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2019 Real Estate Results | San Francisco

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September 26, 2019
Hosted by Measurabl and Boston Properties, in partnership with Verdani

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2019 Real Estate Results | San Francisco

  1. 1. PROGRAM 2019 GRESB Results Registration Welcome and Opening Statements - Ben Myers, Director of Sustainability, Boston Properties GRESB Real Estate 2019 Results • GRESB Real Estate 2019 Results - Neil Pegram, Director of Americas, GRESB - 2019 GRESB Resilience Results & Discussion • Daniele Horton, Founder & President, Verdani Partners GRESB Data Quality Survey Results Data Quality Panel • Josh Myerberg, Managing Director and Portfolio Manager, Morgan Stanley • Jason McIntyre, Director, Real Estate Operations and Sustainability, USAA Real Estate • Ben Myers, Director of Sustainability, Boston Properties • Matt Ellis, Founder & CEO, Measurabl GRESB 2020 and GRESB Q&A Closing – Matt Ellis, Founder & CEO, Measurabl 2:30 pm 3:00 pm 3:10 pm 3:35pm 3:50 pm 4:00 pm 4:40 pm 5:00 pm
  2. 2. Assess and benchmark ESG performance of real assets, providing standardized and validated data to capital markets. 3
  3. 3. Institutional Investors GRESB Assessments Fund managers Listed companies I N V E S T O R P E R S P E C T I V E E S G A N A L Y T I C S E S G A N A L Y T I C S E S G P E R F O R M A N C E D A T A An interactive ESG Data platform for Real Assets
  4. 4. 10 Participants Total property value (USD tn) Properties covered Institutional investors Institutional capital (USD tn) Industry associations 2010 3 100 +100,00 0 ~18,000 0.9 4.1 1,005198 220.3 Partners1 +50 +403 2019
  5. 5. Sustainability / ESG is a journey
  6. 6. Scores distribution AVERAGE GRESB SCORE 40% 30% 20% 10%
  7. 7. Benchmark size & Assets Location
  8. 8. Benchmark size & Assets Location
  9. 9. 2019 Private market coverage “75 of IPE Real Assets’ Top 100 Global Real Estate Investment Managers“
  10. 10. 10 years of impact LIKE-FOR-LIKE REDUCTIONS EQUIVALENT
  11. 11. GRESB Overall Score Development
  12. 12. Regional Scores
  13. 13. Regional Scores
  14. 14. Country scores – Americas & US & Canada CANADA IM: 75.2 MP: 80.5 Overall: 76.6 US IM: 69.9 MP: 79.0 Overall: 72.3 AMERICAS IM: 69.7 MP: 78.6 Overall: 72.0
  15. 15. Reporting of assets 38,274 53,015 8,703 1,089 2,107 # assets AMERICAS EUROPE ASIA OCEANIA AFRICA OTHER
  16. 16. From quantity to quality +100,000 +66,000 +25,000 # assets All assets Assets • Reported at asset-level Assets • Reported at asset-level • With full data coverage • Excluding outliers
  17. 17. AMERICAS Energy Intensities per type & Environmental Impact ENERGY consumed 1.02% WATER consumed -1.48% GHG emitted -0.16% WASTE diverted 14% GLOBAL
  18. 18. Product goal Convey the portfolio performance through showcase of assets Product description • Overview tables and graphs of key PI in GRESB • Asset-level benchmarking (geographic, property type) • Intensities • LFL changes • Data coverages • Ability to share with investors Asset-level intelligence
  19. 19. AMERICAS Building Certifications (% area) GLOBAL 12.8% 8.8% Design/Construction Operational AMERICAS GLOBAL 23.3% 15.8%
  20. 20. EUROPE Building Certifications (% area) GLOBAL 12.1% 8.8% Design/Construction Operational EUROPE GLOBAL 16.0% 15.8%
  21. 21. No content below the line Footer : Never change the footer text on individual slides. Change, turn on or offData color order: Complimentary colors: Dow Jones Green Real Estate Indices Key Attributes 2 • Constructed from the Dow Jones Select Real Estate Securities Indices (RESI), a widely used listed real estate index series with approximately $29bn in index- linked assets* • Utilize data from GRESB – a leader in evaluating the ESG performance of real estate companies • Incorporate property level data that measure such criteria as energy and water usage, carbon emissions and leasable area covered by green building certifications • Index methodology is designed to improve the overall sustainability profile of the index without significantly altering its investment characteristics • Green indices have historically had low tracking error vs conventional real estate benchmarks *Source: S&P Dow Jones Indices; Evestment; Morningstar. ETF data as of 2/28/2019. Index fund and other investment vehicle data as of 12/31/2017. For Financial Professionals Only the line Footer : Never change the footer text on individual slides. Change, turn on or offData color order: Complimentary colors: Dow Jones Green Real Estate Indices Copyright © 2019 by S&P Global. All rights reserved. For Financial Professionals/Not for Public Distribution September 2019 Michael Orzano, CFA Senior Director, Global Equity Indices Product Management
  22. 22. No content below the line Index Methodology Overview 3 *Companies that do not participate in the GRESB real estate assessment are scored as a zero for ranking purposes. Rebalancing occurs annually effective the 3rd Friday of December. Source: S&P Dow Jones Indices. For more information see the index methodology at www.spindices.com. Charts are provided for illustrative purposes. weight reduced by 30% weight increased Each DJ Green Real Estate Index is the result of re-weighting its parent index by relative GRESB ranking, as indicated in the following steps: DJ Global Green RESI DJ Global ex-U.S. Green RESI DJ U.S. Green REIT DJ Japan Green RESI 1) All constituents of each relevant Parent Index are included : DJ Global Select RESI DJ Global ex-U.S. Select RESI DJ U.S. Select REIT DJ Japan Select RESI 2) Within each parent index, constituents are ranked by GRESB Total Score and relative weights are redistributed : • The weight of stocks in the lowest 50th percentile by GRESB score are reduced by 30% from their current weight in the parent index* • The weight of stocks in the highest quartile are increased in order to redistribute the relative weight that was reduced in the prior step GRESBTotal Score Highest Score Lowest Score 25th percentile 50th percentile 3) Re-weighted constituents of each parent index form the new indices : Dow Jones Green Real Estate IndicesDow Jones Select RESI For Financial Professionals Only
  23. 23. GRESB Universe (Like-for-like) GRESB Universe (Targets) UN SDG (Target 7.3) Sustainable Development Goals (SDGs)
  24. 24. Carbon Risk Real Estate Monitor Property Investing in the Age of Climate Risk CRREM “CRREM is a framework for science based decarbonization pathways and a toolkit to identify stranded assets and promote sustainable investments in the real estate industry.” CRREM EU funded H2020 research project: February 2018 – January 2021
  25. 25. NYC Carbon Reduction Law
  26. 26. Resilience module vs. TCFD METRICS AND TARGETS RISK MANAGEMENT STRATEGY GOVERNANCE
  27. 27. RESILIENCE DISCUSSION 2019 GRESB Results Daniele Horton, Founder & President, Verdani Partners
  28. 28. GRESB TCFD-Aligned Resilience Module Results
  29. 29. Resilience Landscape GDP Damages from Climate Change The potential for damages across the US from an increase in average temperature, due to increased frequency of extreme weather patterns, could be as high as 3.5% of GDP in 2100. Global Impact While some countries economies may have relatively low impact overall from climate change, a majority will have negative deviations, especially in South America, Africa, and across the Asia/Pacific regions. . Global reported natural disasters
  30. 30. Resilience Module • The Resilience Module – a 3-year effort to lead to new indicators in the core GRESB Real Estate and Infrastructure Assessments in 2021. • 2018, Resilience Module launched to provide investors and participating companies and funds with information about climate risks and resilience. • 2019, Resilience Module revised to increase alignment with TCFD recommendations – categories: • Governance • Strategy • Risk Management • Metrics and Targets 150 participants In 2018 316 participants In 2019
  31. 31. Broad-based Action • The majority of participants report: • Dedicated leadership • Systematic risk assessment • Aligned business strategies • Some level of performance measurement • Reported actions vary significantly. • Some entities report comprehensive programs • Many have a more limited range of activities
  32. 32. Global Resilience Results Insights Rapid increase in engagement: Asset Investors Companies Fund ~2X since 2018 Interest, expertise, and engagement on climate risk and resilience varies widely. Investors can not assume companies are taking action to understand or mitigate climate- related risks. 25% of participants reported full programs with activities including Governance, Risk Mgmt., Business Strategy & Measurement 75% reported highly variable programs, often lacking any activity in one or more of the core categories recommended by the TCFD These observations show an industry in transition. Rapid increase in awareness, though practices vary wildly. Investors need to better understand management strategies and performance goals. Not yet possible to robustly evaluate the quality of risk management activities. 2020 Indicator design will focus on assessment of relevant risks and direct connections to asset-level mitigation measures.
  33. 33. Assess Risk and Vulnerability Portfolio Risk Assessment Physical Social Transition Risks (Over 50 indicators assessed and aligned with TCFD) Make a Plan Corporate Resilience Policy Targets & Goals Site Structure Systems Operations People Implement Resilience Strategy Property Level Emergency Plan Emergency Preparedness Integrate Resilience Strategy Get Insured Raise Awareness Benchmarking Financial Disclosure Reporting (GRESB, TCFD etc.) Improving Results With an Ongoing Comprehensive Resilience Program
  34. 34. Ari Frankel Alexandria Real Estate Equities, Inc. David Solsky Envizi Joshua Kace CodeGreen Solutions Alistair Blackmore EHS Sustainability Dennis Krieger Switchautomation Kees van Alphen hello energy Becca Rushin Jamestown LP Eric Duchon LaSalle Investment Management Lance Onken Measurabl Brian Trainor Heitman Erin Vicelja Goby Luuk Westerhof Innax Carl Paulse Refined Data Solutions Inc. Hanae Maeda CSR Design Marta Schantz ULI Chris Pyke USGBC and ARC Hannah Tillmann RE Tech Advisors Maryham Farag Lendlease Christopher Botten Better Buildings Partnership Hazel M. Sutton BOMA Matt Aberant WSP Christopher Hill Verco Global Henry Gilks Carbon Credentials Michael Zatz ENERGY STAR Christopher Maddern Schneider Electric Jakub Bartnicki CBRE Nick Hogg Evora Chungha Cha Re-imagining Cities Foundation James Lee iContinuum (Chongbang) Ryan Tinus Tishman Speyer Colin Ma Fabriq Jeannie Renne- Malone Prologis Tema Yara Goodspeed LORD Green Strategies Conan O'Connor Energy Profiles Limited Jenny TY Law Swire Properties Thomas Saunders Thinkstep Dan Skidmore BRE Jorge Chapa GBCA Tony Pringle Quinn & Partners Inc. Data Quality Technical Working Group
  35. 35. High-level survey of data systems Development towards GRESB Data Standard Understand the current landscape of ESG data systems Research Goals Environmental Performance Relevant building information Data: Lineage Timeliness Completeness Accuracy Aspects: Scope Data Quality Survey – inaugural year
  36. 36. Data Quality Survey Respondents
  37. 37. 1/3 of RE submissions supported Data Quality Survey Results
  38. 38. All respondents track data quality aspects Most respondents track multiple accuracy metrics Full results report: https://gresb.com/data-quality/#results Data Quality Survey Results
  39. 39. PANEL DISCUSSION 2019 GRESB Results Data Quality • Matt Ellis, Founder & CEO, Measurabl • Ben Myers, Director of Sustainability, Boston Properties • Josh Myerberg, Managing Director and Portfolio Manager, Morgan Stanley • Jason McIntyre, Director, Real Estate Operations and Sustainability, USAA Real Estate
  40. 40. GLOBAL AND NORTH AMERICA SECTOR LEADERS CommonWealth partners
  41. 41. - Strategy & Leadership - Policies - Reporting - Risk Management - Stakeholder Engagement - Risks & Opportunities - Monitoring - Performance Indicators - Energy - GHG emissions - Water - Waste Industry consolidation - Targets - Building Certifications - Tenants - Community Engagement
  42. 42. Assessment structure
  43. 43. 52 - Institutional Investors - Asset Managers - Industry Associations - Participating Fund & Asset Managers - Service providers - Data providers GRESB Industry Engagement REAL ESTATE Benchmark Committee INFRASTRUCTURE Benchmark Committee - 12 Separate Benchmark Committees and Advisory Boards around the world - Americas - EMEA - Asia Pacific
  44. 44. Sustainable Real Assets

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