry as measured by the benchmark over the last three years. They provide the building blocks for moving from benchmarking reporting transparency to real ESG performance over the next few years.

The table below lists the key changes, as well as their implications for your reporting process.

High-level comments

1

Revised asset description based on facility sectors and locations

Assets will be more accurately defined based on the facilities that comprise the asset and their sectors and locations. Sector classification will be based on the EDHECInfra GICCS classification system and locations based on the UN Standard Country Codes. Assets will be strongly encouraged to report as single facilities as this provides the best basis for benchmark comparisons.

2

Materiality approach refined

The approach to materiality-based scoring has been refined by:

  • Adding eleven new factors beyond sector that will be used to determine the materiality of ESG issues.
  • Adding nine questions which are used to gather inputs on these factors (the others come from other indicators).
  • Moving from three levels of materiality weightings to four.
  • Moving from 22 to 172 sector classifications.

This refinement will provide a more tailored entity specific materiality-based scoring to better address the diversity of assets participating in the Asset Assessment.

3

Performance Indicators – Standardization of Metrics, Intensities and Reporting Boundaries

Performance Indicators have been revised to focus on the most important metrics for investors and remove extraneous ones. Intensity calculations will now be displayed and information on reporting boundaries is requested. These changes provide the building blocks for moving from scoring of reporting transparency to performance in the future.

4

New Indicators

New Indicators on ‘Customer Satisfaction’, ‘Employee Satisfaction’ and ‘Gender & Diversity’ as these issues were identified as material based on feedback, and to align with the Real Estate Assessment. These indicators will be unscored in 2019.

5

The access to the Template Tool is no longer restricted to members

The template tool enables participants to copy information across multiple assessments, reducing the amount of time spent replicating information for entities held by the same manager.

6

Fund-Asset Linking

Significant improvements have been made to the Fund-Asset linking process. Funds will be able to add non-participating assets to their Fund-Asset table without creating a new asset assessment. Asset participants will be able to see what funds are linked to their asset from their assessment portal.

7

Good Practice Links

Both the fund and asset assessment indicator guidance will now include good practice examples drawn from publicly available evidence provided for indicators.

8

The Validation Interview process changes structure and will be mainly based on a desktop review

While the scope of the Validation Interview will remain the same (the validators will do an in-depth analysis of all supporting evidences, mandatory and non-mandatory, performance indicators and outliers), the Validation Interview report, the call with the participant, and the participant’s ability to change their responses following the call will be removed from the process. Participants will continue to be automatically notified if they are selected for a Validation Interview and there may still be instances where we need to contact the participant for missing supporting evidence, additional information, clarifications or corrections to the data submitted.

Indicator changes

EC2

Nature of Business

Description: Two new sections added covering ‘Revenue Basis’ (i.e. merchant, contract/concession) and ‘Scope of Service’ (i.e. asset provision, maintenance and/or operation), and title changed from ‘Nature of ownership’ to better reflect the range of inputs.

Rationale for change: Engagement with the ‘Contract Structure/Model’ Industry Working Group (IWG) identified that these entity attributes were important in understanding the degree of control and influence that the entity has on ESG issues. This is in turn important in determining the material ESG issues. Adding ‘Revenue Basis’ also aligns with the EDHECInfra Global Infrastructure Company Classification Scheme (GICCS), which GRESB has contributed to and adopted as a standard for classification of assets.

Impact of change: Minor one-off increase in reporting burden due to the need to enter this information this year but it will pre-fill after that. ‘Scope of Service’ will be used for materiality-based scoring and peer grouping. ‘Revenue Basis’ will be used for insights.

RC2

Economic size

Description: ‘Annual operating costs’ was changed to ‘Revenue’ and is now mandatory.

Rationale for change: Revenue will be used (as denominators) to calculate intensity performance metrics which will in future provide more comparability between assets.

Impact of change: Minor increase in reporting burden in exchange for more comparable performance metrics.

RC3 (former RC3/4)

Facility details

Description: Indicator RC3 and RC4 have been merged into a newly structured indicator based on listing of facilities that make up the asset. Information on entity capacity and output has been moved to performance indicators (PI1). Sector and location classification aligns with the EDHECInfra GICCS classification system and the United Nations Standard Country or Area Codes for Statistical Use.

Rationale for change: To simplify sector and location classification and align with a standardized classification systems.

Impact of change: Far better user experience, reduced reporting burden, more standardized classification and more accurate reporting.

RC4 (former RC5)

Description of the asset

Description: Addition of an upload of a photo(s) that represents the asset. This will not be mandatory or scored.

Rationale for change: GRESB marketing purposes.

Impact of change: Minor increase in reporting burden.

MA1

Entity Materiality Assessment

Description: Split the two requirements for materiality assessment into two separate elements relating to identification of issues and engagement with stakeholders.

Rationale for change: Make the requirements clearer to participants.

Impact of change: Improved clarity for participants.

MA2

GRESB Materiality Assessment

Description: Refined the approach to materiality-based scoring by:

  • Adding eleven new factors beyond sector that will be used to determine the materiality of ESG issues for the entity.
  • Adding nine questions which are used to gather inputs on these factors (the others come from other indicators).
  • Moving from three levels of materiality weightings to four.
  • Moving from 22 to 172 sector classifications.

Rationale for change: This refined approach was developed through engagement with the Infrastructure Benchmark Committee and provides much more tailored, entity specific materiality weightings.

Impact of change: Minor increase in reporting burden to answer the nine simple questions in exchange for much better tailoring to each entity.

MA3

ESG specific objectives

Description: Removed section of indicator focusing on ‘integration of objectives’. This indicator will now purely focus on ESG objectives.

Rationale for change: This aspect is already addressed in other areas of the assessment and was difficult to respond to and validate.

Impact of change: Reduced reporting burden.

MA6

ESG factors in personnel performance targets

Description: Removed the wording ‘pre-determined’ from ‘Does performance on these targets have pre-determined consequences’.

Rationale for change: This term was confusing for participants.

Impact of change: More clarity.

PD4

Disclosure of ESG actions and/or performance

Description: Added 'Frequency of reporting' as an option for ‘Entity reporting to investors’.

Rationale for change: To align with Real Estate and Fund assessments.

Impact of change: Minor increase in reporting burden.

PD5

Third-party review of ESG disclosure

Description: Third-party verification and third-party assurance of sustainability disclosure receive equal points.

Rationale for change: Over the past years, the non-financial information third-party review industry has witnessed the development of several new verification and assurance standards. The level of scrutiny underpinning such third-party reviews tends to be dictated by the standard used, rather than the terminology used to describe the review process.

Impact of change: The scoring is adjusted to recognize external verification in the same way as external assurance. “Other” answers provided to the Scheme Name dropdown menu are subject to validation.

PD6

ESG-related controversies communication process

Description: Added ‘Investors/Shareholders’ to the list of stakeholders.

Rationale for change: Review of other answers identified the need for this additional stakeholder group.

Impact of change: Greater clarity.

RO1-3

E,S,G risk assessment

Description: Added a section covering the key elements of the risk assessment process.

Rationale for change: Previously the indicator just measured what ESG issues were identified in risk assessment but not whether risks were also analysed, evaluated and treated, which are important aspects of managing risk.

Impact of change: Minor increase in reporting burden.

RO4

Actions to mitigate ESG risk/ improve ESG performance

Description: Indicator has been removed.

Rationale for change: This indicator overlapped with RO1-3. Impact assessments are commonly undertaken during the development and construction phase and are less relevant to ongoing management of assets. Impact assessments can still be used as evidence in RO1-3. The issue of development and construction will be reviewed by a Greenfield Development Industry Working Group.

Impact of change: Significant reduction in reporting burden.

ME1

Alignment and/or accreditation to ESG-related management standards

Description: Separate evidence is now required for each of ‘Accreditations maintained or achieved’ and ‘Management Standards aligned with’.

Rationale for change: These two aspects were sometimes confused by participants and difficult to validate.

Impact of change: Minor increase in reporting burden in exchange for greater clarity and reporting accuracy.

ME2-4

Monitoring E,S,G performance

Description: Remove the open text boxes requiring an explanation for how each of the selected issues are monitored.

Rationale for change: Given that evidence is provided this was a duplication in reporting.

Impact of change: Reduced reporting burden.

SE1&3

Stakeholder engagement program & stakeholder grievance process

Description: Updated checkboxes list to include ‘Investors/Shareholders’ to stakeholders list.

Rationale for change: We identified that this stakeholder group was commonly entered as an ‘Other’ response.

Impact of change: Reduced reporting burden.

PI1

Measures of output

Description: Rather than a generic indicator with ability to provide any output metrics, this indicator has been standardized to focus on standardized metrics that provide the building blocks for useful performance metrics including intensity metrics for the other performance indicators. Capacity and output information has been moved here from RC4 as a better place to capture and use this data. A new metric has been incorporated on ‘impact value’ to allow participants to start calculating and reporting the ESG value of their activities.

Rationale for change: Investors are requesting more standardized and comparable data.

Impact of change: Increase in reporting burden in exchange for clearer approach and more standardized, useful and comparable data.

PI2

Health & Safety

Description: Split the Customers & Community Health & Safety table into two separate tables, creating a total of four individual PI tables for this indicator.

Rationale for change: The two stakeholder groups have been deemed significantly different from one another and worthy of separate indicators. This allows them to be given different weightings for materiality-based scoring.

Impact of change: Supports better tailoring to each entity.

PI2-8

Performance Indicators

Description: Metrics standardized to focus on the most important metrics for investors and removing extraneous ones. Only key metrics are scored (usually based on totals). Baseline data is no longer scored but can be provided for reporting. Targets for key metrics will be scored but evidence for these must be provided. Intensity calculations will now be displayed (per unit output, GAV and revenue). Information on reporting boundaries is requested.

Rationale for change: These changes provide the building blocks for moving from scoring of reporting transparency to performance in the future. The focus on key metrics will standardise reporting and clarify expectations.

Impact of change: Reduced reporting burden, clearer structure, greater transparency and more accurate and comparable data.

PI6

Water

Description: PI6 on Water is now split into two indicators, being Water Use/Withdrawal (PI6.0) and Water Discharge/Pollution (PI6.1).

Rationale for change: These two issues have been deemed significantly different from one another and worthy of separate indicators. This allows them to be given different weightings for materiality-based scoring.

Impact of change: Supports better tailoring to each entity.

PI9 (New)

Customer Satisfaction

Description: New Indicator on ‘Customer Satisfaction’ based on undertaking customer satisfaction surveys and implementing improvements based on the survey responses. It will be unscored in 2019.

Rationale for change: This was identified as a material issue by the IBC and IAB. Alignment with Real Estate Assessment (but using customer satisfaction rather than tenant satisfaction).

Impact of change: Increased reporting burden although it is not scored in 2019.

PI10 (New)

Employee Satisfaction

Description: New Indicator on ‘Employee Satisfaction’ based on undertaking customer satisfaction surveys and implementing improvements based on the survey responses. It will be unscored in 2019.

Rationale for change: This was identified as a material issue by the IBC and IAB. Alignment with Real Estate Assessment.

Impact of change: Increased reporting burden although it is not scored in 2019.

PI11 (New)

Gender & Diversity

Description: New Indicator on ‘Gender & Diversity’ incorporating a range of metrics at management and employee level.

Rationale for change: This was identified as a material issue by the IBC and IAB. Alignment with Real Estate Assessment.

Impact of change: Increased reporting burden although it is not scored in 2019.

PD1-3, RO1-3, ME2-4

ESG Issues

Description: Added the ‘Health & Safety: Contractors’ issue. Removed the ‘Discrimination’ issue.

Rationale for change: ‘Health & Safety: Contractors’ added to align Performance Indicator reporting to materiality-based scoring. Discrimination issue was deemed to already be covered by the ‘Gender & Diversity’ issue. These changes align with the Real Estate assessment.

Impact of change: More clarity.

Description: ‘Cybersecurity’ separated out from ‘Data protection and privacy (inc. cybersecurity)’ as its own issue.

Rationale for change: Benchmarking against other frameworks and feedback from IBC and IAB supported the need to separate Cybersecurity.

Impact of change: More focus on an important issue.

Good Practice Links

Description: Indicator guidance will now include good practice examples. These will be drawn from publicly available evidence provided for indicators.

Rationale for change: Participants have requested more guidance and examples of good practices to assist their improvement efforts.

Impact of change: Greater clarity of expectations and guidance to foster improvement.

Asset Link to Funds

Description: Assets will now be able to see what funds have linked their asset to the fund’s Fund-Asset table via the portal.

Rationale for change: Asset participants lacked transparency in seeing which funds their asset may be linked to, creating confusion as to whether a connection had indeed been made or not. Previously, only Fund Assessment participants had the possibility to view this.

Impact of change: Less confusion and possibility of errors.

Entity & Reporting Characteristics

Entity Characteristics

2018 Indicator

Reporting Characteristics

2018 Indicator

Management

Materiality

2018 Indicator

1 point , MP, G

Not scored

Objectives

2018 Indicator

2.2 points , MP, G

Leadership & Accountability

2018 Indicator

1 point , MP, G

1 point , MP, G

2.2 points , MP, G

Training

2018 Indicator

2.7 points , IM, G

Policy & Disclosure

Policies

2018 Indicator

1.7 points , MP, E

1.7 points , MP, S

1.7 points , MP, G

ESG Disclosure

2018 Indicator

1.7 points , MP, G

1.7 points , MP, G

1.7 points , MP, G

Not scored

Risks & Opportunities

Risk Assessments

2018 Indicator

3.8 points , MP, E

3.8 points , MP, S

3.8 points , MP, G

Implementation

2018 Indicator

9.9 points , IM, G

Monitoring & EMS

ESG-related management standards

2018 Indicator

4.4 points , MP, G

ESG monitoring

2018 Indicator

1.9 points , IM, E

1.9 points , IM, S

1.9 points , IM, G

Stakeholder Engagement

Stakeholder engagement

2018 Indicator

2.5 points , MP, S

2.5 points , IM, S

2.5 points , MP, S

Not scored

Sustainable procurement

2018 Indicator

1.3 points , MP, S

1.3 points , IM, S

Performance Indicators

Output

2018 Indicator

Not scored

Health & Safety

2018 Indicator

3.25 points , IM, S

3.25 points , IM, S

3.25 points , IM, S

3.25 points , IM, S

Energy & Emissions

2018 Indicator

3.25 points , IM, E

3.25 points , IM, E

3.25 points , IM, E

Water & Waste

2018 Indicator

3.25 points , IM, E

3.25 points , IM, E

3.25 points , IM, E

Biodiversity & Habitat

2018 Indicator

3.25 points , IM, E

Customer Satisfaction

2018 Indicator

Not scored

Not scored

Employee Satisfaction

2018 Indicator

Not scored

Not scored

Gender & Diversity

2018 Indicator

Not scored

Certifications & Awards

Certifications

2018 Indicator

2.5 points , IM, G

Awards

2018 Indicator

Not scored