Article written by Yang Liu.

GRESB – the global real estate sustainability benchmark

The real assets industry grapples with numerous intertwined challenges under the ESG umbrella, such as climate change, resource depletion, social inequality, and governance issues. These challenges can significantly affect the value, reputation, and resilience of real asset investments.

Founded in 2009, GRESB aims to offer real assets investors and managers a comprehensive framework for measuring, benchmarking, and reporting on their sustainability performance. Its mission is to support the industry in tackling these challenges by providing a thorough and transparent framework for measuring and enhancing sustainability performance. (GRESB)

The GRESB Real Estate Assessment generates two benchmarks:

• The GRESB Real Estate Benchmark, which considers management and performance factors
• The GRESB Development Benchmark, which considers management and development factors

There has been a significant evolution in participation since the creation of GRESB in 2009. In 2024, there are 2,223 participants for the real estate benchmark and 887 participants for the infrastructure benchmark.

Fig n°1: Evolution of the sample of the GRESB benchmark since 2009 – GRESB 2024

Recent evolutions in participation shows Europe as a main contributor 2024

In 2024, the GRESB Real Estate Benchmark globally covers USD 7 trillion in GAV, spanning 15 sectors in 80 markets, with average scores of 75.84 (Standing Investments) and 85.76 (Development).

With 1,063 participants, Europe is the largest participating region. There has been a significant increase in participants in Asia (+52), Europe (+50), and America (+33).

In Europe, the majority of contributions come from the UK (287 participants, equivalent to 27% of participants in Europe), including entities with assets based in the UK, not necessarily British companies. This is followed by pan-European (227), Italy (116), Germany (114), and France in fifth place with 32 participants.

Regarding the sector distribution on a global scale, the largest sector reported to GRESB in 2024 is residential. However, no sector accounts for more than 70% of a portfolio, ensuring that portfolios are mixed. The same dynamic applies to Europe.

European market scores and metrics stands alongs the global market indicators

In light of the scores and their distribution, GRESB notes that it is necessary to improve analysis methods, as high scores require more precise differentiation. This is part of the missions for 2024 mentioned in « The GRESB Foundation 2024 Roadmap« .

Fig n°2: Results from the GRESB Model (Europe – Standing Investments) – GRESB 2024

Fig n°3: Consecutive reporting year and average scores (Europe) – GRESB 2024

This is also confirmed by the trend that it is becoming increasingly difficult for entities to maintain the growth of their ratings. Generally, the longer entities participate in GRESB, the higher their scores. However, GRESB standards are also becoming more stringent, making it more challenging to maintain these scores. For the Europe region, it is observed that entities participating for 13 consecutive years have an average score of 88%, which decreases to 86% in the 14th year, indicating a slight decline.

Fig n°4: Regional average (Standing Investments) – GRESB 2024

Fig n°5: Regional average (Development Investments) – GRESB 2024

Generally, Europe ranks at a level similar to the global average, mainly because it represents the around half of contributors. Oceania and Asia, however, are two regions that score higher on the Standing Benchmark (Management + Performance) and the Development Benchmark (Management + Development). This is explained by the fact that primarily the best companies in these regions participate, while in Europe, contributors are more numerous and of varying levels.

Fig n°6: Sector average (Europe) – GRESB 2024

In terms of scores by typology, it is primarily offices that perform well in Europe. However, in the industrial and healthcare sectors, issues with data collection persist, leading to lower average scores.

The like-for-like consumption metrics provide a clear view of performance improvements across consistently reported assets over consecutive years.

Coverage on data reported by participants still is a challenge

GRESB confirms three pillars of decarbonization: establishing KPIs, collecting data, and making improvements. Among these three pillars, the main difficulty lies in data collection. « Data coverage refers to the proportion of a portfolio’s total assets for which consumption data is available and reported. High data coverage means that a greater percentage of an entity’s portfolio is being measured and tracked, providing a more comprehensive and reliable basis for performance benchmarking and sustainability assessments. » (GRESB 2024)

Since 2020, GRESB has required contributors to list all assets in their portfolios and then collect all data on greenhouse gases (GHG) emissions and energy. This gives an idea of the proportion of assets for which energy or carbon information is available.

Participants are making efforts to collect data, but there is still no full coverage rate for the reported data. For example, for energy, only 75.4% of the declared assets have available energy data.

A progress in Net-Zero goals

GRESB’s evaluation method starts by checking if participants have a net zero policy, a public commitment, or a target. The number of participants with targets was very low three or four years ago (around 14%), so there has been a good increase to date.

“Net zero targets are on the rise, with a 15% increase in participants setting net zero goals, now reaching 65%. Of these, 29% of real estate participants have incorporated embodied carbon into their net zero plans.” (GRESB 2024)

Regarding net zero progress, Europe is better positioned compared to the rest of the world on all three indicators, with 82.78% for Policy, 68.11% for Commitment, and 73.75% for Target.

Fig n°7: Net zero progress (Europe) – GRESB 2024

What’s to come?

According to GRESB and in general, this year’s GRESB results highlight significant progress in energy savings, emissions reduction, water conservation, and the enhancement of human well-being. Progress towards Net Zero has also improved.

Europe remains the most important region in terms of participants with numerous new contributors.

Data coverage still needs improvement, especially regarding energy consumed, GHG emitted, water consumed, and waste diverted.

The challenge remains in how to better differentiate the high scores. « We must continue to raise the bar for future performance, pushing the real assets industry to transition to a more sustainable, resilient, and low-carbon future. » (GRESB 2024)

In 2025, the evolution of the Real Estate Standard will encompass changes in both structure and content. Key elements of the real estate workplan include decarbonization, embodied carbon, sector specificity, building certifications, biodiversity and natural capital, and physical climate risk (The GRESB Foundation 2025 Roadmap).

The ESREI programme would like to thank its sponsors Amundi Asset Management, BNP Paribas Real Estate, Clariane, Ivanhoe Cambridge, La Française REM, Ofi Invest and Pimco Prime Real Estate. They enable us to carry out this work and we will continue to go forward on international issues in sustainable real estate in 2025!