The document discusses the Global Real Estate Sustainability Benchmark (GRESB), which assesses the environmental, social, and governance (ESG) performance of real estate assets. It highlights the correlation between strong sustainability practices and improved financial performance, risk-adjusted returns, and market competitiveness for real estate funds. Additionally, it emphasizes the growing demand for standardized sustainability data from investors and GRESB's role in facilitating transparent comparisons among real estate portfolios.

1. SUSTAINABILITY IN REAL
ESTATE:
ADVANCING PORTFOLIOS USING GRESB
Stephanie Barr, August 2016
INSTITUTE FOR THE BUILT ENVIRONMENT

2. IBE is based at Colorado State
University. We form
interdisciplinary teams of faculty,
students and
off-campus professionals to take
research to practice.

3. OUR MISSION
ADVANCE THE
DEVELOPMENT OF
HEALTHY, THRIVING
BUILT
ENVIRONMENTS.

4. PROVIDE THOUGHT
LEADERSHIP
OPTIMIZE TEAMS &
PROJECT PERFORMANCE
DEVELOP LEADERS
WHAT WE DO

5. TONIGHT’S KEY POINTS
1. What is the Global Real Estate Sustainability Benchmark and why
should you care?
2. How does GRESB work, what does it measure, and who is it for?
3. How does LEED NC & EBOM certification overlap with GRESB?
4. How will GRESB impact the building design & construction industry?
5. Anything I missed?

6. 2015 ESG RESEARCH FINDINGS
GRESB.COM/INSIGHTS
Companies with superior ESG practices receive
market benefits
An updated literature review by Gordon Clark et al. indicated that
90% of empirical studies found that strong sustainability standards
lower the cost of capital and in 80% of studies strong sustainability
practices are positively correlated with superior stock price
performance.

7. 2015 ESG RESEARCH FINDINGS
GRESB.COM/INSIGHTS
Sustainable property features lower default risk
Researchers Xudong An and Gary Pivo documented that certain
sustainability features, including energy efficiency, walkability, and
proximity to fixed-rail transit, significantly reduce default risk in
CMBS loans.

8. 2015 ESG RESEARCH FINDINGS
GRESB.COM/INSIGHTS
Consideration of ESG improves risk-adjusted returns
Researchers Natalie Trunow and Joshua Linder found empirical
evidence that incorporating ESG factors into investment decisions
improves the investment selection process and enhances risk-
adjusted returns.

9. 2015 ESG RESEARCH FINDINGS
GRESB.COM/INSIGHTS
Higher GRESB ratings correlate to superior financial
performance
A University of Cambridge study commissioned by the Carbon War
Room and the Rocky Mountain Institute, found that, adjusted for
risk, there is a significant link between portfolio sustainability
indicators and REIT stock market performance.

10. A STRONG SUSTAINABILITY PROGRAM
INDICATES A FIRM HAS THEIR HOUSE IN
ORDER.
 TRUST 
SOPHISTICATION
 REPUTATION  RETURNS

11. THE GLOBAL REAL ESTATE
SUSTAINABILITY BENCHMARK
Founded in 2009, GRESB is an industry-driven organization committed to
assessing the ESG performance of real assets globally, including real estate
portfolios and infrastructure assets.
GRESB is headquartered in the Netherlands & is a subsidiary of GBCI.
BOARD

13. PURPOSE
GRESB was built on behalf of large institutional investors to provide
consistent, comparative, benchmarked data on ESG indicators.
Increased scrutiny demands benchmarking not green messaging.
“Investors are gathering together and demanding better
sustainability data. They need standardized, comprehensive
information that is consistent over time.”
– The Economist, 2014

14. WHO SHOULD PARTICIPATE?
GRESB collects data at the portfolio
level for:
listed property companies,
private property funds,
developers, and real estate
investors.
The GRESB Assessment is applicable
across regions and property types.
HARRISON STREET
Real Estate Capital
INVESTOR
DEVELOPER OWNER/
OPERATOR

16. THE SURVEY

17. SURVEY ASPECTS & WEIGHTING

18. SURVEY ASPECTS & WEIGHTING
Management & Policy
9% 9% 12%
30%
Implementation & Measurement
9% 25% 25%11%
70%

19. CERTIFICATIONS & ENERGY AWARDS
Green building certifications are
11% of GRESB scoring.
• Pressure from investors will drive
certifications on new
developments
• Fund & asset managers will drive
existing building improvements &
energy ratings.

20. 2015 SURVEY RESULTS

21. INTEPRETATION OF PLOT
Green Star
Scored above 50 in
both axis.
Shows leadership
and maturity of
fund/entity.

22. INTEPRETATION OF PLOT
Green Talker
Scored above 50 in
Management & Policy,
but low in
Implementation &
Measurement.
Shows the organization is
sophisticated but hasn’t
implemented measure
yet. A good place to be
for a new fund.

23. INTEPRETATION OF PLOT
“Green Starter”
Green Starter
Scored above 50 in
Implementation &
Measurement and low in
Management & Policy.
Shows opportunity. The
organization is filling out
GRESB, that displays
interest and possible
commitment to
improving.

24. INTEPRETATION OF PLOT
Green Walker
Honestly, they just got
lucky.
Without the policy and
management practices
this implementation
success will be difficult to
sustain.

25. FINAL THOUGHTS
• Capital is starting to drive sustainability efforts. This top down pressure is
exciting.
• Research continues to tie sustainability to higher returns – this trend isn’t
going away.
• GRESB allows for apples to apples, quantitative comparison of funds and
moves us beyond greenwashing.
• GRESB’s integration into the USGBC Green Business Certification Institute
suite will support further refinement and growth of the program.
• For savvy investors, particularly institutional capital, funds that complete
GRESB are seen as having competitive differentiation, while funds that don’t
are viewed with risk and uncertainty.

26. ibe.colostate.edu
@ibeatcolostate
s.barr@colostate.edu
INSTITUTE FOR THE BUILT ENVIRONMENT