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2021

Real Estate

Assessment

Contents

Disclaimer: 2021 GRESB Real Estate Assessment

The 2021 GRESB Real Estate Assessment Document accompanies the 2021 GRESB Real Estate Assessment and is published both as a standalone document and in the GRESB Portal alongside each Assessment indicator. The Assessment Document reflects the opinions of GRESB and not of our members. The information in the Assessment Document has been provided in good faith and on an “as is” basis. We take reasonable care to check the accuracy and completeness of the Assessment Document prior to its publication. While we do not anticipate major changes, we reserve the right to make modifications to the Assessment Document. We will publicly announce any such modifications.

The Assessment Document is not provided as the basis for any professional advice or for transactional use. GRESB and its advisors, consultants and sub-contractors shall not be responsible or liable for any advice given to third parties, any investment decisions or trading or any other actions taken by you or by third parties based on information contained in the Assessment Document.

Except where stated otherwise, GRESB is the exclusive owner of all intellectual property rights in all the information contained in the Assessment Document.

Introduction

About GRESB

Mission-driven and investor-led, GRESB is the environmental, social and governance (ESG) benchmark for real assets. We work in collaboration with the industry to provide standardized and validated ESG data to the capital markets. The 2020 real estate benchmark covers more than 1,200 property companies, real estate investment trusts (REITs), funds, and developers. Our coverage for infrastructure includes over 500 infrastructure funds and assets. Combined, GRESB represents USD 5.3 trillion in real asset value. More than 120 institutional investors, with over USD 28 trillion AUM, use GRESB data to monitor their investments, engage with their managers, and make decisions that lead to a more sustainable real asset industry.

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

Overview of GRESB Assessments

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 three ESG Components - Management, Performance, and Development. The methodology is consistent across different regions, investment vehicles and property types and aligns with international reporting frameworks, such as TCFD, 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.

(Real Estate) Supplement: Nareit Leader in the Light

GRESB works in close collaboration with the National Association of Real Estate Investments Trusts (Nareit), a GRESB Industry Partner. NAREIT encourages its corporate members to complete the annual GRESB Real Estate Assessments, which, for the past seven years, has been the basis for their annual Leader in the Light Award competition. The Leader in the Light Awards are presented to REITs in eight property sectors: Diversified, Global (for non-U.S. companies), Health Care, Industrial, Lodging/Resorts, Office, Residential and Retail. If there are both large and small cap entries that meet the awards criteria in a given property sector, awards are presented to both the leading large and small cap companies. To participate in the Leader in the Light Award program, Nareit members must complete both the GRESB Real Estate Assessment and the Leader in the Light Supplement. Once all sections of the GRESB Real Estate Assessment are completed, including the Leader in the Light Supplement, participants are able to submit their entire submission which will automatically be included in the Leader in the Light Award competition.

GRESB Infrastructure Assessment

The GRESB Infrastructure Assessments are ESG engagement and benchmarking tools for institutional investors, fund managers, infrastructure companies and asset operators working in the infrastructure space. There are two complimentary GRESB Infrastructure Assessments: a Fund Assessment and an Asset Assessment. Both address critical aspects of ESG performance through a globally applicable and standardized reporting and benchmarking framework. The Fund Assessment is intended for infrastructure funds and portfolios of assets, while the Asset Assessment is meant to be completed by the individual underlying assets (portfolio companies). Both Assessments cover the full breadth of infrastructure sectors, including:

The GRESB Infrastructure 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. In turn, GRESB Infrastructure Assessment participants receive comparative business intelligence on where they stand against their peers, a roadmap with actions they can take to improve their ESG performance and a communication platform to engage with investors.

GRESB (Real Estate and Infrastructure) Public Disclosure

GRESB Public Disclosure evaluates the level of ESG disclosure by listed property companies and investment vehicles for an entire investable universe. The evaluation is based on a set of indicators aligned with the GRESB Real Estate and Infrastructure Assessments. It provides investors with a resource hub to access ESG disclosure documents across their full listed investment portfolio and make comparisons against an investable universe with full coverage.

GRESB Public Disclosure data is initially collected by the GRESB team for selected companies, including both 2020 GRESB Real Estate and Infrastructure Asset Assessment participants and non‑participants. All data collected must come from publicly available sources, private documents are not accepted.

All constituents have the opportunity to review and update the data collected prior to it becoming accessible to GRESB Listed Investor Members. GRESB Public Disclosure consists of four Aspects: Governance of Sustainability, Implementation, Operational Performance and Stakeholder Engagement. Together, these Aspects contribute towards a Public Disclosure Level, expressed through an A to E sliding scale.

Impact of Covid-19 on the 2021 GRESB Real Estate Assessment

The GRESB Real Estate Assessment is developed in close collaboration with our governance groups (four regional Benchmark Committees and one global Advisory Board), who thoroughly discussed the options of properly reflecting the impact of Covid-19 on the 2021 data collection, benchmarking and scoring process.

While GRESB’s governance groups recognize the significant impact Covid-19 has on the real estate industry, they also recognize that it will affect participants and their data differently (positively or negatively) based on a variety of conditions including their geography, occupancy, and asset classes included in their portfolios. As a global benchmark, these disparities make it challenging to account for Covid-19 in a way that is fair and applicable to all participants. For this reason, the input required by the GRESB Real Estate Assessment, as well as the scoring and benchmarking processes will remain stable in 2021.

We do recognize the need for clear communication and information about the portfolio’s operations to support the 2021 results launch from participants. To that end, we will introduce an open text box in the Benchmark Reports for participants to use in their communication of results to investors.

The intention to keep the Assessment stable in 2021 also applies to the interpretation of performance data. While Covid-19 has impacted the ability of participants to collect data as well as assets’ operational performance, the scoring approach of Data Coverage and LFL Change (%) in 2021 remains unchanged. In addition, the GRESB Outlier Model (see Appendix 2a of the Reference Guide) including the lower and upper soft thresholds for both LFL Change (%) and Intensities also remain unchanged in 2021. GRESB participants will be prompted to support outliers flagged at the asset-level if those exceed thresholds provided in Appendix 2a of the Reference Guide. Note that soft outliers are only flagged so that participants can check their input data and make corrections if necessary, and have consequently no direct impact on the GRESB scores. Finally, GRESB intends to conduct an analysis of those metrics for all property types post-submission and loosen soft outlier thresholds where necessary. The sole purpose of this analysis will be to ensure that the data points included in the benchmark are representative of the submitted data, and will consequently have no direct impact on participants' submissions.

Please refer to Appendix 1 for more information on Assessment changes in 2021.

Assessment Structure

The Real Estate Assessment generates two benchmarks: The GRESB Real Estate Benchmark and the GRESB Development Benchmark.

The Real Estate Benchmark consists of participants completing both the Management and Performance Components and the Development Benchmark consists of participants completing both the Management and Development Components.

Real Estate Assessment Components

GRESB does not require participation in any of the Assessment Components. However, if the entity does have both standing investments and development projects and considers itself both an operator of buildings and involved in development activities, it is highly recommended to participate in both benchmarks. As a result, participants will receive two GRESB Scores, two Benchmark Reports, two peer groups, etc. capturing how the entities approach their respective activities in both benchmarks.

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.

GRESB results provide a practical way to understand ESG performance and communicate it 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 assessments of performance. 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 and companies 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 and companies on ESG issues. GRESB updates its Investor Member Guidance on an annual basis to assist GRESB Investor Members in their engagement with managers.

Participation Fees

The Assessment participation fee applies to all GRESB Assessments. Participants are able to complete only one component (Management, Performance, or Development), and the standard participation fee will be applied regardless of the number of submitted components.

Other products and services (e.g. Response Checks, Review Period, Customized Benchmark Reports, etc.) are not bundled with the Assessment participation fee. This allows participants to select only those products and services they require.

Additional information about the 2021 participation fee is available here.

Timeline and Process

The Assessment Portal opens on April 1, 2021. The submission deadline is July 1, 2021 (23:59:59 PST), 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. GRESB validates and analyzes all participants’ Assessment submissions.

In 2020 GRESB introduced a new Review Period in the Assessment Cycle to further strengthen the reliability of the Assessments and benchmark results. The Review Period will start on September 1, when preliminary individual GRESB results will be made available to all participants and run for the month. During the Review Period, participants will be able to submit a review request to GRESB using a dedicated form (see Appendix 4b). The final results will be launched to both participants and Investor Members on October 1. Public Results events and other results outputs will be rescheduled to October and November in order to accommodate the September Review Period.

For more information on the Review Period see Appendix 4a.

For more information about the 2021 Assessment timeline, click here.

Response Check

A Response Check is a high-level check of a participant’s submission. The Response Check is carried out by GRESB’s third party validation provider SRI and features a careful review of your Assessment response followed by a 1-hour discussion call. It can be particularly useful for first time participants.

The Response Check does not exclude the participant from any element of the validation process, nor does it guarantee a better GRESB score. It is intended to ensure that no important details have been overlooked in the submission and provides the opportunity to ask for additional guidance and clarification on the GRESB Assessment indicators. The Response Check helps reduce errors that may adversely impact Assessment results and identifies inconsistent responses and incorrect answer formats.

The Response Check is available for request from April 1 to June 1, 2021 (11:59:59 p.m., PST) subject to resources availability. We strongly encourage participants to place their request as early as possible. The Response Check can be requested before the Assessment has been completed, but the scope of the review will be limited the information filled in at the time of the request.

Guidance & Support

The Assessment Portal includes 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 introductory information on the Assessments and a report-format version of the indicator-by-indicator guidance that is available under the Guidance tab in the Portal.

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, take a look at 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 help participants, potential participants and other GRESB stakeholders (managers, consultants, data partners) improve their ESG reporting through the GRESB Real Estate Assessment.

GRESB has provides a free online training platform in 2021. The training courses are modular and self-paced, walking participants through the various aspects of the Assessments, and providing detailed examples and tips for a successful submission.

Access to 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 third-party validation provider SRI. GRESB benchmark scores are not made public. For listed entities, the entity name is disclosed on the GRESB website. For non-listed entities, the fund manager’s name is disclosed.

Access to Assessment results

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.

Access to uploaded evidence

Documentation provided as evidence can be made available to GRESB Real Estate Investor Members on a document by document basis. Each uploaded document has a checkbox (with the default set to ‘not available’) which, when selected by the participant, makes this evidence available to all investors with access to that entity. It is not possible to choose a subset of investors which you would like to share the documents with.

Access to peer group results:

GRESB provides an opt-in option that will disclose the entity’s name (public) or fund manager’s name (private), as well as the scores for the different Components, to participants in the peer group that also opted to disclose their name and Component scores.

As a default, GRESB does not disclose a participant’s data to other participants. For listed entities, the entity name is disclosed in the Benchmark Report, as well as the entity names of listed peer group constituents. For non-listed entities, only the fund manager’s name is disclosed, as well as the fund manager’s name of private peer group constituents.

Access to asset-level data:

The 2021 Assessment requires participants to report the Energy, GHG, Water, Waste, Building Certifications efficiency measures at the asset level. This asset-level data provided to GRESB is strictly confidential and will only be used to check and validate the aggregated portfolio performance data. It will not be passed on to any external party, be it investors or others, in any way that allows the data to be traced back to the asset, without the explicit consent of the participant.

GRESB has developed a number of tools to assist participants with the collection and aggregation of asset-level data that is required to complete certain aspects of the Assessment. Property companies and funds are encouraged to use the asset level tools to streamline data flows, and to increase data quality. The asset-level data provided to GRESB is strictly confidential and will only be used for aggregation to portfolio level. No individual asset level information will be disclosed to participants’ investors.

Asset-level data will be used in an aggregated form, and non-traceable manner, in the following ways:

The main driver for asset level reporting is to improve investor confidence in data quality. In addition, it enables us to provide participants with additional insights into the impact of their ESG programs, the basis for and paves the way for more tailored assessments in the future.

GDPR compliance:

GRESB is fully compliant with GDPR. The GRESB Privacy Statement can be found here. We also have specific internal policies, such as our Data Breach Policy and our Data Protection Policy, related to GDPR that we cannot share externally for security reasons. Please note that asset level data does not fall under the incidence of GDPR because it does not contain any personal data.

Cybersecurity:

GRESB’s data security measures and systems have been reviewed by an external expert and no issues were flagged. The GRESB website and the GRESB Portal are fully HTTPS/TLS encrypted. GRESB has strict and extensive policies on data security that cannot be shared externally for security reasons. GRESB’s public policies can be accessed here.

Grace Period

First year participants can submit the Assessment without providing GRESB Investor Members with the ability to request access to their results. This is referred to as a “Grace Period”.

First year participants wishing to report under the Grace Period can select the option on an entity-by-entity basis from the settings section in the Assessment Portal. Participants who select the “Grace Period” option can decide to unselect the option following receipt of their results. The Grace Period is not available in the second year of participation, regardless of whether it was used in the first year or not.

The “Grace Period” allows participants a year to familiarize themselves with the GRESB reporting and assessment process. The names of participating entities are still visible during the Grace Period, but GRESB Investor Members will not be able to request to see their results.

Participant Tools

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

The tools are designed to streamline data flows and increase data quality.

In 2021, participants can use the online GRESB Asset Portal or a data partner system to upload asset-level data for the following indicators:

GRESB Real Estate Assessment and Reference Guide Structure

Allocation to E, S, G

Each indicator is allocated to one of the three ESG dimensions (E- environmental; S- social; G- governance):

The score breakdown by the E, S, G dimensions within each component is presented below.

ESG
Management0%35%65%
Performance89%11%0%
Development73%21%6%

Assessment indicator structure

Every indicator in the 2021 Assessment can be answered with ‘Yes’ or ‘No’ and in some cases with ‘Not applicable’. If ‘Yes’ is selected, the participant has the option to further classify the response by selecting one or more sub-options.

Participants should select all sub-options that accurately describe the entity and for which the entity can provide evidence. If ‘No’ or ‘Not applicable’ is selected, the participant may not select any additional sub-options. “A Not Applicable” answer is interpreted and scored in the same way as a “No” and will yield 0 points. Each indicator displays the corresponding 2020 indicator, or ‘NEW’ if the indicator has been added in 2021. This is also reflected in the guidance notes for every indicator.

Evidence

Selected indicators in the Assessment require supporting evidence. Evidence is information that can be used to validate the overall answer to the indicator and support the additionally selected criteria.

GRESB does not have a prescriptive standard for evidence, rather the expectation is that a validator with reasonable domain expertise can review the evidence and find support for the overall indicator response and selected answer options. This means that the uploaded evidence must clearly reference the answer options selected by the participant. The evidence must not require extensive interpretation or inference, and participants are strongly encouraged to provide the simplest evidence that supports their claim.

Hyperlink

If a hyperlink (or deep link) is provided, ensure that the relevant page can be accessed within two steps. Ideally, the landing page should contain all the information needed to validate the answer. In order to qualify as valid supporting evidence, the evidence provided must demonstrate the existence of the relevant topic relating to each of the criteria selected. The participant has the obligation to ensure that the hyperlink is functioning. Broken links are the responsibility of the participant and will be interpreted as the absence of evidence. Hyperlinks can only be provided if indicated. In all other instances, the actual document should be uploaded. Hyperlinks in uploaded documents will not be checked.

Language

Your Assessment response must be submitted in English. Documents uploaded as supporting evidence do not need to be entirely translated. However, for evidence provided in languages other than English, a thorough summary sufficient to convey the requirements have been met is required for validation purposes. Participants may make use of the open text box to provide the document(s) summary. In addition, each selected issue must be identified in the evidence uploads by providing page number and exact location such as paragraph, clause, sentence, bullet number, etc.

GRESB intends to translate the 2021 GRESB Real Estate Assessment into Japanese. For other languages, the GRESB Assessment Portal can be translated by using “Google translate” via the Google Chrome web browser. This applies to the Assessment Portal, guidance notes, and online version of the Reference Guide.

How to use Google Translate:

  1. On your computer, open Chrome.
  2. Go to the web page you wish to translate in another language.
  3. At the top, click the Translate icon.
  4. Chrome will translate the web page this one time.

Turn translation on

You can control whether Chrome will offer to translate web pages.

  1. On your computer, open Chrome.
  2. At the top-right, click ⠇ >Settings.
  3. At the bottom, click Advanced.
  4. Under 'Languages', click Language.
  5. Tick or untick 'Offer to translate pages that aren't in a language you read'.
  6. If the page is not yet being translated to your language, click on the Translate icon again, select “options”, and make sure your “Translation language” is not set to something else. If it is, change it to the desired language for translation.

Disclaimer

Please note that not all text may be translated accurately or be translated at all. GRESB is not responsible for incorrect or inaccurate translations. GRESB will not be held responsible for any damage or issues that may result from using Google Translate.

Open text boxes

Over the years, the number of scored open text boxes has been reduced to zero in an effort to shift focus from management to performance. Open text boxes are now only used for reporting purposes and to provide additional context for a subset of indicators. Note that the contents of the open text boxes are included in the GRESB Benchmark Report.

“Other” answers

Many indicators offer the opportunity to provide an alternative answer option (‘Other’). These other answers must be distinct from the options listed in the question. It is possible to add multiple other answers, however scores will not be aggregated. All Other answers are validated as part of the data validation process.

Indicator-specific guidance

The indicator-specific guidance contains:

Reporting year

Answers must refer to the reporting year identified in EC4: Reporting year in the Real Estate Assessment, unless the indicator specifies otherwise.

A response to an indicator must be true at the close of the reporting year; however, the response does not need to have been true for the entire reporting year. For example, if a policy was put in place one month prior to the end of the reporting year, this is acceptable, it need not have been in place for the entire reporting year. GRESB does not favour the use of calendar year over fiscal year or vice versa, as long as the chosen reporting year is used consistently throughout the Assessment.

Reporting entity

Answers must be applicable to the entity level. When a participating entity is part of a larger investment management organization or group of companies (the ‘Organization’), GRESB participants should use the open text box to explain how the answers apply to the entity.

In the GRESB Terms and Conditions, the term ‘Participating Portfolio’ refers to a ‘(Reporting) Entity’ as used in the in the GRESB Assessments, Guidance materials (e.g., Reference Guides and Scoring documents), GRESB Products (e.g., Benchmark Reports and PAT), the GRESB Portal, and in GRESB Training materials.

Scoring Methodology

The 2021 Real Estate Assessment is structured in three components: Management, Performance and Development:

Each Component is divided into Aspects; aspects comprise of individually scored indicators. This Reference Guide provides detailed insight into the points available for each indicator, and the weighting of Assessment aspects. The information in this section provides additional context. Points per indicator are decided by GRESB in advance of the Assessment opening for responses. Indicator scoring goes through a three-stage review process based on GRESB’s rules, principles and guidelines.

Points Per Indicator

For indicators where you can select one or more answers, GRESB awards points cumulatively for each individual selected answer 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 answers in order to receive full points. This scoring mechanism allows the diversity among property companies and funds and the variety of their sustainability-oriented activities to be reflected. Supporting evidence and open fields for which participants select ‘other’ answers, are manually validated. Points are awarded based on the validity of the response.

Scoring Model

The scoring model is based on an automated system, which uses a technology platform designed for GRESB by a third party that specializes in data analysis software development. The scoring is completed without manual intervention after data validation has been completed.

The sum of the scores for each indicator adds up to a maximum of 100 points. The maximum score for each aspect is a weighted element of the overall GRESB Score. GRESB takes into account the unique characteristics of different property types, not only in benchmarking absolute scores, but also in the scoring of a selection of indicators. A selection of indicators is scored based on each portfolio’s main property types – this holds specifically for the Energy, GHG, Water, Waste and Building Certifications indicators.

The max Overall Score = 100, corresponding to 100 points, can be obtained as follows:

ComponentAspect# Points% Component% Overall Score
ManagementLeadership723%7%
Policies4.515%5%
Reporting3.512%4%
Risk Management517%5%
Stakeholder Engagement1033%10%
Total30100%30%
PerformanceRisk Assessment913%9%
Targets23%2%
Tenants & Community1116%11%
Energy1420%14%
GHG710%7%
Water79.5%7%
Waste45.5%4%
Data Monitoring & Review5.58%6%
Building Certifications10.515%11%
Total70100%70%
DevelopmentESG Requirements1217%12%
Materials69%6%
Building Certifications1319%13%
Energy1420%14%
Water57%5%
Waste57%5%
Stakeholder Engagement1521%15%
Total70100%70%

The GRESB Real Estate Benchmark consists of participants completing both the Management and Performance Components. The GRESB Development Benchmark consists of participants completing both the Management and Development Components. While each Component determines an individual score (ie: Management Component Score, Performance Component Score, Development Component Score), the GRESB Scores and GRESB Ratings only apply to entities completing all relevant Components for their portfolios. The possible combinations are set out below and illustrated in the diagram that follows:

A: Portfolios with only standing investments submit:

B: Portfolios with only development projects submit:

C: Portfolios with both standing investments and development projects submit:

The detailed scoring methodology as applied to each indicator is available here and can be accessed by participants via the Assessment Portal on April 1, 2021. This is shared for information purposes in an effort to increase transparency around the Assessment, Methodology and Scoring processes. GRESB reserves the right to make edits to this document during the scoring and analysis period preceding the 2021 results launch.

Evolution of scores

Along with splitting the Assessment into Components in 2020, the overall emphasis will move, over the next four years, from the current emphasis on management and transparency to greater emphasis on performance. This will occur through three main mechanisms:

  1. Scoring of Performance Indicators will move from a focus on reporting and transparency to actual performance with asset-level reporting now mandatory. Note that at the moment, most indicators in the Performance Component are actual performance metrics. For example, data coverage or data quality indicators are not metrics of performance, but they recognize data availability, crucial for measuring true performance.
  2. At the same time, Performance Indicator metrics will be standardized to provide for better comparisons and higher quality data. These metrics will allow appropriate absolute and relative comparisons to be made and reward actual performance (utilising intensity metrics, performance against suitable targets and/or year on year improvements).
  3. As the weighting emphasis moves, we will thin out some of the indicators in the Management Component, retaining those that add the most value (e.g. where they differentiate participants; investors have most interest; the metrics are easy to report, measure, and validate; and the score weighting remains significant).

It is important that the aspect weights accurately reflect investor preference as it is precedent setting and a baseline for future improvements in scoring.

GRESB Rating

The GRESB Rating is an overall measure of how well ESG issues are integrated into the management and practices of companies and funds. The rating is based on the GRESB Real Estate Score and its quintile position relative to the GRESB universe, with annual calibration of the model. It is calculated relative to the global performance of all reporting entities - property type and geography are not taken into account. In this way the GRESB Rating provides investors with insight into the differentiation of overall ESG performance within the global property sector. If certain regions systematically perform better, they will on average have higher-rated companies and funds. If the entity is placed in the top quintile, it will have a GRESB 5-star rating; if it is in the bottom quintile, it will have a GRESB 1-star rating, etc.

Entities with more than 15 points (or 50%) in Management and 35 points (or 50%) in Performance OR 15 points (or 50%) in Management and 35 (or 50%) points in Development will receive the Green Star designation, highlighted through a distinctive markup in the Scorecard and Benchmark Reports.

Entity categorization

A pre-set threshold determines an entity’s geographic location and property type:

Peer group allocation

Each participant is assigned to a peer group, based on the entity’s legal structure (public/private), property type and geographical location. To ensure participant anonymity, GRESB will only create a peer group if there is a minimum of six peers in the group.

Peer group assignments do not affect a company/fund’s score, but determine how GRESB places an Assessment participant’s results into context.

The goal of the peer group creation process is to compare participants who share as many characteristics as possible, while:

Each participant can be part of multiple peer groups, but can only have one active peer group. The active peer group is displayed in the participant’s Benchmark Report. This means that participant A can be in the active peer group of participant B, without participant B being in the active peer group of participant A. The practical consequence of this is that A will be displayed in the Benchmark Report of B under “Peer Group Constituents”, while B will not be displayed in the Benchmark Report of A.

The peer group composition is determined by a simple set of quantitative rules and provides consistent treatment for all participants. If the peer group is too small or has too many participants with the same fund manager, we eliminate filters until we have a valid peer group. There are two ways in which the filter can be widened:

The system attempts to find the best peer group based on the criteria presented above. For more information about the peer group allocation methodology, see Appendix 3b - Peer Group Allocation Methodology.

Peer group disclosure

For public companies, the entity name of the peer group constituents is disclosed in the Benchmark Report. For private entities, only the fund manager’s name of the peer group constituents is disclosed. GRESB provides an opt-in option that discloses the entity’s name (listed) or fund manager’s name (private), as well as the scores for the two components (Management + Performance or Management + Development). However, this is only disclosed to participants in the peer group who also opted to disclose their name and component scores.

Customized Benchmark Reports

Participants who would like to be compared against a different peer group than the one assigned by GRESB can request a Customized Benchmark Report (click here for details). The GRESB Customized Benchmark Report provides advanced analytics through alternative indicator-level performance comparisons and rankings based on a self-selected peer group. It builds on the detailed insights you can draw from the standard Benchmark Report and adds additional flexibility to understand your relative performance in the market.

GRESB Data Validation Process

Data validation is an important part of GRESB’s annual benchmarking process. The purpose of data validation is to encourage best practices in data collection and reporting. It provides the basis for GRESB’s continued efforts to provide investment grade data to its investor members.

GRESB validation is a check on the existence, accuracy, and logic of data submitted through the GRESB Assessments. The validation process includes both automatic and manual validation.

Automatic validation is integrated into the portal as participants fill out their Assessments, and consists of errors and warnings displayed in the portal to ensure that Assessment submissions are complete and accurate.

Manual validation takes place after submission, and consists of document and text review to check that the answers provided in Assessment are supported by sufficient evidence. The validation rules and process are set and overseen by GRESB but the validation is performed by our third-party validation provider, SRI.

SRI Quality System Registrar (SRI) provides third-party validation services for GRESB. SRI is an accredited, independent certification body, and its subject matter experts will conduct the independent assessments of self-reported ESG data in the GRESB manual validation process.

For more information about the 2021 Validation Process, see Appendix 2a - 2021 GRESB Validation Process.

Validation issues: queries and disputes (Review Period)

Participants with questions on individual validation decisions can contact the GRESB Helpdesk.

In 2020, GRESB introduced a new Review Period (see Appendix 4a for more information) in the Assessment Cycle to further strengthen the reliability of our Assessments and benchmark results. The Review Period will start on September 1, when preliminary individual GRESB results will be made available to all participants and run for the month. During the Review Period, participants will be able to submit a review request to GRESB using a dedicated form. The final results will be launched to both participants and Investor Members on October 1. Public Results events and other results outputs will be rescheduled to October and November in order to accommodate the September Review Period.

Participants who want to communicate specific points on the results presented in the Benchmark Report can use the “Respondent score comments” field – this will be seen by investors

For a complete interpretation of the validation decisions in the Assessment, participants can request a Results Review. For more information about the Results Review, click here.

Reporting Scope and Boundaries

GRESB requires property companies and funds to report on their whole portfolio, including both Landlord Controlled and Tenant Controlled areas (see below).

The Annual GRESB Assessment includes all assets that are held during the reporting year, including those that have been sold or purchased. For these assets, ESG data is reported for the period of time that the assets were part of the portfolio. This enables us to deliver the standardized and comparable assessment of portfolio-level ESG performance that the market is seeking. However it is also worth noting that in addition to simple overall scores of ESG performance - such as the GRESB Real Estate Score and GRESB Ratings - we provide detailed aspect-level and individual indicator-level assessments of performance. This richer analysis, further complimented by peer group benchmarking, enables managers to understand their results in the context of their investment strategies and communicate this to their investors.

Joint ventures

GRESB requires property companies and funds to report on their whole portfolio, including both Landlord Controlled and Tenant Controlled areas (see below for specific guidance), but excluding vacant land, cash, ground leases or other non-real estate assets owned by the entity.

When an asset is owned as part of a joint venture (JV), joint operation, or is in joint ownership, participants are required to report on these assets (unless subject to exception below), even if the joint arrangement means that the participant does not have direct operational control over the asset(s).

If the equity share in a JV is equal to or more than 25%, participants may choose to either:

If the equity share in a JV is less than 25%, participants are allowed to exclude the asset(s) from the reporting boundaries. In either case, participants must explain their approach in the open text box in indicator R1.1.

Note: Participants may choose to express the GAV size of the assets using the rules above, but they must always represent the full asset by floor area and performance data.

If an asset is part of multiple portfolios managed by the same fund manager, the asset should be treated as a JV in each portfolio. The rules outlined If an asset is part of multiple portfolios managed by the same fund manager, the asset should be treated as a JV in each portfolio. The rules outlined above apply.

Landlord/Tenant Controlled Areas

In the past, GRESB used to classify assets as Managed or Indirectly Managed. Such classification was based on the notion of operational control and aligned with the GHG Protocol. In 2020, this concept was replaced by "Landlord Controlled" and "Tenant Controlled" areas, where the same notion of operational control applies to differentiate one from the other. However, while the rationale remains unchanged compared to previous years, the distinction now takes place at the space/area level. Consequently, one asset can include both landlord and tenant controlled areas. The definition of Landlord and Tenant Controlled areas in the Assessment is solely based on the landlord/tenant relationship.

Landlord controlled areas are those for which the landlord is determined to have “operational control” where operational control is defined as having the ability to introduce and implement operating policies, health and safety policies, and/or environmental policies. If both the landlord and tenant have the authority to introduce and implement any or all of the policies mentioned above, the area should be reported as landlord controlled. Where a single tenant has the greatest authority to introduce and implement operating policies and environmental policies, the tenant should be assumed to have operational control. For example, in the case of a full repairing and insuring (FRI) lease in England and Wales, the tenant has operational control meaning that the area is tenant controlled.

GRESB distinguishes between Landlord and Tenant Controlled areas in the Energy, GHG Emissions, Water, and Waste aspects of the Performance Component. GRESB has done so in recognition of the fact that landlords of tenant controlled areas may have little or no control over the use or purchase of utilities for the asset, or over waste management practices. The guidance for this aspect explains GRESB’s approach in more detail.

GRESB does not specifically distinguish between landlord-and tenant controlled areas outside of the Energy, GHG Emissions, Water, and Waste aspects.The Assessment measures ESG performance using a consistent methodology that applies both to listed companies and private funds and which applies across property sectors and regions. GRESB encourages the collection of data and qualitative information regarding ESG issues that give property companies and funds and their investors the tools to identify areas in which they can improve performance and as a toolkit for internal and external engagement.

Furthermore, while GRESB does measure absolute performance, it emphasizes the importance of peer group comparisons in scoring and the analysis of benchmark results. Where participant numbers allow this, GRESB creates separate peer groups for each property type, for listed and private entities and for Landlord and Tenant Controlled areas. Additionally, participants have the opportunity to explain the composition of their portfolio in the open text box in R1.1, including clarifying limits on asset control that arise from the landlord/tenant relationship.

With these factors in mind, while the landlord’s day-to-day involvement in tenant controlled areas may be limited, the topics covered by the Assessment are equally relevant to landlord controlled areas. Accordingly, the same questions and methodology apply.

2021 GRESB Real Estate Assessment Changes

GRESB works closely with its members and broader industry stakeholders to ensure the Assessment addresses material issues in the ESG performance of real estate investments. After the significant structural changes and introduction of mandatory asset level reporting in 2020, this year’s Assessment changes are strictly limited to the integration of the Resilience Module and minor Assessment improvements.

For a full list of the 2021 Real Estate Assessment Changes, see Appendix 1.

This section provides an overview of the 2021 Real Estate Assessment Changes.

As publicly announced in our Advance Communication in late 2020 (section Improvement for 2021 and Beyond), GRESB committed to limiting changes to the Real Estate Assessment as much as possible in 2021 in order to provide stability in year-on-year reporting.

This is consistent with the overall conclusions of GRESB’s engagement with its governance groups (four regional Benchmark Committees and one global Advisory Board) in late 2020 and early 2021. During those discussions, it was acknowledged that the market requires as much stability as possible in the 2021 reporting cycle, both on the Assessment input side (indicators scope and reporting format), as well as output (consistency in validation and scoring requirements).

As a result, the Real Estate Assessment has not been subject to any material development in 2021, with the exception of the integration of the Resilience Module into the main Assessment (see below). This integration was announced back in 2018 when the module was launched. Note that the newly introduced indicators are not scored in 2021 and will have no impact on the overall GRESB Scores.

In 2019, GRESB announced its intention to implement updated Building Certification validation criteria in the 2021 Assessment. Although the overall feedback from the governance groups was positive, it was indicated to further refine and tighten the list of eligible themes and criteria, and to consider incorporating the certification levels in the scoring methodology. This implementation has therefore been postponed, and a dedicated Working Group will therefore be set up to further develop this approach for the future iterations of the Real Estate Assessment.

The intention to keep the Assessment stable in 2021 also applies to the performance indicators aspects, namely Energy, GHG, Water and Waste. While GRESB’s governance groups recognize that the impact Covid-19 had on various property types and countries in 2020 was vastly disparate, it should not be the reason to revise the scoring approach of Data Coverage and LFL Change (%) in 2021. In addition, the GRESB Outlier Model (see Appendix 2a of the Reference Guide) including the soft lower and upper thresholds for both LFL Change (%) and Intensities also remain unchanged in 2021. GRESB Participants will be prompted to support outliers flagged at the asset-level if those exceed thresholds provided in Appendix 2a of the Reference Guide. Note that soft outliers are only flagged so that Participants can check their input data and make corrections if necessary, and have consequently no direct impact on the GRESB Scores. Finally, GRESB intends to conduct an analysis of those metrics for all property types post-submission and loosen outlier thresholds where necessary. The sole purpose of this analysis will be to ensure that the data points included in the Benchmark are representative of the submitted data, and will consequently have no direct impact on Participants' submissions.

This much needed year of predictable outcomes (as far as GRESB methodology is concerned) will provide time to prepare for bigger step changes to implement for 2022. The governance groups, as well as GRESB, firmly recognize the urgent need to move to a more performance-based Assessment. This will be the main focus for internal Assessment developments and engagement with the industry through the GRESB Foundation in 2021, in preparation of the 2022 Assessment.

Management Component

High-level comments

Integration of Resilience Module

The Resilience Module, which was previously optional, has been integrated into the Management Component. Five new indicators have been added to the Risk Management Aspect (see below New indicator) and changes have been made to two indicators in the Leadership Aspect (see below Resilience integrated). None of this additional content is scored in 2021.

Indicator-level comments

LE3

Individual responsible for ESG and/or climate-related objectives - Resilience integrated

Description: The indicator has been restructured. It is now split between ESG and climate-related issues so that entities can provide different contact details for each topic.

Rationale for change: This indicator change is part of the integration of the Resilience Module and is aligned with the TCFD recommended disclosures.

Impact of change: Small increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

LE5

ESG and/or climate-related senior decision-maker - Resilience integrated

Description: The indicator has been restructured. It is now split between ESG and climate-related issues so that entities can provide different contact details for each topic.

Rationale for change: This indicator change is part of the integration of the Resilience Module and is aligned with the TCFD recommended disclosures.

Impact of change: Small increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

LE6

Personnel ESG performance targets - Selection option removed

Description: The “All employees” option has been removed.

Rationale for change: This option was overlapping with other selection options, which led to confusion by participants and validators.

Impact of change: Participants will have to select all individual employee groups with financial and non-financial consequences. This indicator will not be pre-filled in 2021.

RM5

Resilience of strategy to climate-related risks - New indicator

Description: Added new indicator on resilience of strategy to climate-related risks. This new indicator is not scored in 2021.

Rationale for change: This indicator is part of the integration of the Resilience Module and is aligned with the TCFD recommended disclosures.

Impact of change: Small increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

RM6.1

Transition risk identification - New indicator

Description: Added new indicator on identification of climate-related transition risks. This new indicator is not scored in 2021.

Rationale for change: This indicator is part of the integration of the Resilience Module and is aligned with TCFD reporting recommendations.

Impact of change: An increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

RM6.2

Transition risk impact assessment - New indicator

Description: Added new indicator on assessment of climate-related transition risks. This new indicator is not scored in 2021.

Rationale for change: This indicator has been added as part of the integration of the Resilience Module and is aligned with TCFD reporting recommendations.

Impact of change: An increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

RM6.3

Physical risk identification - New indicator

Description: Added new indicator on identification of climate-related physical risks. This new indicator is not scored in 2021.

Rationale for change: This indicator has been added as part of the integration of the Resilience Module and is aligned with TCFD reporting recommendations.

Impact of change: An increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

RM6.4

Physical risk impact assessment - New indicator

Description: Added new indicator on assessment of climate-related physical risks. This new indicator is not scored in 2021.

Rationale for change: This indicator has been added as part of the integration of the Resilience Module and is aligned with TCFD reporting recommendations.

Impact of change: An increase in reporting burden that allows entities to report according to TCFD reporting recommendations.

SE1

Employee training - Improved structure

Description: Allow no E, S or G option to be selected when “ESG-specific training” is not completed.

Rationale for change: If a participating entity provides professional training for employees which is not ESG specific, one of the Environmental, Social, and Governance selection options still had to be selected. This is longer the case.

Impact of change: Improved indicator structure.

Performance Component

High-level comments

Review of Appendix 7 - Estimation methodology

Based on feedback received by the industry and in consultation with several of GRESB’s Data Partners, the Estimation methodology Appendix has been reviewed. The guidance is now divided into three clear conditions under which data estimates are allowed and it no longer refers to a data gap as the sole reason for data estimation.

Indicator-level comments

T1.1

Portfolio improvement targets - Improved automatic validation

Description: An automatic validation rule that requires a difference of at least three years between the baseline and end year has been implemented.

Rationale for change: Automated validation that is in line with the GRESB reporting requirements for long-term targets.

Impact of change: Improved data quality.

Asset-level comments

Asset Spreadsheet

Description: Introduction of an optional field for capturing % of Ownership at the asset level.

Rationale for change: This field will be used to refine the aggregation logic for portfolios with joint ventures resulting in higher data accuracy in portfolio-level metrics (e.g. carbon footprint). In 2021, it will be used for reporting purposes only, with the intention to make it mandatory afterwards.

Impact of change: Small increase in reporting burden for participants who choose to complete the field.

GRESB Asset Portal

Description:

  • Dynamic text to inform users on the need for re-aggregation after any manual change entered the Asset Portal.
  • More clarity on when a GRESB Asset Spreadsheet upload/export/aggregation is completed.

Rationale for change: Improvements based on participants’ feedback.

Impact of change: Improved user experience.

Automatic Validation

Description: New Validation rules on renewable energy (EN1) capping Renewable Energy (%) to 100% of Energy Consumed (except Exported).

Rationale for change: This check was already included in the data cleanup process conducted by GRESB after submission deadline. Participants will no longer be able to exceed 100% at the time of reporting.

Impact of change: Improved data quality.

Development Component

Indicator-level comments

DEN2.1

On-site renewable energy

Description: Rephrase the selection option “Geothermal” to “Geothermal steam”.

Rationale for change: The geothermal definition previously included geothermal ground source heat pumps. Both ground source and air source heat pumps can only be considered a low carbon technology as they require some form of electricity to operate. As electricity is required to operate the pump, it cannot be considered renewable energy generation.

Impact of change: Participants who previously selected Geothermal must review the selection given the new guidance and definition. This indicator will not be pre-filled in 2021.

DBC1.1

Green Building Standard requirements

Description: The percentage of portfolio covered drop-down quartile options have been replaced with absolute percentage values. In addition, a validation cap of 100% has been introduced to avoid reporting of overlapping percentages.

Rationale for change: More precise reporting of portfolio coverage, which will ensure better manual validation.

Impact of change: Improved data quality.

Entity & Reporting Characteristics

Entity Characteristics

Reporting Characteristics

Management: Leadership

ESG Commitments and Objectives

2020 Indicator

Not scored , G

1 point , G

ESG Decision Making

2020 Indicator

2 points , G

1 point , G

1 point , G

2 points , G

Management: Policies

ESG Policies

2020 Indicator

1.5 points , G

1.5 points , G

1.5 points , G

Management: Reporting

ESG Disclosure

2020 Indicator

3.5 points , G

ESG Incident Monitoring

2020 Indicator

Not scored , G

Not scored , G

Management: Risk Management

Risk Management

2020 Indicator

2 points , G

0.5 points , G

Risk Assessments

2020 Indicator

0.5 points , S

0.5 points , G

1.5 points , G

Climate-related Risk Management

2020 Indicator

Not scored , G

Not scored , G

Not scored , G

Not scored , G

Not scored , G

Management: Stakeholder Engagement

Employees

2020 Indicator

1 point , S

1 point , S

1 point , S

0.75 points , S

1.25 points , S

0.5 points , S

0.5 points , S

Suppliers

2020 Indicator

1.5 points , S

1 point , S

1 point , S

0.5 points , S

Performance: Reporting Characteristics

Reporting Characteristics

Performance: Risk Assessment

Risk Assessments

2020 Indicator

3 points , E

3 points , E

Efficiency Measures

2020 Indicator

1.5 points , E

1 point , E

0.5 points , E

Performance: Targets

Targets

2020 Indicator

2 points , E

E

Performance: Tenants & Community

Tenants/Occupiers

2020 Indicator

1 point , S

1 point , S

1 point , S

1.5 points , E

1.5 points , E

0.75 points , S

1.25 points , S

Community

2020 Indicator

2 points , S

1 point , S

Performance: Energy

Energy Consumption

2020 Indicator

14 points , E

Performance: GHG

GHG Emissions

2020 Indicator

7 points , E

Performance: Water

Water Use

2020 Indicator

7 points , E

Performance: Waste

Waste Management

2020 Indicator

4 points , E

Performance: Data Monitoring & Review

Review, verification and assurance of ESG data

2020 Indicator

1.75 points , E

1.25 points , E

1.25 points , E

1.25 points , E

Performance: Building Certifications

Building Certifications

2020 Indicator

7 points , E

8.5 points , E

2 points , E

Development: Reporting Characteristics

Reporting Characteristics

Development: ESG Requirements

ESG Requirements

2020 Indicator

4 points , G

4 points , E

4 points , E

Development: Materials

Materials

2020 Indicator

6 points , E

Not scored , E

Not scored , G

Development: Building Certifications

Building Certifications

2020 Indicator

4 points , E

9 points , E

Development: Energy

Energy

2020 Indicator

6 points , E

6 points , E

2 points , E

Development: Water

Water Conservation

2020 Indicator

5 points , E

Development: Waste

Waste Management

2020 Indicator

5 points , E

Development: Stakeholder Engagement

Health, Safety & Well-being

2020 Indicator

2 points , S

1.5 points , S

1.5 points , S

Supply Chain

2020 Indicator

2 points , S

2 points , S

Community Impact and Engagement

2020 Indicator

2 points , S

2 points , S

2 points , S