GRESB Green Bond Working Group second meeting presentation. GRESB recently conducted in-house research to assess the property metrics utilized by green bond issuers, and to determine the main trends evident among the two sets of issuers identified above. The research presented in this presentation identifies several interesting trends.

1. Metrics: identifying eligible green
projects and reporting
GRESB Green Bond Working Group
Second meeting
© 2015 GRESB B.V.

2. Defining scope of research
Types of green bonds
1
Green Property
Bonds
CRE Universe
Use of Proceeds
Bonds
Greater Green
Building(GGB)
Universe
Use of Proceeds
Bonds
Use of Proceeds
RevenueBonds
Securitized
Bonds
Project Bonds
Greater Green
Buildings
(GGB)
CREGBWG

3. Defining scope of research
Issuers
2
Scope
Universe
CRE
(7 issuers)
Real Estate
Corporates
DigitalRealty Trust
Unibail-Rodamco
Vornado
Universe
GGB
(28 issuers)
Municipals
Ille de France
University of Virginia
Mass. Dev.Authority
Non-RE Corp. Skanska
Telus
Banks
ABN AMRO
Dev.Bank of Japan
TD Bank
GSEs Berlin Hyp
Fannie Mae

4. Application: metrics for green bonds
Tying use of proceeds to positive environmental outcomes
3
Metrics
Prospectus
(pre-issuance)
Process for eligible
green project
evaluation and
selection
Reporting
(post-issuance)
Actual use of
proceeds

5. Framework
Identifying Eligible Green Project criteria (pre-issuance)
•Should provide clear environmentally sustainable benefits, which,
where feasible, will be quantified or assessed by the issuer.
Green
Bond
Principles
•Assets certifying to a rigorous green building rating systems, such as
LEED, Green Star, BREEAM, CASBEE, DGNB, EDGE (or similar) may
serve as the basis for Eligible Green Projects.
•Energy rating programs can describe energy efficiency investment
objectives and may be used to qualify Eligible Green Projects.
GRESB GB
Guidelines
for RE
4

6. Observations: metrics in use
Identifying eligible green projects in prospectus (pre-issuance)
5
CRE Universe
Mostly global building
certification schemes;
More likely to specify a
range of certification
levels;
None specify CO2
emissions reduction;
When referenced, ESG
factors are broad-based
In Common
Most reference building
certification scheme and
levels (86% CRE/79%
GGB);
Appx. 25% specify level
of energy reduction/
improvement;
Only 1 issuer specifies
water efficiency
improvement
GGB Universe
Many local building
certification schemes;
Energy ratings tied to
particular benchmarks
more prominent than %;
Only 1 specifies CO2
emissions reduction;
Many reference
local/state energy and
waste regulation;

7. Building certification granularity
LEED is the most commonly leveraged building certification system
CRE Universe
4 issuers (US focused)
2013-2015
Wider range of certification
levels
GGB Universe
19 issuers (global)
2014-2015
Tighter range, increasing at high
end
6
0
4
8
12
16
20
Certified Silver Gold Platinum
0
1
2
3
4
5
Certified Silver Gold Platinum

8. Building certification granularity
BREEAM is the second most commonly leveraged building certification system
CRE Universe
3 issuers (EU focused)
2013-2015
Similar range
GGB Universe
6 issuers (EU focused)
2014-2015
Slightly wider range, still
increasing at high end
7
0
1
2
3
4
5
6
0
1
2
3
4
5

9. Application: metrics for green bonds
Tying use of proceeds to positive environmental outcomes
8
Metrics
Prospectus
(pre-issuance)
Process for
project evaluation
and selection
Reporting
(post-issuance)
Actual use of
proceeds

10. Framework
Reporting (post-issuance)
9
Green Bond Principles
• In addition to reporting on the use of
proceeds […], issuers should provide
[…] a list of projects to which Green
Bond proceeds have been allocated
including - when possible […] - a brief
description of the projects and the
amounts disbursed, as well as the
expected environmentally sustainable
impact.
GRESB RE Guidelines
• Investor disclosures regarding Green
Bond investments and impacts should
include the following elements:
• Asset level information confirming
full allocation to Eligible Green
Projects by the amount of proceeds
invested per project.
• One or more GBP 2015 categories
associated with each project.
• Asset level green building
certification and energy rating data.

11. Observations: metrics in use
Found both is CRE and GGB universes
Current use of proceeds
List of projects
Few impact
reports
Few ESG
factors
Certification
level
Few change
in energy use
10
Upfront
Identification
in
Prospectus
Post-
issuance
Reporting

12. Questions & Comments
?
www.gresb.com
s.anzinger@gresb.com
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