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2016 GRESB Real Estate & Debt Results Release - Canada
The document discusses sustainability performance in the real estate industry based on GRESB data and assessments. Some key points: - GRESB provides sustainability benchmarks and assessments for real estate portfolios and companies globally. Over $2.8 trillion in real estate assets are covered by GRESB. - GRESB data shows trends in energy, emissions, water and waste reduction for participating real estate entities in regions like North America. Higher GRESB scores are also correlated with higher investment returns. - Issues like climate change initiatives, building certifications and health and well-being are transforming the industry and present both risks and opportunities for real estate investors and companies. - Continued leadership will be needed
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2016 GRESB Real Estate & Debt Results Release - Canada
- 2. 7.3 billion 73 $ trillion 9.8 GtC/year +0.810C above20th century average Worldwide GDP CO2 Population
- 4. ACTIAM Aegon NV Alberta InvestmentManagement Corporation (AIMCo) Amundi AMP Capital AP1 First Swedish National Pension Fund AP2 Second Swedish National Pension Fund AP3 Third Swedish National Pension Fund AP4 Fourth Swedish National Pension Fund AP7 Seventh Swedish National Pension Fund Archbishops' Council Armstrong Asset Management ATP Australian Ethical Investment AustralianSuper Aviva Investors AXA AXA IM Baldwin Brothers Inc. Bank J. Safra Sarasin Bayerische Versorgungskammer Bedfordshire Pension Fund BMO Global Asset Management BNP Paribas Investment Partners Brawn Capital Brown University Sustainable Investment Fund BT Pension Scheme California Public Employees' Retirement System California State Teachers' Retirement System Cathay Financial Holding Co., Ltd. Catholic Super CBRE Global Investors Cbus Super CCLA Central Finance Board of the Methodist Church Christian Brothers Investment Services Christian Super Christopher Reynolds Foundation Church Commissioners for England Church of England Pensions Board Church of Sweden Connecticut Retirement Plans and Trust Funds Dana Investment Advisors Danske Bank Asset Management Danske Civil- og Akademiingeniørers Pensionskasse Deutsche Asset Management Dragon Capital EdenTree Investment Management Ltd. Encourage Capital Environment Agency Pension Fund Epworth Investment Management Ltd ERAFP ESSSuper ETF Partners Eureka Funds Management First Affirmative Financial Network Friends Fiduciary Corporation Friends Provident Charitable Foundation FRR - Fonds de Réserve pour les Retraites Greater Manchester Pension Fund Henderson Global Investors Hermes Investment Management HESTA HSBC Global Asset Management IFM Investors Impax Asset Management Inflection Point Capital Management Insight Investment Jesuits in Britain Juristernes og Økonomernes Pensionskasse Kempen Capital Management L&G Investment Management Local Government Super London Pensions Fund Authority Mercer Merseyside Pension Fund Miller/Howard Investments, Inc. Mirova MN Nanuk Asset Management Pty Ltd Natixis Asset Management NEI Investments New York City Comptroller New York State Common Retirement Fund New Zealand Superannuation Fund NextEnergy Capital Nordea Wealth Management North East Scotland Pension Fund OFI Ohman Old Mutual Global Investors OPTrust Oregon State Treasurer OTTP Pax World Management LLC PensionDanmark PGGM PKA Plater Trust Railpen Investments Rathbone Greenbank Investments Representative Body of the Church of Ireland Reynders, McVeigh Capital Management Robeco Russell Investments Sisters of St. Dominic of Caldwell, New Jersey Sonen Capital South Yorkshire Pensions Authority Stafford Sustainable Capital Statewide Super Tellus Mater Foundation Temporis Capital LLP The Barrow Cadbury Trust The Joseph Rowntree Charitable Trust The Pensions Trust The Sustainability Group at Loring, Wolcott and Coolidge The United Reformed Church Trillium Asset Management Trustees of Amherst College Unipension FAIF A/S Unitarian Universalist Association USS Veris Wealth Partners VicSuper Vision Super Pty Ltd Walden Asset Management Wespath Benefits and Investments West Midlands Pension Fund West Yorkshire Pension Fund WHEB 130 investors
- 5. INTRODUCING THE 11TH GICS®SECTOR: REAL ESTATE
- 6. Buildings are partof the problem… 99TWh 27.9Mt 0.47km3 15.5Mt
- 7. Environmental Management Systems …andpart of the solution
- 8. Innovative energy management, …andpart of the solution
- 9.
- 10.
- 11.
- 12.
- 14. Market transformation Top down,bottom up Capital Market Company Portfolio Building Investment Community CAPITAL Investment Manager Portfolio Manager/ Asset Manager Property Manager/ Facility Manager COMMITMENT
- 15.
- 16. 3.9x The difference inoverall GRESB score between the Top 10% and Bottom 10% entities in 2016
- 17. “U.S. REITs withhigher GRESB ratings deliver higher returns per unit of risk” “2.75% return spread between the Top 10% and Bottom 10% European non-listed GRESB entities”
- 18. Energy Real Global Impact LFLconsumption (between 2014-2015) CO2e Water Waste Less Environmental Impact
- 19.
- 20.
- 21. GRESB SCORE Policy & DisclosureBuilding Certification Monitoring & EMSManagement Performance Indicators Risks & Opportunities Stakeholder Engagement 8.8 % 9.5 % 12.4 % 25.2 % 24.5 % 10.9 % 8.8 %
- 22. Validation Three-layer process forinvestment-grade data 100% Validation Plus Site Visit All Participant Check Open text boxes (quality) Open-ended questions Hyperlinks Evidence (presence) Evidence (content) Data accuracy18% 2.5% Reporting boundaries Data quality Evidence for answers
- 23.
- 24.
- 25. Response Rate Development USand Canada
- 28.
- 29. Apple Market Cap USD584 billion
- 30. USD 7.6 trillion CommercialReal Estate Owned by Investors
- 31. USD 2.8 trillion GRESBCoverage
- 32. Competitive Differentiation &Advantage Risk & Uncertainty USD 2.8 trillion GRESB Coverage
- 33.
- 34. GRESB Model Global ESGperformance
- 35.
- 36. ESG Performance Trends Globaltrends over time
- 37.
- 38. 70,520 Homes Energy North America: Footprintand LFL Consumption 2014-2015
- 39. 83,418 passenger cars Carbon North America:Footprint and LFL Consumption 2014-2015
- 40. 9,897 Olympic pools Water North America: Footprintand LFL Consumption 2014-2015
- 41. 107,000 truck loads Waste North America:Footprint and LFL Consumption 2014-2015
- 42.
- 43. Intensities – carbonemissions Input versus output
- 44.
- 45. Health & Well-being Anew opportunity for value creation and risk management
- 46.
- 47. 759 ENTITIES 60 (’15: 54) LISTED AUS/NZ -2% LFLChange in Carbon Emissions (427kt) SCORE LEADREPORT
- 50.
- 51.
- 52.
- 53. Sustainability Performance Companies Leaders Will yourcompany lead? Or follow?
- 54. What is yourGRESB Rating?
- 55.
- 56. Climate Initiatives inCanada FEDERAL AND PROVINCIAL CLIMATE INITIATIVES REAL ESTATE CLIMATE INITIATIVES
- 57. Climate Readiness inCanadian Real Estate
- 58. Climate Readiness inCanadian Real Estate
- 59. What’s Next? Effective GHGemissions targets set in line with climate science Contribute to achieving provincial & federal GHG reductions Demonstrate absolute/aggressive emission reductions
Editor's Notes
- #4 New global commitment to reduce emissions First ever legally-binding climate agreement The Paris Agreement on climate change provides a clear signal to investors that the transition to the low-carbon, clean energy economy is inevitable and already underway. Governments have a responsibility to work with the private sector to ensure that this transition happens fast enough to catalyse the significant investment required to achieve the Paris Agreement’s goals including: Holding the increase in the global average temperature to well below 2°C above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, and Achieving net zero greenhouse gas emissions (“a balance between anthropogenic emissions by sources and removals by sinks of GHGs”) in the second half of the century."
- #5 More responsible investors (130 investors respresenting USD 13 trillion) More focus than ever on environmental, social, and governance performance across all asset classes They urge to: Increase pace of transition Increase green investments I short: carrots & sticks are needed List of investors that signed G20 letter from: http://www.igcc.org.au/resources/Documents/FinalWebInvestorG20Letter24Aug1223pm.pdf
- #7 4 months electricity supply in the UK 4% of all global carbon emissions from ailrine sector XXXX Olympic pools 2.5 times the Great Pyramid of Gaza
- #8 Prologies produces one third of on-site renewables in GRESB 2015: 190GWh 2014: 179GWh https://www.greenbiz.com/article/65-billion-real-estate-titan-second-only-walmart-solar Add GRESB Green Star logo/GRESB Green Star rating
- #9 Link REIT case study - https://www.gresb.com/insights/2016/08/fresh-market-waste-separation-pilot-scheme/?preview_id=11966&preview_nonce=2c17e598f7&preview=true A joke here can be...”Yes this is innovation”
- #10 How can the real estate sector contribute to solving climate issues
- #11 Regulation provides minimum performance requirements Leaders are in the right tail, however, the bulk is still in the “bell” So, how to move the bell forward (= transformation to net-zero buildings that are safe, healthy, comfortable, connected, socially engaged etc.)
- #14 Add real numbers
- #15 We’ve seen that the capital market provides a very effective top down push towards bottom up commitment PRI currently meeting in Singapore – 1,500 asset owners
- #16 Transparency companies and funds vary significantly in their environmental, social, and governance performance Opportunity leadership, quality, competitive advantage, resilience, superior returns, lower operating costs, mitigation of social and environmental impacts Risk regulation, compliance, obsolesce, competitive disadvantage, physical damage, material impact, lower returns, higher operating costs, excessive social and environmental impacts
- #17 Almost 4x The difference in overall GRESB score between the Top 10% and Bottom 10% entities in 2016 Message: there is a great differentiation amongst GRESB reporters. Our aim is to provide transparency to the bottom performers in terms of how the top performers are managing risks and utilizing opportunities, so they can close the gap. Top 10% average score: 86.6 Bottom 10% average score: 21.9
- #18 There is an increasing amount of evidence that backs the correlation between financial performance and ESG performance. Studies using GRESB data clearly show that market transformation also makes business sense.
- #19 What does current market transformation look like in terms of reducing the built environment’s footprint? Less energy consumption
- #21 Our process to connect industry stakeholders Central in this process is data quality, both at the company/fund level and at the portfolio level
- #22 Scoring framework is based on what is most material to investors.
- #23 Process that supports in providing investment-grade data (co-developed with PwC)
- #24 Something different: highlight GRESB leaders
- #25 No need to show these (already included in previous slides)
- #27 Listed: 201 Private: 558
- #29 Let’s put these figures in context
- #30 Disclaimer: this figure is from 5 September 2016 iPhone 7 will be presented today, let’s see what Apple’s market cap is tomorrow morning
- #33 Transparency on ESG provides competitive differentiation & advantage. The opposite is true for lack of transparency.
- #37 Conclusion: transparency leads to improved performance/leadership
- #44 Drilling down deeper, companies and funds are also differentiated in terms of carbon output Looking at intensities, this differentiation provides interesting insights into sector types and their impact Looking at intensities per unit of invested capital, it becomes clear where the opportunities for improvement are, and how “green investments” might actually have the most positive impact
- #46 I thought there were 43 leaders?
- #49 New global commitment to reduce emissions First ever legally-binding climate agreement The Paris Agreement on climate change provides a clear signal to investors that the transition to the low-carbon, clean energy economy is inevitable and already underway. Governments have a responsibility to work with the private sector to ensure that this transition happens fast enough to catalyse the significant investment required to achieve the Paris Agreement’s goals including: Holding the increase in the global average temperature to well below 2°C above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, and Achieving net zero greenhouse gas emissions (“a balance between anthropogenic emissions by sources and removals by sinks of GHGs”) in the second half of the century."
- #51 Regulation provides minimum performance requirements Leaders are in the right tail, however, the bulk is still in the “bell” So, how to move the bell forward (= transformation to net-zero buildings that are safe, healthy, comfortable, connected, socially engaged etc.)
- #52 Regulation provides minimum performance requirements Leaders are in the right tail, however, the bulk is still in the “bell” So, how to move the bell forward (= transformation to net-zero buildings that are safe, healthy, comfortable, connected, socially engaged etc.)
- #55 Add real numbers
- #57 Canada: national carbon pricing mechanism standardized GHG emissions disclosure for companies CaGBC: Energy Benchmarking, Reporting & Disclosure in Canada: A Guide to a Common Framework