2018 GRESB Real Estate Results | Singapore
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Thursday, September 20 Hosted by City Developments Limited, in partnership with APREA and Green Building Council Australia, and supported by ANREV, RICS, Singapore Green Building Council, and PRI
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2018 GRESB Real Estate Results | Singapore
- 1. 2018 RESULTS Sustainable Real Assets Hosted by: In partnership with: Supported by:
- 2. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
- 3. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
- 4. 2013 2011 2012 2014 2015 2016 2018 Global Average 2017
- 5. 2013 2011 2012 2014 2015 2016 2018 Global Average 2017
- 8. Listed sector still in the lead…. Private Listed
- 9. …while Asia is showing progress Europe Asia North America Australia/NZ
- 11. So… What’s next?
- 13. All new buildings must operate at net zero carbon by 2030 All buildings must operate at net zero carbon by 2050 or earlier Sustainable Real Assets
- 14. Performance assessments based on reliable data Healthy Resilient Efficient Sustainable Real Assets Connected Healthy Resilient Efficient Certified Business continuity Positive social impact Landlord-tenant collaboration AccessibleMonitored
- 15. Healthy 2016 2017 174 252 2018 297 North America Europe Asia Aus/NZ Other Leaders 62 127 155 (52%)
- 17. Resilient STAKEHOLDER ENGAGEMENT RISK ASSESSMENT GOVERNANCE PROMOTION STRATEGIES AND ACTIONS RESPONSE 0% 100%
- 18. GRESB Universe (Like-for-like) GRESB Universe Target SDG Target 7.3 (2.6%) Efficient 2017
- 19. Efficient 0 25 75 50 100 2010 2020 2030 2040 2050 GRESB Universe (Like-for-like) actuals 2017 SDG Target 13 GRESB Universe Target
- 20. Efficient [10%] Absolute [30%] Like-for-like [29%] No target [31%] Intensity based
- 21. Efficient Sustainable Real Assets Healthy Resilient
- 22. Efficient 79,388 total assets 49,910 reported at asset level 74% of total entities 53 countries 834.3 million sqm
- 23. Efficient 79,388 total assets 49,910 reported at asset level 74% of total entities 53 countries 834.3 million sqm 20,000 15,000 10,000 5,000 0 85% 62% 71% 57% 41% 49% 29% Total Assets Reported at asset level
- 24. Efficient Office 181 kwh/m2 200 kwh/m2 135 kwh/m2 134 kwh/m2 159 kwh/m2 147 kwh/m2 173 kwh/m2
- 25. Sustainable Real Assets • Sustainable real assets goals • ESG performance metrics • Assessment reporting guidelines • Data capture and quality assurance processes • Scoring and benchmarking approach
- 26. Global Sector Leaders from Asia
- 28. 2018 RESULTS Sustainable Real Assets 903 entities 64 countries 79,000 assets $3.5 trillion GAV
- 29. 2018 RESULTS Sustainable Real Assets Hosted by: In partnership with: Supported by:
- 30. PANEL DISCUSSION MODERATOR: Peter Verwer Chief Executive, APREA PANELLISTS: Marion O'Donnell Associate Director, ESG, Fidelity Hardik Shah ESG Practice Manager, GMO Dan Chi (DC) Wong Global ESG Specialist, Nikko Asset Management Michael Long Head of Sustainability, Asia, Lendlease
- 31. 2018 RESULTS Sustainable Real Assets Hosted by: In partnership with: Supported by:
Editor's Notes
- Welcome to this year’s GRESB results launch event. We kept you on the edge of your seat for a little longer than expected this year, but fortunately, you’ve all had the chance to check your individual GRESB results prior to this event. From our side, there was more data to collect, validate and benchmark, as this year’s response rate grew to 903 real estate participants globally, of which 76 from Australia and New Zealand. We know you’re very excited to find out how you as a region did this year, so let’s look at this year’s GRESB results straight away.
- 2018 was certainly another year of improved ESG performance regardless of region or sector. Congratulations to everyone for contributing to this improvement!
- It is worth taking a closer look at that top right corner, as it now represents 78% of the benchmark (meaning 78% entities are Green Stars). On one hand, this tells us that the ESG conversation has shifted from “show me” to “look at me!” because most parties reporting to GRESB understand what proper ESG programs should look like and what’s more important, how to go about and implement them. On the other hand, with so many market participants competing to outperform their peers, we’ll have to raise the bar as well to properly identify best ESG practices and recognize industry leaders.
- When looking at the performance of listed entities versus private funds, the gap is narrowing down, although the listed sector still is in the lead. The non-listed sector, scoring 62, was slightly lagging the global average (67), indicating that private entitles in Asia will have to work harder to keep up with global improvements on ESG performance. And the question you’ve all been waiting for: what about the regions?
- The regional average GRESB Score increased from 63 in 2017 to 66 in 2018, demonstrating a sector making improvements in overall sustainability performance. The improvements are most notable in the listed sector, with the average score for listed entities in Asia (71) coming in higher than the global average (69).
- Nevertheless, in general we can conclude that the real estate sector is closing the performance gap between the leaders, and those at the beginning of their sustainability journey. This year, first-time participants entered the benchmark at an all-time high score: 56 out of 100, indicating they certainly aren’t oblivious when it relates to properly addressing ESG issues. The average score of the 42 entities who have been consistently reporting for 9 years is 80, which shows that the commitment to report to GRESB provides them with the tools they need to keep on improving their performance.
- Everyone is doing great on the existing “ESG exam” and it’s really impressive to see that top corner so crowded, but this begs us to answer the question: what’s next?
- At GRESB, our vision is quite straightforward: Sustainable - Real - Assets Three words we’ve given a lot of thought lately because what is sustainable today might not be so in the future. So, let’s have a look at what we think the future beholds for the built environment.
- As you all know, the WorldGBC launched its “Advancing Net Zero” project, which aims to promote and support the acceleration of net zero carbon buildings by 2050 or earlier. “Or earlier” appears to be a stretchy concept, because last week, the WorldGBC launched a new Net Zero Carbon Buildings Commitment. This Commitment calls on all global stakeholders to reach net zero operating emissions in their portfolios as early as 2030. And here in Singapore, the BCA has launched the “Super Low Energy Program” to push the envelope of environmental sustainability. We support these important initiatives and applaud the industry’s commitment to step up on climate action.
- Importantly, the investment community that GRESB represents believes that buildings need to be more than just net zero in order to be truly sustainable. When investors think of investment-grade buildings of the future, they want them to be efficient, healthy, and resilient. Which is why these three key topics will be the focus of our work over the next years. Importantly, we’ll also need to assess the performance of buildings and portfolios based on reliable data. More on that later.
- Starting with the topic of health & well-being, we now have “Green Mark for Healthier Workplaces” to spur healthier green buildings. And looking at this year’s GRESB results, we can conclude that health considerations are now standard components of sustainability strategies. Out of the nearly 300 entities that filled out the (voluntarily) Health & Well-being Module this year, 11 obtained a perfect score and more than half (52%) are leading in both internal and external health promotion practices. As a result, this topic now has received sufficient market traction for us to incorporate the most material indicators into the standard Real Estate Assessment from next year onwards. In other words, you can no longer escape health & well-being.
- The second topic is resilience. Our new Resilience Module has been developed in response to organizations that are building a capacity to assess, manage and adapt to social and environmental stressors and shocks. In its first year, the Module was filled out by 121 participants. The first results show strong performance on internal leadership on resilience, but also indicate improvement opportunities on actual responses to shocks.
- What should not come as a shock, is that resilience will get increasingly more attention from investors, regulators, businesses, and communities. Therefore, we’ll launch a dedicated report on the results later this year, accompanied with resilience related events around the globe.
- When looking at the topic of efficiency (for energy, carbon, water), we can draw conclusions about aggregate performance of the GRESB universe against external targets. To illustrate, last year, we already noted that the GRESB universe is on track to meet SDG 7.3, which sets an energy efficiency improvement target by 2030. We observe a similar trend this year, albeit that the average target reported by GRESB participants is slightly lower.
- This year, we’ve also looked at SDG 13, which aims reduce carbon emissions by 40 to 70% in 2050, compared to 2010 levels. Based on our calculations, the target set by GRESB participants is even more ambitious than the 70% target. So, the intention is clearly there, but of course, it remains to be seen if these reported targets will be met. We’ll be watching and monitoring the sector’s progress. And to illustrate the state of the sector regarding net zero: out of all 903 participants, we currently only cover two portfolios that are net zero.
- What is surprising (and a bit disconcerting), is that almost one third of benchmark participants does not set any targets whatsoever. As Lao Tzu said: “If you do not set direction, you may end up where you are heading.” Which most likely isn’t a very pleasant destination for these parties.
- To recap: we agree that we all want healthy buildings, and we know we want them to be resilient. However, with the current focus on climate action, improved energy and carbon efficiency is on top of mind. To truly understand and benchmark how portfolios perform on efficiency, we need reliable and more granular data.
- The good news is that we already have started to collect this data. This year, our database includes more than 79,000 assets, of which almost 50,000 were reported using asset-level reporting tools.
- This represents 74% of portfolios covered by our benchmark. Portfolios for which we can already provide more meaningful insights on energy and carbon efficiency.
- We now also have the critical mass to provide you with detailed insights per property type and per region. And even within countries, so that both global investors and local managers can better determine what constitutes a sustainable asset.
- This is what we, at GRESB, are going to focus on in the years to come. Apart from providing an effective benchmarking tool for investors, and giving away some nice and shiny Sector Leader Awards, we want to empower each of you to get better, and jointly realize our shared vision of sustainable - real - assets… …..and we want to work with you on this. Together with the industry, we want to define: The Sustainable Real Assets goals we want to achieve by 2030: this means more alignment with other reporting frameworks (mapping to SDGs, TCFD) and targets set by our Industry Partners (WorldGBC) The set of ESG Performance metrics we need to implement by 2020: in order to track our Sustainable Real Assets goals, we need to define a set of ESG Performance metrics that measures progress on our goals. How GRESB participants can report (ESG Performance metrics) to GRESB and How we could further improve GRESB data capture and quality assurance processes: Asset vs. Portfolio level / Direct or via (certified) Data Partner. How we should score and benchmark absolute and relative performance going forward: what to do with Green Stars, rankings, peer groups, quintiles.
- We would like to finish by celebrating this year‘s Global Sector Leaders…….
- …and Regional Sector Leaders